Middle Class Manifesto

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THE MIDDLE CLASS MANIFESTO

Preface
This article contains few new ideas. Most of the material here has been written or said before by many people. The idea of the article is to put together economic and social ideas that have been proven to increase the middle class, increase civil order, and move civilization forward. The ideas here come from many including Pikketty, Hanauor, Krugman, Marx. Yes, there I said it – Marx. The conservative ideal is a place with small government, low taxes, no regulations, and no unions. That is the eighteen hundreds. They want to push America back, not just before FDR, but before Teddy Roosevelt. Marx solution to the conditions he describes is Platonist, Utopian, unworkable, and just plain crap. But his analysis of the situation of the social and economic conditions of the 19th century are spot on. Since this is the conservative ideal we have to call on the best analyst of those times.
It is hoped that this article will be small, easy to read and easy to understand. It will try to present causes of economic and social situations, both negative and positive, using real world examples, actual situations, and true effects. It will look at the facts.

TAXES
It is a first principle of the conservative canon that lower taxes are the ideal. The fact is that for most of the expansion years of America taxes were quite high. Kennedy lowered taxes on the rich for 90% to 70%. Both numbers are quite high but the middle class expanded at its fastest rate in history. The amount of wealth accumulated by the baby boomers was the best the middle class had ever done. The American economy still runs largely on the pensions and savings of the baby boom generation. Gen X and the Millennials are encumbered by school debt and low wages and do not contribute much to the economic activity of the country. When boomers came of age they bought houses, furniture, cars. They had little debt from school, they were in apprentice programs for trades earning money, employment was high, labor was in shortage, and unions were gaining strength. Gen X and the Millennials have a great deal of school debt which has given them few marketable skills, weak unions, and several jobless recoveries. They aren’t buying stuff. Taxes are low but the money isn’t going into the economy.
It is the middle class that drives the economy. Taxes are not important. The expansion of the 90’s came after Reagan lowered taxes. But H. W and Clinton had both raised taxes. Reagan had raised taxes. In Kansas and other states taxes have been lowered. The Kansas economy is horrid. California and Minnesota have raised taxes on the rich and their economies are great. Taxing the rich to pay for education, infrastructure, social welfare drives the economy. This is a fact. Allowing young people to start out with education and skills and little debt allows them to buy stuff. That drives the economy. Young people who enter a labor market that is tight can do well. Entering the job market of the last thirty years has left young workers with low wages and little buying power. There was a short time at the end of the 90’s when employment was high and the labor market was tight. McDonalds was paying $14 and hour with health benefits. Many people got good wages and the economy thrived under Clinton’s higher taxes. The country ran a surplus. Then George the second lowered taxes, relaxed regulations, ran up huge debts, and we had a terrible crash. Work place participation is at an all time low, there is a great worker surplus, wages are low, the recovery was weak on job production and the middle class is in bad shape. Lower taxes have always led to debt, recession, lower pay and a weaker economy. There is no time in history where lower taxes have lead to an improved economy. The Kennedy tax cut did not figure in the economy of the sixties and seventies. It was from 90% to 70%. We will look at the reasons for the sixties later, but the tax cut had nothing to do with it.
Some asides about taxes. The present U.S. tax system is very regressive. The main body of people, more, than 90%, pay 15.6% tax right off the top, no adjustments, no deductions. The tax rate on the rich was 15%, now 20%. This is why Warren Buffet could say without fear of contradiction that he paid less tax than his housekeeper. He paid 15%, the housekeeper paid at least 15.6 plus income tax on top of that. When Mitt Romney had to show his income tax it showed he paid 14%. Most of the middle class pay 15.6 plus 10 to 15 for a total of more than 25%. We could change this by ending the cap on Social Security and Medicare taxes but still the main source of income for the wealthy is not covered by FICA. Capital gains, interest and dividends are not taxed by FICA. The Congressional Budget Office has said that releasing the cap on FICA would not save Social Security but adding capital gains certainly would.
There are other suggestions for a tax system. One of the ideas floated is a flat tax. But the tax mainly put forward still has special rate for capital income, normally no tax, as well as retaining deduction for the wealthy so they can still pay less. But let us put that aside and look at a true flat tax, no special rates, no deductions. A flat tax would have to be around 23 or 24%. This would still be on top of FICA but we could release the cap and everyone would pay around 35% if we included all income. This is of course not progressive. The poorest would pay the same rate as the wealthiest. The main argument for a flat tax is that it is simple. It is true, a flat tax is simple. Flat is a sufficient condition for simple but not a necessary one. Look at a system that is progressive and simple. Draw a graph with income as the x axis and tax as the y. Stick a pin in at $33,000 and zero tax and a pin in at $5,000,000 and 50% tax. Draw a line between the pins. The tax is very simple, find your income on the x axis, go up to the line and pay that tax. What you do with the line after 5 mil is up to you. Some countries may continue the line on that slope up to the highest income. Some may cap it at 50. The difference between the two systems is that in a flat tax system the rich pay less and the poor pay more. That is why some people push for a flat tax.
Let us try a different system closer to the present U.S. system. For the first $30,000 you would pay no tax. No matter who you were, no matter what you make. For every dollar you make over 30 but under $140,000 you would pay 10%. You would get to keep the 30 just like the poor, but pay 10% on 110,000. From 140 to 2.5 million you pay 25%. Again, you get to keep the thirty, pay 11,000 just like the middle class on the 110,000 but pay 25 on the income over that. Over 2.5 you pay 50%. It would be simple, progressive, and pay the governments bills.
Reagan’s differential tax rates screwed up the system completely. Deductions were bad enough but add in a different tax for capital income and the whole system went wrong. Before Reagan slashed the tax rate for the wealthy from 70% to 20% if you looked at an annual report of a company you would see that the CEO was paid about $175,000. After, you would see that the CEO was paid $175,000 plus 2 million in stock options. It was said that this was an incentive to do a better job as CEO. One of the most important facts to know is that there is no correlation between CEO pay and company performance. None. CEOs were allowed to take as pay capital gains. This was garbage. We could have fixed this at the beginning and said, no, income is income. If you didn’t have it yesterday and you have it today it is income. If you want the capital gains rate pay your income tax on your pay and then invest that in your company. Pay as capital gains and the differential rate is why company executives got so rich and workers got nothing. Wall Street is so rich because they claim all of their pay is capital gains. Bush dropped the rate to 15% and Wall Street and company executives got even richer. Meanwhile, worker pay has remained the same for 35 years. There was a short period at the end of the 90’s when pay went up but Bush’s depression rolled that back.
About deductions, they are perversion of the system. A deduction is just some Senator writing a bill that says my friend doesn’t have to pay taxes. They are what make a dentist in Bayonne a cattle baron. A basic accounting principle is to tie income to expense, expense to income. Every time we violate basic accounting rules we get in trouble. You can’t deduct the depreciation of a cow against a root canal. The concept behind them is to allocate capital within the system. It is supposed to keep meat prices down. But paying the right price for meat is a good thing and the cattle industry did just fine without them. Moving expenses around the system, moving loss around the system masks the true cost of things. It masks failure.
This looks like a good place to put in the Buffet rule. When it was learned that Mitt Romney paid only 14% Warren Buffet said he thought the rich should pay at least 30. This became known as the Buffet rule and some wanted to put it into law. The problem is we have the Buffet rule, it is called the AMT. According to law the rich should have to pay at least 26%. But the AMT is so riddled with deductions and special rates that in practice it only effects the upper middle class. When you pass a law with an intent you have to then look at the results. This is the scientific method. Experiment, then look at the results and see if they had the intended result. If not you declare it a failure and try again. The AMT is a failure. Enacting the Buffet rule would be a failure. What we need to do is fix the AMT so that it has the intended results. Remove the deductions and special rates. There could be some justification for deductions, there can be none for special rates, but in practice they have screwed up the system. Look at results, check the facts, then act. In this case removing all deductions is the only solution to what has proven to be a terrible action.
A last word about taxing the rich. It is always the said that getting rich is the American dream and without the rich there is no incentive and no dream. But you can still get rich under a system that taxes the income of the rich at a high rate. Buffet, Gates, Ellison, Zuckerberg would all be just as rich under a system that taxes income at a high rate. Unrealized capital gains are not taxed. You just have to build something. Cuban and Hanauor would not be as wealthy, Jobs would not have been, but you could still get rich. CEOs would not have the wealth they have but as I have pointed out their income has nothing to do with their performance. Sam Walton built a huge company that employs hundreds of thousands. Yes, the pay is crap, but in an environment to low unemployment even Walmart would have to pay better. Build something, employ a lot of people, and you can get rich. Even in an environment of high income taxes. Even on Wall Street you could get rich by backing the right horse and waiting for the growth. That is the idea of investing. It is supposed to allocate money to winning ideas. Wall Street is now dominated by get rich quick schemes, take the money and run. In the 80s it was leveraged buy outs, now it is derivatives. If the taxes on that money were high it would not be the dominant activity.
Another big source of revenue for any government is business. The thing is we tax company income and people’s property. That is wrong. The things people get should be theirs. And companies should make money. We should tax company expenses, what they use. If a company takes $20 of steel and makes something worth $40 that’s good. If it takes $20 of steel and makes something worth $200 that’s great. Especially now with globalization western countries want to reward high skill, high value work. Let someone else make the cheap stuff. Tax the expense side of the balance sheet not the income side. 10% income tax and 5% expense tax. Companies that lose money pay no taxes, that is rewarding failure. If a company is not making money it should go under. The worst tax of all is the VAT. Not only does it tax the very high value items you want but it is paid by the consumer. What is needed is a VUT, a value used tax.
Lastly, of course, is the estate tax. Friedman said that inheriting talent is the same as inheriting wealth. This is pure bullshit. Some of the best musicians I know are checking out groceries at Jewel Foods. Most of our best actors are doing summer stock and most of the actors you know should be. Talent is no guarantee of wealth and lack of talent does not seem to keep people from achieving it. Inheritance removes money from the system and violates the idea of a meritocracy. Giving your children a good start is a good thing but 20 million should do just fine. The idea behind Pinketty’s book is that we now again have a rise in dynastic wealth. This simply is a gross violation of the basic concept in this country of meritocracy. It is also a terrible drag on the economy. The movement of money, velocity, is the life blood of any economy. Locking it up in dynastic wealth in the hands of a few does no good and, as we now see, the wealthy work to pervert the system for their own benefit. Say we have a 70% estate tax. That would still leave the heirs of the wealthy with millions of dollars. Don’t tax the first 20 million. This would allow farmers children to inherit the farm, restaurateurs to pass on the business, and give the heirs of the middle class a really good start. Anything over that is a perversion of the system.
The most important thing about this is that it is tax policy that it drives the economy not monetary policy. Taxing the rich to build the country was what built America. Milton Friedman said that monetary policy was the sole influence on inflation. When Alan Greenspan came before congress to answer questions he was asked why, with low interest rates there was no inflation. He said it was a conundrum. No, Friedman was wrong. Inflation is too much money chasing too few goods. The sole influence on inflation is velocity and the velocity of money held by the rich is zero. Monetarism is bunk. For decades the Federal Reserve has tried to grow the economy with monetary policy and it has not worked. Taxing the rich to build infrastructure, provide education, create jobs is what grows the economy. The velocity of money in the hands of the middle class is about 3 or 4. Velocity of money in the hands of the poor is even higher. The catch phrase of the 80’s was a rising tide lifts all boats. We now see it lifts only those boats without holes. We also see that the ideas of the 80’s, supply side economics, monetarism, did not achieve the goal of a rising tide. You try some experiment, you look at the result and you evaluate the success. The experiment of the 80’s failed.

WHO ARE YOU
There are many ways to carve up the world. For people you can pick race, income, gender identity, height etc. I want t to carve up the political landscape so you can figure out where you fit.
There are three main slices of the political landscape. You can be left, right or center. Starting on the far right we find the Libertarians. They believe in almost no government at all. To the left of them but still on the right are the Republicans. This not the Republican party of Lincoln, the party born in Wisconsin, but would better be called Whig or Tory. They are the party of business and the rich. They believe in small government and low taxes. In the center on the right are the Democrats. They are the party who invented the phrase “I’m from the government and I’m here to help you”. Left of center are the Socialists. The American media calls anyone to the left of Reagan either socialist or communist but there are vast differences of the ideas of the left and center. Calling all people on the left or in the center communist is not very helpful. Socialist are close to Democrats, they are both in the center, but they vary in the degree of government intervention need. On the left, truly on the left, first on the right of the left are the Communists. They have taken Marx to heart and believe his solutions can really work. To the left of them, on the far left, are the Anarchists. They believe ….. wait a minute. We will get back to that but the most important thing is to know why one should take one position over the other. What is the philosophy that characterizes the positions. What are the basic ideas that separate one group from the other.
The thing that separates the left from the center and the right is a belief in economics. The center and right believe that economics is a science, that it has laws that hold at all times and in all circumstances. The left believes that economics is learned behavior. Marx got this from the Anarchists. The first law of economics is “whenever two people are together, scarcity exists”. Marx replaced this with “from each according their abilities, to each according to their needs”. This was a direct, purposeful refutation of the first law of economics. Economics has seven laws of production, Marx felt only four were need. Economics distributes production based on the laws of supply and demand, Marx believed in central planning. (An aside. There is no such thing as an anticommunist. To be anticommunist you would have to believe that communism is a viable system. The Soviet Union was a Fascist state that tried to impose a communist system. If you believe economics is a science you have to believe that its laws still held and that it would fail. Just as the Soviet Union did. But we could not fight them because they were Fascist because we were installing and supporting half the Fascist governments in the world at the same time they were installing and supporting the other half.) As for the Anarchists, the Harvard Dons rewrote history and mischaracterized ideas as they often do. They made Wellington, our enemy, the hero and Napoleon, our ally, the villain. They made Britain, who we fought two wars against, our friends and the French, who secured our revolution and who have never fired a shot in anger against us ( the French and Indian war was in 1740, we didn’t even exist, and was the French against the British as always) angry with us as they should be. The Harvard Dons made Anarchists bug eyed, wild haired bomb throwers. Anarchists are actually very peaceful. They believe no country should have an organized standing army. Their thinking is – no army, no war. They believe in no government, yes just like the Libertarians. The reason they incurred the rewrite from the Dons is that they don’t believe in money. No money, no rich – everyone would be equal. We executed the Rosenbergs for being Anarchists. Thank you Harvard Dons. Being and Anarchist or a Communist is not illegal in the United States but we executed two people just for that. Aiding a foreign government to the detriment of the country is treason, so is acting to subvert the democratic system. One of the big problems with the Anarchists is they really don’t have a method to achieve their ends. Marx wanted the masses to revolt but Anarchists think people should just organize themselves along their ideas. A sort of Gandhiesque method.
Both the center and the right accept the scientific nature of economics. But for the right the laws of economics have a moral component. You have a right to the money you get. The capitalist system provides a moral basis for what you have. And conversely, if you do not have, it is a moral failing. In both senses of the word, moral as in the right thing to happen and moral as in you are a bad person. Being rich is also moral in both senses, the right thing to happen and you are a better person than the poor. Rich equates to value as a person. The poor are worth less as a person. The outcomes of an unfettered capitalist system are the right, i.e. moral, outcomes. This moral characterization of capitalism is what has attracted the religious to the right. Libertarians are more interested in the unfettered personal rights than economics rights but a part their method is small government which leads to unfettered capitalism so they have to own it. Large government and unfettered personal rights are not exclusive it just seems to work out that way. The problem is while shrinking government to increase personal rights they would subject millions to poverty. It is also not a given, nor is it a historical fact, that small government leads to more personal rights. History suggests just the opposite.
The belief of the center is controlled by several factors. The laws of economic exist but have no more moral basis than the laws of physics. And their outcome is not a good in itself. The natural outcome of unfettered capitalism is 1% owning and controlling everything, 8% middle class, and everyone else in poverty. This is the dominant state in history, it was true in the 19th century America, the conservative ideal, and is the state of most of the world today. The center’s main theme is that the laws of economic must be used to engineer a better society. Just as one uses the laws of physics to build a bridge, one should use the laws of economics to build a better society. It is government that should be used to do this engineering while also maintaining individual rights. To the Libertarian the center says “the government is your best hope for retaining your rights”. It doesn’t always work out that way but it still what has advanced the rights of people the most so far in history. If a Libertarian sites Hitler or Stalin, OK you got me there. But I would say that the present governments of Western Europe, Canada, Australia, New Zealand, Japan, and the United States have advanced personal liberty far better than any other thing in history. Large government has also taken away those rights but it is not a given, one does not necessarily lead to the other. Nor has small government ever lead to more freedom.
The Democrats point to the Roosevelts as founding fathers. Teddy Roosevelt introduced the idea of government intervening into the functioning of capitalism. To the right this was the beginning of the end but things went up from there. Back in power the right brought on the Great Depression. McKinney, Coolidge, and Hoover brought back unfettered capitalism. There were many crashes in the 19th century but this was the big one. We lost farms to drought at a time when the farm economy was the economy. Taking that production out of the system began the drop. Hoover made things worse by continuing to foreclose on farms and take more production out of the system. The stock market crashed in 1929 but Hoover was in office three more years continuing the policies that caused it. The worst year of the depression was 1931 because of that. Then FDR came in with a New Deal. It can not be denied that FDR did not end the Depression but he put us in shape to win the war which did end it. That began the greatest expansion of the middle class in history. The GI bill created the educated middle class and unions created the skilled labor middle class. Eisenhower did his part by starting the largest public works program in history, the interstate highway system. There was a booming economy, a labor shortage, high taxes on the rich to pay for it all. It was government action that created the fifties, sixties and seventies. This history is what forms the basis of the center’s ideology.
The difference between the Democrats and the Socialists is one of degree with a slight difference in goals. Both want to engineer a better society. The Socialists think more government is always better and the Democrats think it’s best to find a balancing point. There is one fundamental difference. Socialists think the first priority is the basic needs of all. This is spelled out in the Beveridge report of 1942. It is the founding document of Socialism. Shelter, food, clothing, education, pension and health care for all is the most important function government must provide. Democrats think that the best way to do that is a social safety net and good economy. Socialism says “at least this much for all”. Democrats say “the most stuff for the most people”, but with a net. Engineering is the key for both. This will be a bit technical but a Socialist solution allows access to the general fund for all of the basics while a Democrat solution creates entities that do not access the general fund. In European countries old age pensions have access to the general fund. In the U.S. we have FICA, a separate fund for pensions. In European health care is provides by the state. We have, now, a system where private insurers cover most people but with a subsidy. Medicare is also handled through a separate fund. Medicaid has access to the general fund but states pay part of it too. We have kind of a mixed up system because of different parties being in charge at different times. And we have a different system because there is a difference between Democrats and Socialists. I am a Democrat. If you line up all the people in the world from right to left, Bernie Sanders and I would be standing shoulder to shoulder but the line would run right between us. Medicare and Social Security would be fine today if not for the actions of the right. As I said, the CBO says that releasing the cap would not fix them. But, if the middle class were getting the same piece of the pie today that they were in 1980 they would both be solvent under the present figures. It is the fact that 90% of the productivity gains have gone to capital, that 1% now take out 26%, none of it taxed for FICA, that has tanked the system.
Do you believe that the laws of economics hold in all places at all times? If you do you can not be on the left. Do you believe God created the laws of economics? If you don’t you can not be on the right.

ECONOMICS 101
If you do or create something someone else wants you get an economy. It is a natural state of human existence. There is a balance created between what you do and what someone wants. What is regulating this balance are the laws of economics. I won’t turn this into an econ course but it is really simple. And the laws of economics hold at all times in all places. What I will do is look at some general things we have learned promote an economy. A need for labor has always produced a better economy. That need is driven by demand. The civilizations of Mesopotamia need labor because of the increase of trade. In Egypt the building of the pyramids created demand. The pyramids were not built by slaves but by middle class craftsmen. The Greeks and Romans needed labor to expand and manage their empires. In Europe the plague caused the loss of millions and again labor was in demand and again a class of skilled craftsmen made up a middle class. To put it more clearly, supply side economics is pure crap.
The rich and powerful have always been with us. Every country now has its group of wealthy and powerful. The countries with the best economies are the ones with a large middle class. A middle class is a virtuous cycle. The more middle class you have the more you get. The loss of a middle class is a viscous cycle, the more you lose the faster the loss becomes. Throughout the 20th century the American middle class was the engine of economic activity for the world. That power is waning. We have locked up a major portion of our wealth in the hands of a few. They don’t buy stuff. They trade one instrument of the stored value of labor, that is what money is called in economic terms, for another. Say money for stocks, or money for debt. They don’t buy Buicks. They don’t recycle that value back into the labor market. Let me give you a simple example. There is a laundromat near me where I do my wash. As I do my laundry I watch the owner. He takes the quarters out of the machines and puts them back in the coin changer, takes the bills out the coin changer and takes them to the bank. People come in, put a five into the coin changer and take the quarters and put them into the machines. This is a very simple economy. But what if each time he took the coins out of the machines he took some of them to the bank with the bills. Soon he would have no quarters and his business would grind to a halt. That is what we have with the rich. They take money out of the system and don’t put it back in. As long as there is an excess this can go on, a strong economy allows some of the money to go to the rich. But it is the circulation of the money that creates the economy.
When I bought my first car the longest car loan you could get was 3 years. Now there are 5, 6, and even 7 year loans. Why? Because you can’t afford a car in 3 years. The rise in income hasn’t matched the rise in car prices. Henry Ford gave his workers higher wages because he said he wanted them to afford to buy what they were making. This is simple economics. The car lease was invented to move cars but it means you never own anything. People have refinanced their homes, taken out 5 year car loans, and put everything they buy on credit cards. The American people don’t own anything any more.
The economy is supposed to work like this. You build a Buick and buy a house, the carpenter builds a house and buys a Buick. It really is very simple. You make things, sell them to get money and buy things. The faster this happens, the better the economy. The larger the middle class the more gets built the more that gets bought. To increase the middle class history tells us a labor shortage is the best way to balance the power between the wealthy and powerful and the middle class. To increase the middle class the government should engineer a labor shortage. We tried giving the rich more money and it didn’t work. In 1980 the U.S. was the largest creditor nation in the world. The middle class had a lot of stored value in pensions, homes, and stuff they actually owned, not put on credit cards. The national debt was 100 billion dollars. Over the last 35 years we have become the largest debtor nation in the world. The nation is 18 trillion dollars in debt and the American people have nearly twice that in debt. This has kept the economy going. The government deficit spending and the boomers cashing in their pensions and the Gen Xers and Millennials piling on student and credit card debt has fueled the economy. Not the wealthy, their money has been locked away. The wealthy have taken 35 trillion out of the economy. The country and its people are 35 trillion in debt and the 3000 wealthiest people have 35 trillion. I wonder where they got that money?

HOW DID WE GET HERE?
Nixon. Reagan. Bush. Or in Bush’s case, Chaney. Just as McKinley, Coolidge and Hoover gave us the Great Depression, Nixon, Reagan and Bush, or Chaney, have gotten us to the spot we are in now. Nixon took us off of the Gold Standard, the thing conservatives now want to take us back to. (This is a conservative reoccurring theme. Great when we do it but when it causes the problem, someone else did it and we have to get rid of it.) This is not a bad thing if done properly. Carter did not use it at all. He decreased the deficit to the point where the only thing he wasn’t paying was the interest on Nixon’s war debt. The debt was 100 billion. It was very manageable. Reagan used the lack of the gold standard to push our debt to 3 trillion, in a 4 trillion dollar economy.
Nixon invented the FFB. Yes, it’s complicated. But simply put the FFB is a capital expense account for the federal government. The problem is the federal government has no capital expenses. An example of this is the company Worldcom. Worldcom booked ordinary expenses as capital expenses. OK, that didn’t help. Just know that Worldcom went bankrupt. The FFB was created to hide the expenses of the Vietnam war. I said before, anytime you violate the rules of accounting you get in trouble. This was the beginning of the federal government’s shoddy book keeping. For the last 20 years the Auditor of the United States has said that the books of the federal government are crap. The law says that the Treasury department must produce an annual report of the finances of the federal government, just like every business must do. The law says that it has to be audited by the Auditor of the United States. The law does not say what should happen if the auditor says the books are crap. It was assumed this would never happen. It was assumed that if it did happen the press would be in an uproar. But for 20 years the press has reported the numbers from the White House press release. Reagan used the FFB to hide the cost of “Star Wars” and his build up of the military.
Reagan’s part in this has already been mentioned several times. The special capital tax rate, the ballooning of the national debt, reducing the regulation on savings and loans. Oh, I didn’t mention that. Reagan snuffed out an entire industry by encouraging saving and loans to take riskier bets to get bigger returns. The entire industry failed. It cost us 500 billion dollars. And spawned the mortgage industry that tanked us in 2008. Saving and loans were quiet, safe businesses that provided safe loans for houses. When they went under a new industry was born, the get rich quick mortgage loan business. They were the ones who gave out shoddy home loans, packaged them up, sold them to Wall Street who sold them to you. Reagan brought in supply side economics and the trickle down theory. In the beginning this was stupid. It had no basis in economics, it was illogical, and we now know from 36 years of testing it that it is a complete sham. But Republicans still are selling it today.
Bush brought us Chaney, that alone should mark him as the worst President of all time. The continuation of the policies that had gotten us into the mess we were in worsened the problem nearly to the point of no return. Hoover’s depression came at the beginning of his term. Bush’s depression came at the end of his term. We got a Democratic President and Congress or else we would have gone under. Bush bailed out the banks but without the bailout of the country under Obama we would have never gotten out of the hole Bush dug for us. Stick with me for a while. In January of one year of the Bush administration they had to recall 150 million pounds of hamburger. That’s a lot of beef. The way the Bush administration regulated food was by monitoring the emergency rooms at hospitals. People got sick, recall the food. If you take way the meat inspectors you get bad meat. They took way the bank examiners, we got bad banks. The crash of 2008 was identical to the crash of 1929. We never learn anything. There were excesses in the financial markets, in 1929 penny stocks and margin, then a part of the economy fell apart, in 1929 it was the farm economy, and the financial institutions were not prepared and collapsed. In 2008 it was the housing market but the financial institutions were supposed to be prepared. We had passed dozens of laws to keep it from happening again. Some of those laws had been weakened it’s true but the real reason for the crash was illegal activity by the banks. There was out right accounting fraud. There were violations of the Banking Act of 1847. Things we knew were wrong in 1847 were being done under the Bush administration.
The signs were obvious. In 1960 the housing affordability index was at an all time high. In 2007 it was at an all time low. There financial pundits were saying “don’t worry about housing prices, there are 3 million people who need homes”. But there was no one to buy them. Housing was going up at 20% per year and wages at 1.5. In 1980 the Occupational Handbook said that we would need 500 thousand new professors and 2 million new teachers because of retirements, those were good jobs to go into. It was true, we did need those teachers but they weren’t hired. Instead we got 40 children to a classroom and adjunct professors. Someone had to spend the money to hire those teachers and we didn’t. Millions do need homes but they have to have the money to buy them and they didn’t. Need isn’t the key, ability is. In December of 2006 Seth Tobias was asked where he thought the S&P 500 would be at the end of 2007. He said 800. People said no, really, where. He said 800. The number was right, he was only off by one year.

RELIGION
2700 years ago a man called Thales asked a simple question. Thales was a Greek priest. He knew how to throw the bones to predict the future. He knew how to sacrifice the goat to appease the Gods. But he asked a question. “What can we say about this rock. Surly this can have nothing to do with the Gods, so what can say about it.” That was the beginning of science. We had discovered many things before Thales, like the wheel, the screw, numbers. But all of these ideas were born out of the practical, from need and happenstance. Thales wanted an answer to a question just to have the answer. The Greek civilization flourished. We got philosophy, abstract mathematics, democracy, and unfortunately, many new forms of weapons. Whenever science in the ascendency we get advances in civilization. Whenever religion is in the ascendency we get dark ages. The Roman Empire faded as Christianity rose. The advancement of civilization moved to the Arab world. Art, culture, science advancements came for there. The Arab world is why we know about the Greeks. They kept the books and ideas alive. Then fundamental Islam took over in the 12th century and they have been in the dark ages ever since.
Marx said that religion was the opiate of the masses. This not a statement about religion but about the state of the masses. Opium was a drug at the time prescribed to relive pain not the horrible scourge we know it to be today. The countries that tried to install communism outlawed religion but where unsuccessful because the conditions of the masses did not improve. The place where religion fell away the fastest was in the West. As conditions and education improved religion became less strong. Our constitution says Congress shall make no law respecting religion. It does not say with respect to, it says respecting.
Religions are the main source of the worst problem we face today. Over population has depleted resources, fouled the environment, and left most people poor and starving. There is no way the Earth could provide a middle class living for 7 billion people. At 2 billion this would be heaven, at 7 it is hell. No wonder religions can sell heaven. The problem is that inherent in all religions is a tribal maintenance mechanism that tries to put as many of its adherents on the planet as possible. Subjugation of women, keeping them only as breeders, barefoot and pregnant, is one of the outcomes of this mechanism. Outlawing of homosexuality is another, although I think latent homosexuality in men has a lot to do with the prohibition as well. We need to reduce the population but in the places where that is happening the counties are terrified. Many of the counties of Western Europe have a decreasing population, this is a good thing. It is the natural outcome of the weakening of religion. But they have put in place programs to try to increase their population. This is the tribal maintenance mechanism at work. China is trying to reduce its population but it is going about it all wrong. The one child law is causing problems of its own. I have a suggestion. Instead of the one child law promote 30-30-30. Thirty years for learning, thirty years of breeding and child rearing, and thirty years of retirement. Rev up the computers and you will see this will stabilize the population much better. Encourage women to wait until 30 to have children. This will allow them to be in a stable financial and social relationship, and give each generation room to live. It will allow women to get an education and skills they can use when their children a grown. It will give them time to live. Notice I said encourage, do not make a religion out of this.

THE ILLEGITIMATE GOVERNMENT
There is a small body of rich, powerful men and their minions who have worked in a concerted and coordinated effort to take over the United States. And they have succeeded. They have controlled the Supreme Court for 30 years. This why we have gotten rulings like Citizen United, Hobby Lobby, and the gutting of the voting rights act. They have worked, in a coordinated effort, to exploit our Constitution for their own benefit. They have spent billions to convince particular areas of the country to vote against the peoples better interests. A simple example. North Dakota was once the most progressive state in the country. Millions were poured into the state to change it into a conservative state. Control of the media, selection and backing of particular candidates and other efforts changed the state. Why? Every vote for Senator in North Dakota is worth a thousand in California. More people cast a vote for a Democratic Senator than a Republican. But the Senate is controlled by the Republicans. Surly this could not happen in the House of Representatives, the house of the people. In 2010 millions were spent to swing a few states legislatures. Those state representatives then Gerrymandered their house districts. Gerrymandering is illegal. All a citizen of the state would have to do is take the vote and the result to the Supreme Court to force them to redistrict. Oh, right, they got control of the court thirty years ago. More votes were cast for a Democratic Representative than for a Republican. And as we all know the Republicans have lost six out of last seven Presidential races. This has happened, not by accident, but by a concerted coordinated activity of a small group.
Rupert Murdock is a part of this group. He has worked to install conservative governments in Australia, New Zealand, Great Britain and here. And he, along with a small group of other conservatives has succeeded. This was not done because of an ideological belief. This was done solely for the purpose of self interest. Acting in your own interest is not a crime. But working with others to subvert the democratic system for person gain is. If you look at the Cabinet, donors and advisors of Reagan, Bush, and now Trump you will see the names. 25% of those people are true believers. 50% are hangers on and sycophants. The last 25% are the ones who have acted in consort to achieve an end solely for their own greedy and power hungy ambitions. And they have succeeded.