R.P. Barr

Reasons why

On 60 Minutes this week, the new Jobs Czar, Jeffrey Immelt, CEO of General Electric asked why people don’t cheer for the success of big business.  He claimed that people in other countries take great pride in their flagship businesses.

 Jeff, I wish that I had a personal story about GE, but I’m sure  someone does.  We’ve all got stories of encounters with big businesses.  I’d like to tell you about Richmond American Homes.

 About a decade ago, my wife and I were shopping for a townhouse.  There was a construction boom in our area so we found several model homes to review.  The one we liked best was by Richmond American Homes.  Since the home hadn’t been built yet, we got to select the floor plan and a number of options.  It was the American dream, modestly speaking.

 Now, flash forward nine years.  The wood around the front door and garage door was rotting.  That’s not right.  We repainted a few years before.  With a vague memory of a ten-year warranty, I called Richmond American.  That wasn’t as easy as it seems, since they close down and open up offices as they start and complete developments.  Anyway, I tracked them down and was told that Richmond American only handles the first two years of the warranty.  Then, they pass the responsibility along to an insurance company.  They gave me the address. 

 I wrote a letter to the insurance company and included photographs.  They asked me to read my policy.  The only document with their name on it was a “Sample” policy.  The word “Sample” was stamped on every page.  But, apparently this was also their actual policy, and it clearly stated that the warranty did not apply to water damage.  I asked what possible defect on the exterior of a house would not involve water damage?  They simply reiterated that rotting wood was a sign of water damage and they didn’t cover water damage.

 I looked around the neighborhood and found that virtually every home had damage similar to mine.  I decided to put together a class action law suit.  My damages were only a few thousand dollars, hardly enough to interest an attorney, but everyone together—well, that would get the juices flowing.  I went door to door with the goal of gather 20 names of people willing to be part of the class.  Once I found a willing lawyer, then I could go after the hundred or so others. 

One home owner declined to join the suit.  He said that the houses were built according to code and so we didn’t have a leg to stand on.  That got me thinking.  How did he know they were built according to code?  I contacted the county and learned that all wood used on the exterior of homes had to be weatherproof.  The wood on our homes clearly wasn’t.

 I called around.  Several local attorneys were not interested in suing a big company with deep pockets.  Then, I found someone who would talk to me.  I brought him my information, and he agreed to look into our chances.

 Three days later, he got back to me.  Home builders had convinced the legislature years ago to pass a law that said code violations could only be enforced within two years of the completion of construction.  Home owners only had two years from date of original purchase to sue the builders over faulty construction.

 In other words, home builders in the state of Virginia—and probably other states as well—could commit any violations that they could paint over and were immune to customer complaints.

 Repairs cost me $7,000 from my retirement fund.  I could have done it cheaper.  Some of my neighbors simply calked over the rotting holes and repainted.  But, I wanted the job done the way it should have been done in the first place.

So, when Jeffrey Immelt wants to know why Americans don’t trust or cheer big business, he needs to be reminded of how big business legalizes fraud, and makes themselves immune to redress.

 

 

Our Longage of Expectations

Recently, I was asked my opinion of a podcast conversation.  Since I find that kind of request to be flattering, I took some time to study the podcast transcript.  The two men having the conversation were Chris Martenson and Nat Hagen.  I didn’t know either one, but they seem to be accomplished so we travel in different circles.  Some of their points agreed with a few I had made in earlier posts, so I judged them to be intelligent and insightful.  But, really, it was the concepts new to me that were fascinating.

The whole thing is available at http://www.chrismartenson.com/page/transcript-nate-hagens-were-not-facing-shortage-energy-longage-expectations.  And, I recommend it.

 They discussed the economy in terms of oil production and consumption.  They pointed out that for as long as humankind has engaged in economic activity, the goal has been growth.  Bigger and bigger, more and more.  Standing still means falling behind.  Today, however, we are rapidly expanding into a wall.  Oil is a finite commodity and as tantalizing as the other sources of energy are, none of them are even remotely ready to replace oil. 

Hagen used the example of ethanol.  We currently produce about a million barrels per year which takes more corn than is used for food.  And, barrel-for-barrel, ethanol produces only 70% as much energy as oil.  Meanwhile, we consume 19 million barrels of oil a day.  So, if my math is correct, we could take a year’s worth of ethanol and replace oil for roughly an hour and twenty minutes.

He went on to explain that the government’s Energy Information Administration (EIA) has statistics on Energy Return On Investment (EROI).  Of course they do.  EROI is how much energy it takes to produce one unit of energy.  Seventy or eighty years ago when a wildcatter could find an oil field, stick a pipe in the ground and get a gusher, we would invest one barrel of energy to harvest a hundred barrels of oil.  That was a pretty good business plan and led to the primacy of the internal combustion engine.  By the 1970’s however, that one barrel of energy would only bring thirty barrels in return.  Still not a bad investment.  Then while the world worried about computer crashes in Y2K, the EROI came in around 10:1, and “the EIA stopped producing data on how much energy it takes to get energy.”  I wonder whose idea that was?  Who didn’t want us frightened by statistics?  Hagen doesn’t speculate on the who, but he reasonably estimates that our return on that barrel of energy spent is in the single digits today.

 We may be forgiven for believing that as oil becomes more expensive, drillers will go to greater and greater lengths to find it.  But, Hagen asserts that “you eventually get to a point, even if oil is $100,000 dollars a barrel, or $1 million dollars a barrel, if it takes one barrel of oil to get out [one] barrel of oil, you’re kind of out of gas at that point.”

What happens to our economy then?  What happens when we can’t grow our way out of our problems?

Martenson and Hagen go on to talk about how the issue shouldn’t be the shortage of oil or fresh water or anything else, it should be about the “longage of expectations.”  We, as a society, nation and planet, need to plan how we will get along when growth has been replaced with contraction.

Here is where they lost me because they went on about living on a smaller carbon footprint, and buying locally.  The elephant in the room, gentlemen, is that what needs to be downsized is us.  There are simply too damn many people.  If the available stuff doesn’t stretch far enough now, it sure won’t if the population keeps ballooning.  Back when society could get 100 barrels by spending one, there were only two and half billion people to use it.  This year we have or will top seven billion.  And, as development in China and India has proven, they all want cars.   Given the chance, like Jay Leno, they won’t stop at one.

Current projections are for population growth to slow--but not stop--toward the end of the century--as we approach nine billion hungry consumers.

We can prepare for the crash mentally—as Martenson and Hagen advise.  We can stockpile goods, which they say won’t do us much good since we can’t possibly cover all the bases.  Even money and gold will have little value when we run out of stuff to buy.  Does that sound bleak?  Remember that everything we use comes to us courtesy of oil—in trucks, planes, ships, and trains.  Run out of oil and we run out of everything else, too.

There is a school of thought that expounds belief in human ingenuity.  Pushed to the wall, we will invent a way over.  It’s a nice thought. 

 

Living Long Enough to Regret It

This morning, I flipped the channel to Bloomburg news just in time to hear the CEO of something drop the final sentence in an interview.  He pointed out that we are cutting benefits to the elderly, I don’t know whether he meant private companies or the government, but both are on the chopping block.  What that means is that everyone is going to have to save more money to prepare for getting older.  In an economy that is driven by consumer spending, that means recovery will be much slower.

From another source, I learned that the average American has $52, 000 in retirement savings.  Assuming that you are average, how long is that going to support you?  Better spend less and sock away more.

 And, how long will that savings have to last you?  The BBC reports that the a baby boy born in Britain today has a one-in-four chance of living to be 100.  A girl has a one-in-three chance.  Of course we Americans don’t have so much to worry about.  The average American male will live 1.5 years less than the average Briton.  Canadians, Australians, and Japanese outlive us by even more.  And, the gap is growing.

 If I may, I will quote from the article: http://www.bbc.co.uk/news/world-us-canada-14070090

 "We weren't surprised that we had lower life expectancies than other countries, but we were surprised by the fact that we were falling further behind," says Dr Ali Mokdad, professor of global health at the Institute for Health Metrics and Evaluation at the University of Washington.

…But the US is a big country, and while parts of Mississippi have a male life expectancy of 67, behind nations like the Philippines, women in areas of Florida live as long, on average, as the Japanese, who top the longevity rankings.

It is precisely this kind of inequality that goes some way to explain why the US - and the UK to a lesser degree - lag behind other countries, according to Danny Dorling, a professor of human geography at the University of Sheffield in the UK.

He believes a more even distribution of wealth, even if the average were lower, could mean longer lives for everyone.

Meanwhile: Elderly Americans have a higher chance of surviving heart disease and many cancers than their counterparts in other rich countries, she says. Where the US lags behind is what happens at a much younger age.

That brings us back to being able to pay for longivity.  Those who want to be able to afford to grow old will not be spending the money necessary to provide jobs for the rest.  Funded pension plans are going the way of the dinosaur.  Social Security was never intended to support people in their old age.  It is a supplement, and one that conservatives want to reduce.  Meanwhile, putting our money in stocks and mutual funds seems to be riskier every day—unless you happen to manage stocks and mutual funds. 

Isn’t freedom great?  Slogans beat soup any day.

 

Quote: Warren Buffett

These excerpts are from In the Loop with Betty Liu on Bloomberg Television.   Liu was in Sun Valley to interview Warren Buffett.

 Betty Liu: Is it misguided in many ways to look to the White House to try to help create jobs.  I mean,                 Obama’s got this jobs council—you know he keeps creating these councils to create jobs—is it                 misguided in that way?

 
 Warren Buffett:  People get their expectations too high.  I mean, if you                 look at these 15 recessions  we’ve had since we became a country.                  During half that period, at least nobody knew what monetary policy                 or fiscal policy was.  I mean,we cured ourselves and the system                 cures itself.   And, I would say that’s the biggest single factor.                  Government can do things to make it worse and they did in the                 Great Depression.  And, government can help some.

 Betty Liu:  Is the president making it worse?

Warren Buffett:  No, no, no.  We know the things to do that can help, but they                 are not, in my view, the prime determinant.  There are things to                 work through.  If you have too many houses, what can government                 do?

         …Government gets blamed too much and it may get too         much credit when things do improve.  Government’s a factor, but by far the biggest factor is correction of the business cycle over time is what would call the natural regenerative powers of capitalism.  Capitalism works.

[Later in the interview]

Warren Buffett:  It takes some cooperation from Congress, but [Obama] has ideas about what America can and should be                 that are in sync with mine.  Some of it is social justice and some of it is distribution of wealth, and that sort of thing.

Betty Liu:  Like what?  What are the lot of issues?”

 Warren Buffett:  Like I think, for example, that we’ve had a period in the last 15 years whee the 400  top tax payers in                 the United States—we have to go back 15 years—they had an average income  of about 45 million.  Now, they                 have an average income of 350 million, in the most recent figures, whereas their tax rates went down from                 27% down to 16%.  That’s not my idea of America.  I mean I want everybody to get rich, but I think that the                 rich have a responsibility to pay higher tax rates.

 Betty Liu:  So that when you hear him say targeting the millionaires and the billionaires, you’re saying  “Go get ‘em.”

 Warren Buffett:  Yeah.  

 Betty Liu:  Yeah?

 Warren Buffett:  Yeah, I am.

 Betty Liu:  But, don’t get me--

 Warren Buffett:  No, I look around at my friends here who are paying lower tax  rates than the                 people who are serving us the food—

 Betty Liu:  Do they agree with you?  When you’re here at Sun Valley talking to them, do they agree with  you?

 Warren Buffett:  I think some do, yeah.  And, many don’t.

 Betty Liu:  And are they still talking to you?

Warren Buffett:  Oh, yeah, they talk to me.  They figure I’m harmless and eighty.  This guy will only be  around a few                 more years.  

[So, if you are not a billionaire and plan to be around for more than just a few years, it is time to decide what kind of America you want to live in.  In the next 15 years do you want to see the income of the 400 top taxpayers rise by another 777% and their tax rates drop by another 40% while your numbers remains the same or worse?  The rich have already made their choice.  What are you going to do?]   

 

The Self-Deception of the Right

Recently, I’ve had a little down time and realized how the conservative movement has deceived itself—or let itself be deceived by those who would use it.  You may be ahead of me on this, but the thinking seems to be that the economy is down—especially where jobs are concerned.  Taxes are a pain in the rear.  The national debt is worrisome.  The government gives money to people who don’t deserve it.  And, society seems to have lost all sense of order.  What to do?

 Well, let’s cut taxes until the problems go away.  And, deport or lock up all those with disturbing behavior.  Slash the regulations on business so it comes back to America.  That’ll fix it.

 And, while we’re at it, let’s bring home all the troops from everywhere.  Those foreigners don’t know how to fix their problems, so let them kill each other until they figure it out.

 This is the same thinking that drives the Taliban.  Reject innovation and cling to an earlier age when privilege was reserved for a few at the top.  Life is less confusing if everyone knows his/her place.

 There is a natural hunger for easy answers to intractable questions.  There aren’t any.  I toilet-trained three children.  Each one required a different approach.  With that in mind, look at any social problem with its many facets and the numbers involved and you have to know that multiple strategies are necessary for everything.  Along the way, there is going to be waste and frustration, and that is just how it is.  Try and try again.

 As for taxes, back in the 1950’s, taxes on the wealthy were 70% or more.  Corporate taxes were also higher.  And, we had an economic boom.  Job creation all over the place.  Go back to the Great Depression.  The wealthy didn’t end that, government spending did.  It took a world war to get a consensus, but it was the massive wartime spending that beat the depression.  The debt that was created resolved itself in the post-war economic boom. 

 Now, it is also true that the great social programs and environmental regulations came along later, but, that is not what soured the boom. Strong regulations create jobs.  Increased opportunities expand the economy.  We also had strong tariffs.  Duties paid on imported goods kept domestic manufacturers competitive.  When the duties came down, there was an incentive for manufacturers to send their factories overseas.

 If the wealthy have a low tax rate, who are they going to hire?  Another gardener?  The wealthy don’t create jobs.  One could argue that low corporate taxes would create jobs—except that they don’t.  Look what happened with the stimulus.  Companies bought each other, handed out bonuses, and built factories overseas.  Individuals and corporate boards are always going to spend or save money in ways that are selfish.  As a stockholder, that is what you would want.  Corporations and those who run them will never conspire to act in the public interest.

 Tell a CEO that you are going to reduce his taxes by $10 million next year and ask him how many jobs he will create with that.  You will never get a straight answer, unless he says, “I don’t know.”  Taxes don’t determine if private companies will hire, the marketplace does.  Unless he sees a sustainable increased desire for his product, the CEO is not going to invest in hiring.

 I could go on.  The right has it exactly backwards.  This is no accident.  Some are dazzled and deceived by their rich supporters.  Others are firmly in the deep pockets of the privileged.  I’ve said it before. This is a war on the middle class.

 

The Weight of Greece

Back in my traveling days, I visited or stepped in 42 foreign countries.  When someone asks which one I liked the best, I always say Cyprus.  I only saw the Greek side, but the people there were the warmest, most hospitable folks I have ever met.  I could also go on about the food, historical sites, excellent roads, etc. but then I would wander off my thought-path.  If someone asks what is the country I liked least, I don’t hesitate there either.  It’s Nigeria—for reasons I won’t go into.  The second least-liked country on my list is Greece.  Like Cyprus, the food and sights are also stellar—and individually, the people I met were very nice.  However, the shopkeepers, taxi drivers and other service people that a visitor depends on spoiled the experience.  They would prefer that tourists stay home and mail them the money.

When I read about the problems that Greece is giving the European Union, I have to say that the Greeks will not put their financial house in order—not within the lifetime of any Greek currently drawing breath.  They should be cut loose and left to sink, or they will drag the rest of Europe down with them.

 I was sent there on a training mission to help with a problem they had.  Forgive me if I am vague and cryptic, but this was a mission sponsored by our State Department, and deserves some discretion.  The senior officials that I met all agreed that problem was serious.  They would puff out their chests and boast that all of Europe was looking at them.  Each time, I would wait for the next sentence in which I expected to hear them say that they were taking action, but there never was a follow up.  Europe was looking at them, and that was enough.

 About the problem?  Well, the consensus seemed to be that it was the fault of foreigners.  Greeks would never do that.  Law enforcement officials who took their jobs seriously would be transferred to the farthest reaches of the country.

 I met a Greek millionaire.  He and his American wife took me to dinner and for a ride in his speed boat.  Good people.  He lamented about how easy it was for him to cheat the system.  He explained that if he were stopped for speeding or any other violation, he only had to tell the officer who he was, and he would be released without a ticket.  Corruption extended beyond the necessity to pay a bribe, just mention your name or who you knew, and that was enough.

 I don’t recall the numbers, but a high proportion of the work force were (and probably still are) employed by the government.  Their benfits were extraordinary.  Governments were elected on the promise of more giveaways.  Even when I was there, pre-EU, experts said that the economy was unsustainable.

 Until the bottom falls out completely, the people will not allow the government to make the adjustments that are necessary to balance the budget.  Maybe when the money runs out, they will wake up.  Of course, even then, they will blame it all on foreigners.

 

FLASHBACK – The Assasination of Charles the Good

Back in the time when royalty meant something, when Europe was littered with kings and counts, at the dawning of the 12^th Century, King Canute IV of Denmark was murdered.  The king had married Adela of Flanders.  The new widow took her son Charles and returned to Flanders.

 Why does this matter?  Well, history was about to be changed, and like every time history made a turning point, it contributed to who we are and the situation in which we find ourselves today.

Young Charles grew up and through the twists and turns of life found himself Count of Flanders at the age of 32, only a year after his own marriage.  He managed to uphold existing treaties and maintain the peace.  He reformed the laws to make them more fair and walked barefoot to mass each day to demonstrate his humility.  When the economy took a dive and there was widespread famine, Charles I distributed bread to the poor.  He also discovered that some wealthy landowners were hoarding grain in order to sell it later at exhorbitant prices. The most notable of these speculators was the Erembald family.  Charles the Good, as he came to be known, turned his official wrath on them and broke the wealthy family down to the status of serfs.

The rich do not go down easy, however, and a priest in the family concocted a conspriacy to murder the good count.  On the morning of March 2, 1127, a group of knights beholden to the Erembalds caught Charles at prayer in Fr. Erembald’s church and hacked him to pieces with their broadswords.  (In those days, they had to make do with swords because they did not have the internet and Fox News, but they may have charged the count with being born outside the country to a foreign father.)

 The citizenry was outraged, and the Erembald family was tortured and exterminated.  King Louis VI of France had supported the revolt and then appointed his own man as the next Count of Flanders.

 The Church later beatified the slain count and made him St. Charles.

 What can we learn from this medieval tragedy? That the greedy and powerful will employ terrible weapons to stop charity and justice.  Also, that hoarders and speculators are never remembered as “--the Good.”

 

Dispatches from the Class War

Once again, Democrats are being defensive when confronted with a specious charge instead of attacking liars for lying.  In Wisconsin, for instance, how much money would be saved by the Governor’s cutting of public sector pay and pensions?  He says that it is essential, but it would only be about 10% of what he needs to close the deficit.  So, maybe he will need that 10%, but somebody should be challenging him on where he plans to get the other 90%.

I refer you to this link: http://www.npr.org/2011/02/23/133990022/the-nation-in-wisconsin-it-isnt-about-the-money

 John Nichols of The Nation, points out that the previous Democratic administration faced an even larger deficit ($5.94 billion vs the current $3.6 billion) and dealt with it successfully.  In fact, Wisconsin was looking at a $121.4 million surplus when Governor Walker came to office.  He then threw it away in $141 million corporate tax cuts for multinational companies that are going to take their profits out of the state.  Were these tax breaks in exchange for guarantees of new job creation in Wisconsin?  Of course not.

Now let’s go to http://marketplace.publicradio.org/display/web/2011/02/23/pm-how-to-fix-social-security/?refid=0

 Robert Reich explains that Social Security would not be in any trouble today if we had maintained the ratios set in 1983.  For those of us who have forgotten the Social Security overhaul in that year, Reich recalls that earlier age when it looked like Social Security was on the verge of bankruptcy.

 You are aware, of course, that Social Security has a payment cap.  This year the cap is $106,800.  If you make less than that, you pay a flat rate of 10.4% of income (I.e. 4.2% from employee, 6.2% from employer—10.4% from self-employed).  Once your income goes over $106,800, you pay 10.4 for the first $106,800, and nothing after that.  In other words, the prosperous pay proportionately less and less  the higher their income goes.

Back in ’83, after much political wrangling, Congress found a formula that put 90% of all incomes under the cap.  Problem solved, Social Security would go on forever.

 What Congress did not anticipate was that the gap between rich and middle incomes would grow so wide that now the cap only covers 84% of earners.  And, as more money goes to the top with the combination of tax give-aways and salary reductions the gap is only going to grow. 

 Reich suggests that Social Security could be fixed if the cap were raised to $180,000 which would once again cover 90% of earners.  He doesn’t hold out any hope for that to happen. There is no political will.

 I say to remove the cap altogether.  For people making over $180,000, paying the same 10.4% as everyone else is no hardship.  Politicians who depend on the generosity of wealthy contributors would run from that suggestion as if it were radioactive.

 As I said at the top, these are dispatches from the front in a war that affects all of us.  Once the unions are too weak to oppose changes to labor and safety laws, they will be whittled away.  The enemy is relentless and organized.  We had better be the same.

 

Selling our humanity

The current administration running the state of Virginia is trying to save money.  This is not only not a bad thing, it is a neccesity in these cash-strapped times. 

The governor wanted to sell off the monopoly that the state has in retail liquor sales.  Only state owned stores are allowed to sell booze.  This raises a lot of revenue.  It also raises the envy of private companies that are being shut out.  Selling the stores would raise some short term revenue, but would cost the state much more over ensuing years.  The governor has backed off that one for now.

 The Richmond gang is also reducing the size of the training centers for the intellectually disabled (ID).  One of the governor’s men said that the goal was to reduce the size until they were no longer economically viable, and then shut them altogether. Again, the state sees savings and private interests see profits.  The lobbyists for the elimination of state facilities say that government institutions are inherently bad and small, intimate group homes are always better.  But, it ain’t necessarily so.

There was a time when mental illness, and even epilepsy, were not acceptible in American society.  ID children, the ones with autism, Down’s syndrome, etc. were sent away and shut up in warehouses where they were not treated as well as livestock on farms.  Of course, that was before factory farms—but I digress.  There were a series of scandals.  Under intense pressure and scrutiny, state institutions improved greatly over the past few decades.  Some states got out of the business altogether.

As networks of privately run group houses grew, the natural antipathy toward state-run institutions became a well-financed movement.  And, in the Old Dominion state, it is in high gear.  Reporters are introduced to high-functioning individuals who talk about their jobs, and how they can go to the store by themselves, etc.  It sounds good.  Only an evil bureaucracy would want such endearing people shut away.

 They don’t show the less gifted ID individuals.  Many people with mental problems were also born with severe physical handicaps.  Some cannot speak, but only make vocal noises.  Many cannot walk or even sit up straight.  They have to be moved frequently to prevent bed sores.  I knew a young man whose face was perpetually stretched as if in surprise.  He could not close his mouth and had to have it sprayed with water to prevent it from drying out.  Folks at this end of the spectrum need attentive care around the clock.

 There are some “normal” people who wonder why we should spend anything on such unproductive, vegetative beings.  They haven’t met them.  These are people with a sense of self and an awareness of their surroundings.  And, unlike some Wall Street bankers, ID individuals do no harm.  Quite the contrary, they teach the rest of us lessons in humanity.

 State institutions have layer upon layer of oversight: local, federal, state and community. All records not restricted by privacy laws are open to inspection.  Because of the numbers in these facilities, they attract scrutiny.  Blemishes are blown up into scandals--and rightly so.  All it takes for evil to re-emerge is for people to look the other way.

 Community houses don’t have medical and psychiatric support in house.  They don’t have campuses where individuals can roam in safety.  If they lock an individual in his room, no-one knows.  If staff mistreats or steals they do so in relative secrecy.  Is this sort of misbehavior rampant?  Probably not. But, how would we know if it were?

 As for the savings, community houses have always taken those who were most capable and required the least maintenance, while state facilities took those who needed the most looking after.  It’s like the taxi companies saying that they are more economical than the bus companies because their vehicles get better mileage.

 Since those with disabilities cover a vast range of needs, I want to see choices.  Every one of them should be able to maximize the possiblities of life.  I would also like to see comparison studies.  Start with a simple mortality study.  Where do people with similar conditions live longer?  In state facilities or in private ones? Once the publicly run centers are gone, they won't be coming back.  Shouldn't there be some hard data to prove that change?

It would be nice to see at least one policy decided on science instead of by lobbyist donations.

 

Plantation Politics

When the economy in the southern United States was plantation-based, slavery was widespread and defended.  Slavery was only incidentally racist.  Color was a handy way to distinguish one group from the other.  The primary reason for slavery was that the agricultural based economy of those times needed a lot of cheap labor, and recruiting volunteers was too slow to be practical, especially with a continent of unexplored land to run away to. 

When mostly-northern abolitionists began attacking the southern economic model, it led to a civil war that still holds the record for this country’s bloodiest conflict.  What is interesting is that very few of the Confederate soldiers were slave owners.  They fought, suffered maiming and loss of limbs, and died by the thousands to protect a system which did not benefit them. Why was that?

 It had to do with the percieved fluidity of the American class system.  Every poor working southerner could see a day when he might have enough land to require field hands and a house big enough to benefit from house servants.  The fact that only the barest handful of them ever stood a chance of achieving wealth did not affect the potential of the dream.  Isn't there an element of that today when working people defend the "freedom" of the rich to exploit them?

 Employing that delusion,  thousands of paycheck-to-paycheck workers defend the ability of $200 million a year CEO’s to profit at their expense.   Look at what they’re selling us: if you want more money, don’t look for a pay increase—even though executive boards gives themselves raise after raise.  Instead, what you need is to pay lower taxes.  That is the only way to enhance your income.

 The game began when company leaders transitioned from those who were product-orient to those who are money-oriented.  The roots of growth and progress moved from innovation and product enhancement to reducing costs and producing profits by decreasing payroll and benefit expense.  A new product was a gamble, especially when it was the brainchild of an underling, whereas the figures on a balance sheet were clearly understood. 

 There are hundreds of examples of corporate leaders holding fast to the policies of the past—even the failed policies--rather than risk change.   Look at the saga of New United Motor  Manufaturing, Incorporated (NUMMI).  If that doesn’t sound familiar, think General Motors  in Fremont, California.  GM’s Fremont plant was the worst in the nation at one time, plagued with every sort of manufacturing nightmare known to management.  In came Toyota.  GM wanted small car capability, Toyota wanted a foothold in California, hence NUMMI.  The Japanese took Fremont employees on tour to Japan to learn the Toyota way.  In GM plants, for example, the production line was never stopped.  Vehicles would continue mindlessly to the end of the line where quality control workers were supposed to find and repair defects.  In contrast, Toyota plants had kill switches everywhere and anyone could stop the line to fix defects where they occurred.  The workers came back enthused with a new vision.  Unions were seen as partners with management instead of adversaries.  Practically overnight they turned the NUMMI plant into the most efficient in the GM system and even exceeded some in the Toyota system.  What was the reaction of upper GM management?  They took another decade and a half to introduce NUMMI innovations to the rest of the corporation, and even then half-heartedly.  Sales were declining, and eventually,  GM declared bankruptcy.  [http://www.npr.org/templates/story/story.php?storyId=125229157]

Now, it is easy to blame our economic woes on short-sighted CEO’s, and, to be sure, they deserve the lion’s share.  However, bankers or builders, business leaders are caught up in a mad race to keep profits and stock prices high.  It is hard to tell them to act in concert or to act individually to benefit the nation and posterity.  It is also difficult to tell politicians not to pass a lot of corporate welfare legislation when corporate donors are where they get the money to run for office.

We have to stop being foot soldiers for the plantation owners.  The old systems are faltering.  Other countries are leading the way in energy alternatives, consumer electronics and many other industries.  We have to take the money out of politics.  We have to stop rewarding self-destructive behavior like moving jobs overseas and expanding the gap between the rich and the middleclass.  You might recall that when that slavery thing finally came to a head, it didn’t end well.