A Philosopher's Blog

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Archives for November 2011

Reforming Congress

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The western front of the United States Capitol...
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While congress has a rather low approval rating, the members of congress do not seem very inclined to do much to change this. One obvious reason is that most members of congress know that they will be re-elected despite the overall low approval ratings. As such, they have little incentive to change their behavior.

The folks in congress, like most politicians, have two main goals. The first is to get re-elected. The second is to profit from their office. Unfortunately, the chances of a member of congress being re-elected does not seem to be strongly connected to actual job performance. Rather, the main factors seem to be party affiliation, financial resources, the gerrymandering of the district, and political connections. This means that incumbents will tend to be re-elected. There have been, of course, some notable exceptions to this general rule. For example, some Tea Party candidates were able to get elected and, of course, Weiner’s actions cost his his seat in Congress. However, the electoral success of the Tea Party did not result in an improvement in Americans’ approval of congress-quite the opposite in fact. Part of this is no doubt due to the hyper-partisanship that marks today’s congress and has preventing the usual political process of compromise. Part of this is due to the fact that the Republicans seem to be devoted to beating Obama rather than actually doing what should be done for the good of the country. Part of this is also due to the fact that the Democrats seem to be unwilling to take decisive action. In any case, congress is doing a terrible job, yet we keep re-hiring most of them year after year. Or, more accurately, they are able to do what it takes to stay in office while, at the same time, not doing what it takes to be seen as actually accomplishing things.

I would like to make a few modest proposals.

First, I would suggest term limits. While the term limit on the presidency was set to keep a specific president from getting another term, term limits do seem to have some merit in that they enable more turnover and reduced the concentration (and hence abuse) of power. On the minus side, term limits would prevent the most experienced members from returning (although they could go on to other careers). However, the good of such limits would seem worth the cost.

Second, I would suggest somewhat longer terms for those in congress. This would allow them to be less locked into focusing on re-election and more focused on doing things.

Third, I would suggest an end to gerrymandering. While there are some arguments in favor of this practice, CNN’s recent piece on the matter shows that the harms of the practice seem to clearly outweigh the alleged benefits. The end of this practice would mean that the folks in congress would need to work harder to earn their re-elections.

Fourth, I would recommend that there be strict spending limits on campaigns and that these limits be set rather low. This would help offset the advantage of incumbents and would change the focus away from raising money (and also reduce the amount of corruption).  Naturally, there would need to be a way to compensate for this-such as “free” air time for the candidates.

Fifth, I would also suggest strict limits on donations and the elimination of super PACS. Corporations would be able to donate, but this would also need to be limited and such donations would need to be a matter of public record. This would not interfere with free speech-after all, everyone would be able to express their views-they just would not be able to buy politicians. After all, if spending money is free speech, then simply buying politicians would seem to be free speech.

Sixth, I would suggest that all lobbying must be a matter of public record-the public has a right to know what their elected officials are being offered in return for their services. This does not impeded freedom of speech-after all, freedom of speech does not warrant a freedom to corrupt and bribe.

Seventh, strict restrictions need to be placed on how members of congress can profit from their offices. This would include limits on gifts and put an end to insider trading. I would even be for a wealth cap on members of congress (the excess would be contributed to the budget, preferably for things they vote for)-after all, they should lead the way when calling for sacrifices from the American people.

Does anyone have any other ideas?

 

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Cain

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DETROIT, MI - OCTOBER 21: Republican presiden...
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Cain is facing another potential crisis: Ginger White has come forth to apparently claim that she had a long lasting affair with Herman Cain. As might be imagined, this is not exactly good news for Cain’s lagging campaign.

Cain immediately denied the accusations, while noting that he did know the woman. His handling of the situation was better than his handling of previous accusations-thus showing that Cain has learned at least a bit about damage control. However, his lawyer released a rather odd statement which, as the pundits noted, does not seem to be the right sort of thing for a politician to issue for damage control. This shows that Cain needs to improve his organization and how it handles damage control-assuming that he is able to endure.

At this point, this is the classic “she says, he says” situation. Cain made an immediate and unequivocal denial which counts, to a degree, in his favor. After all, lying about an affair will generally do more political damage than admitting to an affair. Thus, a lie would not be very sensible and hence would (or should) be the less likely approach by Cain. Given Newt’s and Bill Clinton’s success, Cain should be aware that politicians who have affairs can do quite well.

That said, politicians have been known to lie about such things-even when the lie is far more damaging than the truth. Anthony Weiner is, of course, the most recent example of such an incident.  The statement Cain’s lawyer released also muddled things a bit-while the legalese seems to be aimed any saying that Cain did not have an affair, the overall impression is seems to create is more along the lines of  “if he had an affair, it is t the business of the media or the public.” This is hardly effective damage control and makes it seem like a set up for an admittance of wrongdoing. However, anyone who is familiar with legalese will point out that the statement is the sort of thing a lawyer would create even if his/her client did nothing at all. As such, the statement is hardly decisive evidence.

In regards to the woman, little is known about here. On the face of it, lying about this matter would seem to be a rather odd sort of thing-after all she is, as the pundits have noted, exposing herself to the full scrutiny of the media and laying her reputation on the line. Her accusation, if false, might even be considered slander or libel-given the damage such a charge could do to to Cain. As such, she would seem to have very good reasons not to make a false accusation.

However, one key point (as noted above) is that little is known about the woman, her credibility and her possible motivations. Until more information is known, the most rational thing to do is to suspend judgment on the claim against Cain.

If Cain is telling the truth, then he might be able to make a gain in the polls because of such a false attack. It would also give him some “armor” against ant future attacks of a similar nature.

If Cain is not telling the truth, then his campaign would probably be sunk. However, Bill Clinton was able to sludge with way through worse situations and hence there is a clear precedent for such political survival. Cain is, like Clinton, something of a charmer-but whether he is up to a Clinton level game is something that would have to be seen.

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NBA and Pay

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Various Federal Reserve Notes, c.1995. Only th...
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While baseball is supposed to be the American sport, we Yankees are also rather fond of basketball. As might be imagined, the ongoing NBA strike has caused dismay to the loyal fans (a group I do not, in fact, belong to).

The strike, like most strikes, is the result of a dispute between the employees (in this case the NBA players) and the owners As the players see it, they are not being fairly compensated for their efforts. The owners disagree. Because of this impasse, basketball fans will not be seeing any NBA games for a while.

On the face of it, this sort of strike might strike most people as rather absurd. After all, the mean average salary in the NBA is $5.15 million and the median average salary is $2.33 million. The low end salary is about $300,000. Given that the average household income in the US is $50,000 it would seem that the players have nothing at all to complain about. After all, the lowest paid player is still vastly better paid than the average American household.

On one hand, it is easy to dismiss the NBA players as being greedy. After all, almost anyone in the world would be very happy to make that sort of money working hard, let alone playing a game. These players are, obviously enough, extremely well paid and it would be rather odd to say that they are suffering an injustice because of their salaries.

On the other hand, the fairness of a salary is not simply a matter of the amount being paid.  To be specific, the fairness of a salary cannot be judged simply by the dollars being paid.  Other factors must be considered as well, such as the value and amount of the work being done. For example, if I said that someone was paid $12,000 a year it might be tempting to say that she is underpaid. However, if you then learn that the person only works one hour each month, then you might change your mind and think that she is actually overpaid. But, if your learn that each hour of work she does generates $5,000 in profit for her employer, then you might change your mind again and think that she is actually being underpaid for what she does.

In the case of the NBA players, it is not simply a matter that they want more money. Rather, they want a larger percentage of the profits (which, of course, means more money). The NBA players are able to command such high salaries because their play generates massive profits and they believe that they deserve a greater share of the profits that they generate. The owners, who generally do not get out on the court to play in the games, believe that they are (as owners) entitled to a significant share of the profits.

While the NBA players are coached and trained, people obviously pay the rather steep ticket prices to go see the players play. They do not go to see the owners count money. As such, the players are the main source of profits and, it could thus be argued, should be paid based on this contribution to the profits. The owners, in turn, should receive compensation based on the value that they contribute (that is, to the degree that their actions generate profit).

Thus, while the NBA players enjoy rather hefty salaries, the dispute is still the classic dispute between the workers and the owners over who is entitled to what percentage of the income.  As noted above, the theoretical solution is easy enough: the workers are entitled to the value they create through their actions and the owners are also entitled to the value they create. Anything else would seem to be theft. As might be imagined, sorting out this division can be rather tricky. In the case of the NBA, people come to see the players. But, of course, the owners also play a role in making the professional games a possibility. After all, if the players just played on a public court and passed the hat for money, they would obviously not make the money they do now.

This same question arises in other cases of employment. For example, FAMU charges $124.01 per credit hour for in state students, and out of state tuition is $552.03 per credit hour. This does not include other fees. I have 193 students taking three credit hours this semester and will have at least 160 in the spring.  As such, my labor does bring in a fair amount of money for the school. This, of course, only includes my teaching and excludes my administrative work (which is 20% of my assigned work-my four classes per semester are only 80% of my assigned work). As you might guess, my salary is way, way less than what the university charges my students to suffer through my classes. Naturally, there are various expenses involved with the students being in my class-the cost of the buildings, administrative costs and so on. As such, perhaps my salary is fair-that is, when all the legitimate costs are subtracted from what I bring in to the school what is left is what I am, in fact, paid.  However, if what I am paid is less than what I generate (minus the other legitimate costs) then my salary would seem to be unfair to the degree I am underpaid for my efforts.

Of course, my university is not aimed at making a profit and hence this almost certainly changes things. When a for-profit business is considered, one rather effective way to make a profit is to pay workers less than the value they actually create through their labors. As many other have argued, a profit tends to require that someone is either being paid less than the value they provide or is paying more than the value they receive (on the customer end). The stock counter is, of course, that the people who get less or pay more value what they get (either the paycheck or the product/service) more than the other party.  To use a made up example, imagine that my workers value the time they put into making one of my widgets at $1, but they actually contribute $2 to the value of the widget. That would enable me to (at least) make $1 profit per widget with no one feeling they have been treated unfairly. Of course, if they knew that their work was worth $2 rather than $1, they would no doubt see me as acting unfairly. Of course, I could also profit from the customer. If it cost me $5 to make and sell a widget and my customers valued it at $6, then I would make $1 profit per widget at the expense of the customer. Of course, if they knew that the widget could be bought for $5, they would probably feel cheated as well. Of course, if I could convince them that I have a right to a profit (that is, money for nothing and perhaps some chicks for free) then they would think that it was fair. The challenge is, of course, justifying that profit-after all, it does seem to be by its very nature money for nothing. If it was money for something, then there would seem to be no profit left over for that money would have to go to something.

But, one might object, my brief discussion is simplistic and naive and fails to properly capture the reality of the financial situation. That is, profit can be generated without anyone being treated unfairly and without concealing any facts.

Going back to the NBA players, it is obvious that they are very well paid. But it is not obvious that they are actually being treated fairly by the owners.

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Numbers of Note

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Steve Jobs while introducing the iPad in San F...
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Some years back, my mother got me a subscription to Funny Times. While it is a somewhat left leaning publication that focuses on humor, each issue features “Harper’s Index” which includes various interesting numbers-often juxtaposing them for impact. While this is hardly what one would consider an academic source, the numbers can be easily checked. Naturally, there is always the point of concern that not everyone (even the experts) agree on the exact numbers-but these sorts of disputes can be rationally addressed.

One interesting number is that 71% of the current US debt was accumulated during Republican presidential terms. This is hardly a shock-after all, while Democrats are presented as wasteful spenders and for a bloated government, the modern Republicans have been the ones to really push spending. This is not, of course, to absolve Obama from the debt that has arisen under his administration. However, a fair assessment of his performance requires noting that he started in a deep hole of debt and in the downswing of an economic meltdown. Or, to use another analogy, he became captain of a stricken vessel that was running towards the rocks. Some generous folks might say that keeping the vessel afloat was a notable accomplishment.

While the latest Republicans have been inclined to rage against lifting the debt ceiling, 2/3 of the times the debt ceiling has been lifted have been under a Republican president. While debt is a serious problem, the righteous indignation of the Republicans thus seems a bit strained.

The common wisdom of the Tea Party and many Republicans is that we are taxed enough already and that America is crippled by the cruel lash of the taxman. While I am not a big fan of taxes, this is hardly a time of cruel and unusual tax burdens. In 1961 US corporations paid 40.6% of their profits in taxes. In 2011 the number is 10.5%. Some companies, as has been noted in other posts, pay no taxes. The fact that companies are showing amazing profits and are flush with cash shows that the idea that they are languishing under cruel and excessive taxes is hardly an accurate portrayal of the situation. Now, if the big companies were struggling and short on cash due to high tax rates, then there would be grounds for complaints. However, the myth of the tax monster is one that plays well in many ears.

While the big corporations are generally doing great, the rest of us are not doing so well. 18.2% of Americans have reported that they ran short on money to buy food in 2010. The median wealth of white Americans has dropped 16% since 2005 while Hispanics have seen a decline of 66%  in household wealth since 2005.  One possible reason for this is that the “job creating” corporations have followed the practice of depressing wages. This has yielded 75% of the increase in their profit margins since 2001. In short, the “job creators” have been “creating” wealth by paying people less. That is, of course, an effective way to increase profits. However, it bodes ill for the people who are working ever harder and longer for ever smaller paychecks. As might be imagined, corporations benefit greatly from weakening unions since they tend to work at keeping wages up.

It might be argued that corporations are just engaged in smart business-paying people less means, obviously enough, more profits. Of course, this also has the impact of lowering the money that people spend into the economy-at least in the case of those with lower incomes. As has been pointed out, the wealthy do a great deal of spending-so perhaps they can sustain the economy as the middle class dwindles in size and wealth. Perhaps someday we will see a return to a two class (poor and rich) system. However, this would most likely lead to a revolt on the part of the former middle class.

It could be argued that people can just work hard to make money or create their own businesses. However, making wealth is not a matter of hard work. For example, the Chinese workers who make iPads and iPhones work very hard-but they will not become rich working for Apple. The real money lies in getting other people to work hard for you for as low wages as possible.

Of course, trying to create a business means competing with established businesses who will tend to well connected and who have spent millions on lobbying to ensure their advantages. People can, of course, succeed in this-just as some people can run 100 mile races, play pro ball or kill a tiger in hand to hand combat. However, the odds are not very good-so most folks are stuck working for others with little or no chance of creating a successful business of their own. Some would say that this is fair and hence people who are poor or out of work have only themselves to blame for not being rich.

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Newt

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Newt Gingrich
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As I write this, Newt is doing well in the polls. Earlier this year, it looked like Newt was done, but he has managed to apparently get back into the game. Of course, it is important to note that he has made gains as the other candidates have suffered losses in popularity. The polls do not seem to have a “none of the above” option, so perhaps his surge is simply do the fall of the others. That is, it is not so much that more people are really hot for Newt-it is just that they will check the Newt box in preference to the alternatives.

The general pattern for the Republicans has been a surge from one candidate followed by a fall after some self inflicted injury or other problem. Given this pattern, it is not unreasonable to expect Newt to last but a little while before he is brought down (or brings himself down). Newt does have a lot of established baggage and the media has been exposing more recent apparent problems, such as his multi-million dollar involvement with Fannie Mae. Naturally, he is trying to spin these problems and is being aided by the fine folks at Fox (while the merry minions at MSNBC go after him).

While Newt is clearly a person who has some dubious ethics, he is also a smart guy and a very experienced Washington insider. He is well connected to the established political machinery and has plenty of ties with big money. That is, he is a classic old school politician who knows the game and has the resources to play it well.

Give Newt’s abilities and resources, he does seem to have a chance of getting the nomination. Although Romney has been consistent in the polls (mainly because Romney has not done anything stupid on camera), Romney is not beloved by the base. With some shrewd political moves and some self-control (Newt has often proven to be his own worst enemy) Newt could squeak ahead enough to beat out Romney. In that case, I would expect to see Romney as the VP candidate. Another possibility is Romney as the presidential candidate and Newt as the VP.

Newt would stand up well against Obama in debates and Newt is generally adept at handling damage control. However, he would need to keep a tight rein on himself. But, I would be willing to say that he would have a shot at it. Obama would, obviously enough, easily defeat Perry, Bachmann or Cain in an actual debate. After all, they seem quite adept at defeating themselves-Obama would probably merely have to stand there and observe the self-destruction. Newt though is amphibian of a different stripe-he would stand up ably to Obama and could do quite well.

If Newt were elected, he would most likely be an old school politician in the way he would handle things. Newt knows how to use politics to his own enrichment and advantage and it seems reasonable that he would function as president much as he did as speaker. Given his experience as an insider and his intellectual abilities (plus what appears to be a lawful evil alignment) he would probably do quite well as a mostly pragmatic president. He would also parlay his election into massive personal gain after he left office-Newt is no fool and is in it to win it (for Newt).

That said, Newt might just burn out and hit the ground, like the others before him.

So, what do you think of Newt’s chances?

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