My Blog List

Thursday, December 31, 2015

Happy New Year!

I'm kinda happy to see 2015 go. I was actually fine with 2015 til just before Thanksgiving when I fell and broke my leg. Because of my broken leg I'll be glad when this year is over. Meanwhile I'm chilling on Herb Alpert music and hanging with my cat.


¡Feliz año nuevo!

And may the year be full of love and productive things.

Wednesday, December 30, 2015

You need to Eat Beans Boy

I don't remember the job market ever being easy. Once when I was still in college I found a job as a temporary. Went into a warehouse and was assigned to unload a train car. At first they'd have me moving boxes while everyone worked hard. Then the other guys handed me the one hand-truck, sat down and started shooting the breeze, while I continued removing boxes and stacking them inside. At about 5 minutes to 10 they took the hand-truck from me and told me to sit down and take a break. No sooner than I sat down the supervisor came through. He was as regular as clockwork, and this repeated itself all day. At the end of the day I asked if they needed anybody the next day and he said "heck no, you need to eat beans boy." That experience taught me to be careful with "friends" as well as enemies. I think that is as close as I ever came to a Union job.

Tuesday, December 22, 2015

Four Freedoms and Six Basic Rights -- The Second Bill of Rights

FDR's Four Freedoms

Late in his life, Roosevelt articulated 4 Basic Freedoms that everyone ought to have. These are:

  1. Freedom of speech
  2. Freedom of worship
  3. Freedom from want
  4. Freedom from fear

Tuesday, December 15, 2015

Daniel Schávelzon Buenos Aires Negros, Jews and Nazis

I got to meet Daniel Schávelzon a few years ago when my wife was bringing his archeology to Howard University through the Spanish Department. He is an urbane, intelligent and wise person. And he was a friend of my wife. She had even interviewed him on one of our trips to Argentina! I had put his works on the back burner when I moved out here to Brunswick as they'd gotten packed up into Boxes, and as I'm not as connected to Howard as I was while my wife was alive. So it was a shock this week when I was sitting in my living room half awake and recovering from a broken leg. And they did an episode of "Hunting Hitler" -- and who was one of the archeologists helping them?! Daniel Schávelzon!

Argentina is one of my favorite countries. That doesn't mean it doesn't have a sanguinary past. On the contrary Buenos Aires and Montevideo both have a history that is as dark as any Southern City in North America. When we toured some of the archeology sites featured in "Buenos Aires Negro" -- they were exactly like what is in the basements of old houses in Alexandria or Georgetown. Shackles, private prison rooms, torture tools, used to subjugate and control slaves; all in the basements of upscale walk up townhomes (row houses) in fancy neighborhoods. At least places like "La Boca" were painted really pretty. The tourist traps focus on tourism, industry, and Tango. Daniel Schávelzon dug into some of these houses and found evidence of Argentina's past as a majority black city. Argentina, unlike Maryland or Virginia, freed it's slaves 5 or six times before civil wars and new methods of slavery made black chattel slavery uneconomic. The two cities were transhipment points to mines in the West of the country and plantations all over. The origins of Tango were in mulatto communities combining half remembered African religion and dances with European music traditions. Jaz, Tango and most of the really good dance music of the world, were invented by people who would die without the outlet of music and singing.

And so it is that oppressed people who weren't allowed into the USA wound up in Argentina. Jews, Syrians (including what are now known as palestinians), Italians, Spaniards,... We should have sent a copy of the statue of Liberty to Argentina; except many of the immigrants never could "rise" out of poverty.

And Racism has been part of the equation since the beginning. The racist leaders of Argentina tried to deal with their "negro problem" by drafting black folks. The civil wars and regional wars between provinces or between countries like Brazil, Peru, Bolivia, Argentina etc... were fought with drafted immigrants and former slaves. The women were left behind and scrambled for a living.

Jews fleeing the Holocaust, some of them, arrived in Argentina. They were followed by Nazis. Maybe even Hitler! The children of those Nazis would run the Argentine Military in the 70s and 80s.

Further Reading

Daniel Schávelzon
Archaeology and architecture prehispanico Ecuador. National Autonomous University of Mexico; 1981. ISBN 968-5800-20-0
Conservation of Cultural Heritage in Latin America. Restoration of pre-Hispanic buildings in Mesoamerica: 1750-1980 Studies in Conservation, Vol 37, No. 4 (Nov. 1992), pp.. 285-286.
Archaeology of Buenos Aires. Editors Emecé. 1999. ISBN 950-04-2044-9
Stories of eating and drinking in Buenos Aires. Editorial Alfaguara Argentina. 2000. ISBN 950-511-659-4
I believe I have a copy of the following:
Black Buenos Aires - Historical Archaeology of a city silenced. Editors Emecé. 2003. ISBN 950-04-2459-2
Tunnels of Buenos Aires, stories, myths and truths of the American Buenos Aires underground. 2005. ISBN 950-07-2701-3 Tourist tenements of Buenos Aires; 2005. ISBN 987-9473-54-X

Monday, December 14, 2015

Privateering in Medicaid

The Right Wing in this country learned to rip out a page from the strategy of progressives. If they take their abusive agenda's, call them "reform" and throw in words like "reform", pay lip service to the programs "service needs", and use big words, they can fool most people reading their articles into thinking they are talking about the real thing and not simply privateering on a source of public revenue. It all sounds good until you dig into the reality of their proposals.

Sunday, December 13, 2015

Memorial Day Tears


While the grills burn,
and hotdogs pop and sizzle,
While the sun shines,
and white clouds fluff like popcorn across the sky.
My own memorials weigh me down and I cry.
Rows and Rows of friends and family.
Rows and Rows of beaten and burned.
Rows and Rows of stories unlearned.
They at last lie in peaceful sleep.
But my eyes fill with tears and I weep.
Oh, spare me talk of hatred and glory,
Spare me your fear mongering and lies.
The dead fear nothing, only the deluded fear their brothers.
And only fools kill children and mothers.
While everyone weeps for their own children,
The dead sleep.
Fear saves no one.
Perfect security is impossible
The insecure with their bluster create perfect insecurity with their fear and anger.
I'd rather our children muddle on, muddle by.
Then create perfect insecurity with violence.
Let the popcorn pop and eat your hotdogs,
that is how we should remember these things,
Not by watering the earth with our tears.
Let me watch the little ones stumble around.
Let me hear the birds chirping and other sounds.
I don't like the sound of silence after a bomb blast.
I don't like the ringing it leaves in my ears.
I don't like watering the earth with my tears.
Rows and rows of flowers I want to see.
Bees that buzz, and trees that grow tall and strong.
Let's dance and build, and live and thrive,
nobody should be forgotten, we should all celebrate.
Maybe flowers can grow from my tears.

First written in 2012 -- updated 12/13/2015

Christopher H. Holte

Thursday, December 10, 2015

Zombie ideas that won't die

At least when you shoot a zombie in the brain it finally stops coming at you. Not so with RW economics.

Alternet has a fun little article on Krugman's Friday Column: I'd cite the column directly but I used up my freebie quota at the NY Times and am too broke to pay them.

And besides Janet Allon does a better job of contextualizing his comments anyway. Krugman is too polite to take the argument where it needs to go. These are Zombie ideas that never die. The notion of Zombie came from lurid stories of Voodoo and New Orleans Witch Doctors, so calling these ideas Zombie economics follows from years of economists (even sometimes former hucksters) calling them "Voodoo Economics." They were voodoo when they were new ideas. But they won't die!

Tuesday, December 8, 2015

Many Kinds of Privateering

I'm using the word privateering in lieu of privatization, and other terms, for a specific reason. First of all the behavior is not new, is traditional, and while George Lakoff brought the term back the original word had the same meaning:

privateer (n.) Look up privateer at
1660s, "private man of war," from private (adj.), probably on model of volunteer, buccaneer.

Lakoff's revival from wikipedia:

"From a blend of privatization +‎ profiteer. Coined by George Lakoff in his book, The Political Mind. It describes a widespread and corrupt practice that has not previously had a name and, being nameless, has not been publicly aired or even notices as a single practice. The word previously existed with a related meaning, but has mostly gone out of use."

Lakoff is brilliant, but he didn't invent the word. He revived it. To be precise it originally meant a person, ship or company with a license to do private warfare. However, this older meaning, is what privateering was from the beginning -- private - warfare/ private government. For most of the same thing they were the same thing. Filibustering and freebooting were also privatized warfare, fought with private armies. And all these were privatizations of warfare originally. Privateers were pirates who had permission to steal (take prizes) from an enemy fleet of merchant ships. Privatized warfare (privateering) was once the only kind of warfare, so the only difference between a pirate and a privateer was whether the sponsoring government was considered legitimate by the victims. So Lakoff's revival of the term is consistent with it's etymology.

This becomes even more clear when one realizes that the predatory activities of early private pirate companies like the East India Company involved privateering of government functions. When Thomas Roe reached the court of the Moghul Emperor, the way that he and his successors were able to manage to loot most of India, involved convincing the Moghuls to give away privileges to the East India company, including formerly government functions. The term for that could be called "privatization" -- but the general term is privateering. [see Origins of the East India Company]

This post is part of a series. I'll update it with more information as I get it. Privateers are pirates. The main difference is that most pirate ships were completely outlaws from the Point of View of Official aristocracy. They had to share the loot fairly with the crew. Privateers get a letter from government that says that their looting is perfectly legal. So the only pirates privateers have to share loot with -- are fellow privateers. Lakoff didn't invent a new word. He revived the meaning of one that had been eclipsed by other euphemisms.

An examination of the connection between land pirates and aristocracy; and between sea pirates (Sea Dogs) and modern Corporations quickly confirms the diagnosis. We are fighting piracy. Okay, it may be all "legal like" -- but the rules are the same as any other mafia. "It's just business." AND We made them an offer they couldn't refuse.

Bad Business AND BAD Government = Privateering. Indeed, I believe that privateers and privateering are barely legalized rent seeking, grifting, theft; in other words barely legal piracy.

More on Pirates and Privateering
The Pirates Dilemma
Some references and further readings on Lakoff:

Monday, December 7, 2015

The Assassination of Yitzhak Rabin and of Mideast Peace

I remember when Yitzhak Rabin was assassinated. He was one of my heroes. He was assassinated by one of his own people. It was an amazing thing to observe and it occured even as he was trying to negotiate a peace treaty the the Palestinians. Turns out we have more to fear from our own than outside terrorists. Or rather we have more to fear from fear itself.

The New Yorker has this article on the subject:

Books OCTOBER 26, 2015 ISSUE, Shot in the Heart When Yitzhak Rabin was killed, did the prospects for peace perish, too? BY DEXTER FILKINS []

The Author notes that that assassination was one of the most effective coups in modern history:

"Two years earlier, Rabin, setting aside a lifetime of enmity, appeared on the White House lawn with Yasir Arafat, the leader of the Palestine Liberation Organization and a former terrorist, to agree to a framework for limited Palestinian self-rule in the occupied territories; the next year, somewhat less painfully, he returned to the White House, with Jordan’s King Hussein, to officially end a forty-six-year state of war. Within months of Rabin’s death, Benjamin Netanyahu was the new Prime Minister and the prospects for a wider-ranging peace in the Middle East, which had seemed in Rabin’s grasp, were dead, too. Twenty years later, Netanyahu is into his fourth term, and the kind of peace that Rabin envisaged seems more distant than ever."

Friday, December 4, 2015

The Holocaust Sacrifice

This was a man whose life was cut short
Disappeared for no crime
Punished by a lawless court
Where the torturer was judge, jury and executioner
And there are no appeals.
The motto was;
"You must have done something."
He was offered as a sacrifice to Wall Street Baalim;
A burnt offering to the false gods of commerce
While the world looked the other way
And sad dancers danced a tango.

Christopher H. Holte, 12/4/2015


From Raquel:

Daniel Horacio Partnoy, nuestro hijo
4 diciembre1957/ 8 agosto1983
Cómo olvidar, cómo perdonar
"La meta del terrorismo de estado durante la dictadura militar no sólo fue eliminar la vida de los jóvenes más brillantes de esa generación y de personalidades destacadas sino también causar un daño emocional, psíquico y social a sus familiares. My hijo Daniel fue una víctima más de aquel tremendo horror. Hoy diciembre 4 sería su cumpleaños."

She writes (translation):

"Daniel Horacio Partnoy, our son December 4, 1957 / August 8, 1983 How can we forget, how to forgive.
The goal of state terrorism during the military dictatorship was not only to eliminate the life of the brightest young people of this generation and outstanding personalities but also to cause emotional, psychological and social harm to their families. My son Daniel was a victim of that terrible horror. Today would be his birthday December 4th."

For more:, she has some wonderful, if sad art.

And my poem in Spanish:

Este era un hombre cuya vida era puesto fin
Desaparecidos de ningún delito
Castigado por un tribunal sin ley
Cuando el torturador era juez, jurado y verdugo
Y no hay apelaciones.
El lema era;
"Usted debe haber hecho algo."
Se le ofreció como sacrificio a Wall Street Baales;
Un holocausto a los dioses falsos de comercio
Mientras que el mundo miró hacia otro lado
Y bailarines tristes bailaron un tango.

Rotten Boroughs, Poor laws

Mankind has always done better collectively, when worker and employer, city and countryside, rich and poor, looked out for each other. When John Locke used the word "commonwealth as a translation of "civitas" [see Commonwealth according to locke], he was creating a terminology for a world where "e pluribus unum" [Out of many Unity] could be reality. This concept of commonwealth predates Christianity, and the notion that one should protect those who can't help themselves is more Christian than not. One can think of Queen Elizabeth as expressing a progressive mood in England.

British Poor laws date to 1601:

"In 1601, England was experiencing a severe economic depression, with large scale unemployment and widespread famine. Queen Elizabeth proclaimed a set of laws designed to maintain order and contribute to the general good of the kingdom: the English Poor Laws. These laws remained in force for more than 250 years with only minor changes." [SocialHistory]
"Essentially, the laws distinguished three major categories of dependents:
  1. the vagrant,
  2. the involuntary unemployed, and
  3. the helpless."

Wednesday, December 2, 2015

Paul Simon Tells us how to win elections

The problem is all inside your head
She said to me
The answer is easy if you
Take it logically
I'd like to help you in your struggle
To be free
There must be fifty ways
To win an election
You Just slip out the back, Jack
Make a new plan, Stan
You don't need to be coy, Roy
Just get yourself free
Hop on the bus, Gus
Call all your friends, Sen
You don't need to discuss much
Just chop off the RW BS, Lee!
Tell them to serve US, or else!
And get yourself free
She said it's really not my habit
To intrude
Furthermore, I hope my meaning
Won't be lost or misconstrued
But I'll repeat myself
At the risk of being crude
There must be fifty ways
To beat the cons
She said "it grieves me to see you in such pain;
Let me explain to you how we can win elections again;
You don't need to be someone else or even a jerk.
You can do it, but it takes a lot of work
So I'll repeat myself
At the risk of being crude
There must be fifty ways
To beat the cons
She said we all have problems with Politicians who are jerks,
and their bad decisions are what it is that really hurts.
But you don't have to vote for them!
You don't have to vote for them at all!
So I'll remind you at the risk of being crude:
There must be Fifty ways to beat the cons!


Saturday, November 21, 2015

Pseudo Wealth -- or how the Wealthy fleece the rest of us

One of the means by which people are fleeced by our financial system is through misrepresentation of wealth. Some of this misrepresentation is deliberate. There are entire segments of the financial system that depend on "asymmetric information" and deliberate deception to make money. Much of this is perfectly legal. But some of this is the result of bad guesses, speculation. Both kinds of misrepresentation lead to cases where the apparent value of an economy is greater than it's actual value. This is literally what is known as a "bubble." I call them swindle bubbles, because often the effect is deliberate. As Stiglitz explains when explaining why economies are unable to borrow the money needed to reflate after a swindle bubble pops. The reason they can't borrow is that the bubble itself resulted from, contributed to and was eventually destroyed because of speculation. Indeed a kind of speculation that results in Pseudo wealth. Pseudo-wealth results from a kind of speculation where the aggregate perception of wealth is greater than true wealth. As Stiglitz explains:

"before the crisis" there are "differences in views, e.g. about the likelihood of the housing bubble breaking, gave rise to bets (speculation), which led to the creation of pseudo‐wealth — with both sides to the bet believing that they were going to win, both believed that they were wealthy, or more precisely, the aggregate perception of wealth was greater than true wealth. After the crisis, pseudo‐wealth got destroyed. Indeed, there was even negative pseudo‐wealth: borrowers may have believed that what they would pay, in expected value terms, to the lenders was greater than the leaders believed that they would receive." [Earlier Post]

Or more precisely, the system transferred wealth to those who "won" the bets, successfully swindled their marks, rigged the system, or had the greater economic power to enforce collection on the now bad debts, or the underlying assets that secured them. In good times people are induced to 'bet the farm'. In bad times, the farm gets taken by the house that made the loan.

Schrödinger's Cat Meets Creative Destruction

In essence pseudo-wealth is sort of the Economic equivalent of Schrödinger's "Schrödinger's cat" theory. People make bets, and nobody knows who is going to win the bet until the conditions the bet refers to materialize or fail. It's as if they bought a lottery ticket and acted like they'd won the lottery. Until the drawing everyone thinks they have something that it later turns out most of them don't have. Most people wind up realizing they've been wearing invisible cloth and owe a home or other security to pay for it. And since the folks who run the casino also manage most of the bets. The "Casino" or banks wind up with the real cloth and the homes given as security to buy the "fine cloth that only a fool can't see."

Pseudo-wealth and Rent Seeking

I refer to pseudo-wealth a lot so I wanted to highlight the idea. And it turns out that Schumpeter's "Creative Destruction" is simply the combination of the constant power of wealth to seize property from producers using pseudo wealth -- and bubbles -- and the operation of entropy (which makes all wealth perishable except the kind of pseudo-wealth that money represents) and inertia.

This is because there is another kind of pseudo-wealth. That wealth is the possession of notes with interest based on ownership of abstract entities like Banks, Securities, Corporations or any entity whose measurement is subjective, but where the notes are "on paper" or in "electronic form." Without the ability to con people, much of that wealth vanishes for the cons rather than the conned -- who usually are the ones who actually produced it. It's their dirty little secret, without constant refreshment of value, via transfers from production, for these entities they degrade and vanish on their own. Financial Capitalism only exists by swindling people. Without the ability to extract rents, the rent seeking fails.

Sources and Further Reading

Earlier Post "Joseph Stiglitz Slams Bad Economic Models
"Towards a General Theory of Deep Downturns Joseph E. Stiglitz"
Related Guzman Article:

1984 and The Koch's spying

Our Totalitarian GOP...And you thought SPECTRE was fiction?

Our current GOP candidates include some outright fascists. That is the only conclusion I can draw from their efforts to outdo each other in shameless fear-mongering over Syria and the remedies they offer of increased internal spying. After all fear-mongering over Ebola got many of them elected in the off-year election last year. They need the scapegoat of a "terror threat" to terrorize people into voting for them. These are spiritual vampires who live on fear. What can you expect? The fear-mongering is just "disaster" opportunism and newspeak.

But what worries me is that while the candidates call for official spying on "Arabs", articles like this one in Politico, The Koch intelligence agency By Kenneth P. Vogel details spying by them aimed at their real enemies; US. They can cynically say this is to "protect our freedom" but;

How does spying on us or increasing the restrictions on our movement and freedom of speech increase Freedom for all of us?

It doesn't. And it's not intended to. It's intended to protect the freedom of our oligarchs.

Wednesday, November 18, 2015

Piketty, Capital versus unearned Wealth

All Wealth is not Actual Capital And that Matters.

When I wrote "Disambiguating Capital from Simple Wealth" I looked at the confusing definitions of capital and realized I would have to use the term "actual capital" when talking about the sort of Capital that is valuable and to distinguish it from simple wealth. I realized that I was dealing with various newspeak definitions resting on sometimes deceptive moral arguments. When "productive capital" is extolled as the engine of "job creation", it is to defend an order of "capital" that is simply ownership of natural resources, raw materials, land properties and simple wealth. I realized soon on that this "deliberate confusion matters" because "capitalist" polemicists use the productive definition of capital to sell the notion of "capital" while in practice simply trying to justify a rentier economy where ownership of wealth guarantees rents from loaning money, property, business empires and monopolies.

Capital as Guaranteed Rent

Re-reading "Capital" I realized this confusion is deliberate. The nice thing about Piketty's book is that he dispenses with the gobbledy-gook and defines Capital as pretty much synonymous with non-labor compensation. He dispenses with the moral arguments and uses the definition of capital favored most by capitalists anyway. Piketty explains, explicitly, on page 49:

"To be clear, although my concept of capital excludes human capital (which cannot be exchanged in any market in nonslave societies), it is not limited to 'physical' capital (land, buildings, infrastructure, and other material goods). I include 'immaterial' capital such as patents and other intellectual assets ... capitalization"... "as priced in common stock and other corporate financial assets." [Page 48]

Yet as I noted in my "Disambiguating Capital from Simple Wealth" post, Actual Capital is only that part of wealth that is actually in use to fuel more production. Piketty is right to exclude "human capital" from that definition but, if he didn't, then there would be no national income belonging to labor as he:

By this definition, he has to admit that:

"To simplify... I use the words 'capital' and 'wealth' interchangeably, as if they were perfectly synonymous." [Page 47]

He admits that it would be better to "exclude land and natural resources." The problem he notes is that "it is not always easy to distinguish the value of buildings from the value of the land on which they are built." He also excludes the "actual capitalism" of wealth employed in the process of creating more wealth from his definition. It seems like he's abandoning all the moral definitions of Capital;

such as the Georgist argument as "[that] part of wealth—that [is] devoted to aid production" ... Capital is "wealth in the course of exchange." [Actual Capital]

So much for Georgism. But Piketty isn't talking about actual capital or any advertised meaning of capital anyway. He's talking about the power of wealth versus the power of labor. And this definition allows him to analyze what is actually happening with Capital. He admits he's talking about what the wealthy are talking about when they call themselves capitalists. He admits that it would be better to "exclude land and natural resources." The problem he notes is that "it is not always easy to distinguish the value of buildings from the value of the land on which they are built." And this is how modern "capitalists" describe their own wealth.

This allows him to lay out the math, intranational and international:

"National Income = Capital Income + Labor Income" [page 45 of Piketty's book "Capital"]

Which tells us that we can measure both capital income, Labor income, production and also measure inequality by measuring the disparity between wealth going to "capitalists" and other powerful rentiers who earn "capital" and the trickle reaching everyone else.

Capital as Wealth

For Piketty, the result is that he lumps together all kinds of wealth, only making a distinction between "national capital" versus "net foreign capital:"

"National Wealth = national capital = domestic capital + net foreign capital"

For Piketty's analysis capital is simply the "total wealth owned at a given time." This lets him reduce it to a formula, where the capital ratio is called "beta" [β] which is the ratio of Capital / Income:

"β = Capital / Income"

Income is a stream of production and products. A country with a high ratio such as "beta" [β] = 5, would be a country where the Capital Wealth of the country is 5 times the annual production. It can also be seen as a country with high savings of wealth.

Return on Capital

He then calls National Income "alpha" [α];, and gives it this formula, where r is the rate of return on capital:

"β = r x α"

Measuring Inequality

His analysis then ensues, and he masterfully shows the link between modern capitalism and feudalism as he talks about "return on capital" throughout History. From Ancient times to Modern Times and from the Third World to the United States. He captures inequality in chart after chart that graphically describes the disparities between growth of economies and the rate of return of capital. And how that "r" dominates both labor and arrogates growth (g).

For example he shows how the "r" in economies has always commanded more than labor. For example he notes how in the times of Balzac or Jane Austen the rate of return on land capital was about 5%. To get a rent of 50,000 Francs a person had to invest a million franks. [page 53] If the return on capital doesn't generate inequality, than even the capitalists also have to labor. Since inequality is as much a matter of social hierarchy, class and status -- inequality is necessary to the socially dominant in order to maintain their power. Later in the book he demonstrates that a person had to make 20-30 times the average wage income, which was 400-500 francs during that period -- in order to not live in misery [page 106]. To live in minimal comfort a person had to have an income of at least 15,000 francs. And to get that income they had to have "capital" (mostly in the form of rentable property or business property) in excess of about 450,000 francs. People assumed that most folks would live in misery. His charts show how rapidly we are returning to those times. They also show how national and international policy is driving "r" and that in turn is creating increasing inequality in most of the world, not just the United States.

Absurdities of Rent Seeking and Usury

Piketty goes on to describe in graph after graph the role of "return on capital" and policies favoring capital over labor in inequality around the world. Piketty talks about how wealth gets concentrated, and describes that concentration in chart after chart after chart.

Moral Versus Human Rights Arguments

Henry George and Marx were using "moral" analysis of labor and capital. By stripping off all the academic definitions Piketty used the definition of capital most comfortable to the capitalists. In the process, he shows that "r" or "return on capital" is mostly economic rent; interest, rents, even production - wage compensation; all are means to earn rents. Which means that "r" is really mostly unearned income derived from the power and privilege of wealth and it's monopolies and control of properties. So his material can feed back into Marxian, Georgist or any Post Keynesian moral argument. The problem with Marxist arguments is they tend to eschew the property rights of workers.

Accountable Capitalism
That Muddlehead Marx

Capital in the 21st Century

I'd suggest that folks read Piketty's Book Capital in the Twenty-First Century"" if they are interested in understanding capitalism in some depth. But for an idea of what to do about it, even more important is to acquire a copy of "Rewriting the Rules of the American Economy" by Joseph Stiglitz. That book refers to some of the charts in Piketty's book.

From "Rewriting the Rules"

"Skyrocketing incomes for the 1 percent and stagnating wages for everyone else are not independent phenomena, but rather two symptoms of an impaired economy that rewards *gaming the system* more than it does hard work and investment."

I've got a lot more to quote from and say from Piketty's "capital", but I think this summarizes what we have so far.

--Joseph E. Stiglitz, 2016. "Rewriting the Rules of the American Economy," p. 2.
Piketty's Book Capital
Rewriting the Rules of the American Economy: An Agenda for Growth and Shared Prosperity
Related Posts on Piketty
Progressive Taxation and Piketty
Two Kinds of One Percent
The Trouble with Capitalism
Genuine Tax Reform: Principles
Confusing Capital and Rental Opportunities
The Rise of the Predator/Parasite State
Capital Goods/Capital Yields
Actual Capital Vs Non Capital Wealth
Gresham's Law as a Tool of Regulation
Lincoln the Marxist!!!
Disambiguating Capital from Simple Wealth
Taxing the Right People for the Right Reasons
Progress and Poverty:

Wednesday, November 11, 2015

Bowser, Tents and the Homeless

I was in the District the other day for something. And I saw bright comfortable looking tents in the street. It was amazing. I thought it was some artists display or something. And then it hit me. These were the District of Columbia's homeless, in actual shelters!

Tuesday, November 10, 2015

Losing Control over the money Supply

Bretton Woods, NeoColonialism and the "Money Men."

In the final chapter of James Galbraith's book "The Predator State", titled "Paying For It", James Galbraith talks about Bretton Woods, how the United States opened itself up to becoming an open economy by turning over it's money supply to becoming the reserve currency of the "free world." The context of that was that the two previously dominant World Powers; France and Britain had failing economies during World War II. Their vast colonial empires had done as little for their masses as the previous vast colonial powers of the Spanish, Dutch, Portuguese and Belgians; while the USA had emerged triumphant from World Wars. We agreed to save those countries, their economies and the "free world" from complete collapse.

Monday, November 9, 2015

Second Bill of Rights versus Third Way

Third Way as Unsound Supporters of FDR

The New Democrats/Third Way People have a distinctive ideology that pay lip service to Franklin Delano Roosevelt but in actually contradict the ideology he expressed later in life. FDR lived a long life, even so even his earlier ideas represented a faith in markets that was tempered by a respect for the limits of Markets as a solution to problems. Right Wing Cons went after him as soon as it looked like their great fear of Communism had receded under the Banner of Ronald Reagan and his subversive recast of FDR's 4 Freedoms.

  1. Freedom of speech
  2. Freedom of worship
  3. Freedom from want
  4. Freedom from fear
See: Reagans Subversion of four freedoms post

FDRs Unsound Followers

When Market Solutions are Absurd

- Minimum wage and "labor Markets"

In February of this year I critiqued an article by Tim Worstall, 2/3/2015, of Forbes:

See: []

In my post I pointed out that his arguments were not supported by the Facts, but what I missed is that; even if Worstall's arguments were correct. There is a moral argument why a "labor market" is not a mere tinker toy to play with and try to fit into the Free Market mold.

For one thing as James Galbraith points out, referring to John Maynard Keynes (that savant who's been slandered and ignored for these past 35 years) noted; "There is no supply curve for labor",..."and that is essentially the entire story."

Friday, November 6, 2015

Third Way and the Fraud of Privateering

A Recap of Economic History

Back in 2007 James K. Galbraith wrote a book called "The Predator State." In chapter 11, titled "The inadequacy of Making Markets Work" he starts out with a pithy recap of where we are:

"Marxism used to be the hard-boiled left-wing dissident's creed, a doctrine founded on class conflict and the romance of working-class revolution. Unfortunately there were actual Marxist countries; "real existing socialism" took care of that romance. Meanwhile, Keynes and his allies in the progressive movement offered ways to reconcile the capitalists and the workers to avoid the calamity of revolution and the tyrannies that follow, through regulation and the management of total demand."

Saturday, October 31, 2015

The sabotage of the New Deal

How con artists corrupted the New Deal Part I

Continued review of James Galbraith's "The Predator State"

At the end of Chapter 8, "What the Rise in Inequality is Really About"; in his book "The Predator State" James Galbraith notes that:

"public policy"..."can create oligarchs", but also that it can "destroy them." [inequality-and-oligarchy.html]

Friday, October 30, 2015

Innocence is no reason to stay the noose

Today was a report in Slate about corrupt crime labs which reminded me that one of the lousiest Supreme Court decisions I've seen in recent years which was Herrera Versus Collins.

Dookhan & Farak Frauds

Our System that is supposed to be about Justice is corrupt and inept (and thus unjust) when it allows evidence from sloppy crime labs to stand as reported in the slate article concerning the Dookhan scandal up in Boston:

"Over her nine-year career, Dookhan tested about 60,000 samples involved in roughly 34,000 criminal cases." [Slate]

This is pretty awful, but what is really galling is the comment in the slate article:

"despite the fact that there were between 20,000-40,000 so-called “Dookhan defendants” (depending on whether you accept the state’s numbers or the American Civil Liberties Union’s), fewer than 1,200 had filed for postconviction relief.*" [Slate]

Most of these defendants remain jailed because despite their tainted evidence, prosecutorial power is so strong that they fear prosecutorial retaliation!:

Saturday, October 24, 2015

Taxing the right people for the right reasons

Can Unscrupulous Speculation be Solved with a Tax?

The Washington Post printed an article: "Poorer tenants fear being pushed out by planned Congress Heights complex"

"To build the project, the developer would have to raze four rent-controlled apartment buildings where residents already feel they are no longer welcome. The tenants are largely poor, elderly and live on fixed incomes. They said they believe they are being pushed out by two politically connected developers, who have failed to make improvements to the four apartment buildings even as many residents live in squalor."

Walter Rybeck, Silver Spring wrote:

"The Oct. 15 front-page article “Tenants in path of D.C. renewal” might instead have had the headline “Affordable housing remedy missing in action.” It told a sadly familiar tale: tenants in wretched dwellings unable to afford decent housing elsewhere, and slumlords given a green light to oust their tenants and proceed with lucrative real estate projects. This classic gentrification scenario cannot be fixed with housing subsidies or rules requiring developers to offer dwellings at below market rates, as many housing advocates urge. These approaches at best help a tiny portion of those in need."

In our modern "market" heresy the Bull of "markets" reigns supreme over common sense, common-wealth, common properties and our politicians. Admittedly one:

"...problem is high land costs — the sites that housing sits on."

High land costs aren't the only problem here. But it is a start. And as Rybeck notes:

"Officials and their advisers ignore the one tax that, unlike others, lowers the selling price of what is taxed: The more you tax the value of land, the lower its price. The less you tax it, the more its value rises, making housing unaffordable. Thus, shifting the property tax off the value of homes and apartments and onto the site value spurs slum upgrading and new housing at lower prices, as over a dozen Pennsylvania cities have demonstrated."

What he's talking about is a tax that ignores capital properties and home values and focused on the unearned value of property and taxes that. He's also right that:

"By modernizing its property tax, the District could lead the nation in easing the housing crunch."

But it won't do it by itself and simply changing the tax system may alleviate the problem, but won't eliminate it. Especially if it is sold as a tool for Development.

Getting it Right

By capital George meant:

"Capital is ... [that] part of wealth—that [is] devoted to aid production." and Capital is "wealth in the course of exchange." [Georges Definitions]

So the LVT tax was a means to get to unearned incomes and unearned rents. It wasn't meant as a tool for slum clearances, gentrification, or even "new housing at lower prices" -- it was meant to break the power of monopoly over land ownership. So, yes a LVT tax is a great idea -- but not by itself. Without tax reforms that exclude wage compensation and hit at unearned wealth -- it is a shadow of what George Had in mind. Indeed George called folks who advocated the LVT for the wrong reasons as "unsound followers." As long as taxes "fall on users of land as users, and ....add to the cost of production or increase prices" the tax solution is a Kludge and not what George Had in mind. Indeed the history of the Tax was that it was struck down by the Supreme Court as a Direct Tax and so George's followers started pushing it as a reform of the Real Estate tax, and when the 16th amendment was passed in 1913, they were already set in their ways.

A Right to A Decent Home

The other side of this is that home ownership should be a right - though not necessarily the right to a house or mansion, wages should be a right and wage compensation not taxed. This is something that American's have affirmed since the beginning of the country. And FDR put it in writing:

The benefits of a right to a home. Of "property in land," which includes tenants and renters. If tenants have a property right in their apartments, they'll take care of them themselves. Deny folks power over their own neighborhoods and this is what you get.

If home ownership were the right -- then the takings clause would apply to renters and tenants too. The District, or unscrupulous developers, or other authorities should not be able to take people's homes without compensating them -- with a new home. If one's home is a right they can't offer just money so that the person can move to another substandard neighborhood, they'd have to protect their right to home, livelihood, etc... And it would thus be more expensive to stiff people than to do right by them. Yes, if a person lost all their money or is a drug addict, and is poor as a result; a "home" doesn't have to be the mansion or a giant house they once lived in. But it also be a "Decent Home." It has to be a home that their wages can afford.

None of that will eliminate speculation. But certainly taxing unearned income, unearned rent, is a start at taking the smoke and gas out of the gasbags of repeated bubble swindles.

Sources and Further Reading

References to Rybeck
"Poorer tenants fear being pushed out by planned Congress Heights complex"
Walter Rybeck's Editorial: []
Georgist Definitions of Capital
Related Posts:

Friday, October 23, 2015

No Sushi for me

No Sushi for me.
It glows in the dark.
Cesium makes me sneeze
and iodine glows blue.
How can you live,
in Japan without Sushi?
They send ships to the end of the world,
because they can't fish in Japanese Seas.
It glows in the Dark too.
Is there something in the water?
Besides radioactivity?
Does this stuff make people crazy?
Or are they just mentally lazy?
It certainly does blow around the world on a breeze...
And their claims it is over are untrue.
No Sushi for me.
It glows in the dark.
Japan is committing Hari Kari
And taking us with them, too.

Note: no actual fish were killed to write this poem. And I haven't seen any fish literally glow in the dark, yet.

Christopher H. Holte, 10/23/2015

Wednesday, October 21, 2015

Inequality and Oligarchy

James Galbraith's 2008 book "The Predator State", touches on so much I consider important, I've been writing in installments. In Chapter Seven he touches on inequality:
"What the Rise of Inequality is Really About"

Galbraith explains how accounting for inequality has two sides. On the one hand is the disenfranchisement of what the Occupy Group came to call "The 99%", and on the other hand is the emergence of a billionaire class and oligarchy, as those benefiting from repeated finance driven bubbles start flexing their political-economic muscle using their newfound wealth. He notes:

"The Rise in income inequality reflects something that happened to a very small group of reflects, ... the rise of a new class -- very small and unbelievably rich. It did not come from the labor market at all. It came instead from the [financial] capital market. Specifically, came from the stock market."

Tuesday, October 20, 2015


Who would you rather be?
Ahab or Queequeg?
King Midas or a Gold Statue?
Helen or Cassandra?
We sail this ship together,
with a demented crew,
on a futile mission,
chasing a lost whale.
Christopher H. Holte 10/20/2015

Monday, October 19, 2015

Hillary and Jeb Bush's Donors are NOT the same

Hillary and Bush's donors compared

An examination of the Top 20 Donors to both Hillary and Jeb shows similarities but mostly differences. Their donors include Wall Street main-lights. For example Morgan Standley donated to both Hillary's campaign and Bush's campaign. But otherwise their donors represent a different base of rival oligarchs. Hollywood, entertainment and communications are strongly represented in Hillary's donation list and the Energy sector in Hillary's. All together, they are not supported by the same donors unless by 'the same donors' you mean one donor. So the argument that they are 'the same' is faulty propaganda, not truth. They are not the same

Jeb Bush/Hillary

Bush Contributor
Hillary Contributor
Morgan & Morgan
Neuberger Berman LLC
Sullivan & Cromwell
Yale University
Tenet Healthcare
Latham & Watkins
Rooney Holdings
Jeb 2016 (Employees)
Creative Artists Agency
Southern Strategy
Munger, Tolles & Olson
NextEra Energy
Dannenbaum Engineering
Simpson, Thacher & Bartlett
Hunt Companies
Centene Corp
Fidelity National Information Services
Manchester Financial Group
Paul, Weiss et al
Wilmerhale Llp
Gibson, Dunn & Crutcher
Google Inc
Guggenheim Partners