It’s always about the bottom line

Despite record government handouts, ostensibly to keep jobs from leaving the state, Chicago-based Boeing company cares more about profit than labor wellbeing. Its recent decision to jettison staggered work shifts is one more case in point. In a brief memo, the company said:

“This change supports the factory vision of standard work, continuous flow and scheduled job times; and is anticipated to support our competitive advantage in the market.”

There is nothing unusual about Boeing’s behavior. It will seize every opportunity to reduce costs and increase revenues. Avoiding taxes in the form of government subsidies is certainly one way to achieve the former. Exploiting federal programs like the Export-Import Bank helps boost revenues by transferring a portion of the sticker price to taxpayers from foreign businesses and countries seeking to purchase airplanes.

Swift and certain

Why do people misbehave and so often? Research suggests that lack of swift and certain apprehension and punishment encourages criminal behavior. If we know that authorities are absent or, if present, will do next to nothing should we transgress, we do bad things—over and over.

The linked article above focuses initially on traffic situations. Those of us who drive cars know something about such things. I, for one, avoid the freeways as much as possible, save for Fridays, when my wife and I must join the muck to head from Everett to Seattle, where our grandkids reside. It’s a treat well worth the effort, mind you. And, with some exceptions, the trip is decent enough, mostly because we can drive in the HOV lane, bypassing the vehicular goo to our right.

Yet, I am nevertheless bothered by the prevalence of bad drivers. My biggest irritant are those who immediately drive into the leftmost lane, then stay there as if they are masters of the domain. Meanwhile, other motorists join the queue behind them, all growing more anxious with each mile of impedance.

In Washington state it is against the law to drive in the leftmost freeway lane unless to pass another vehicle. Yeah, right. There are sparsely located signs indicating as much. No matter. Motorists flout the law, exercising what, for them, is their god-given right to seize a 12-foot-wide corridor for their exclusive use. Other motorists be damned.

Well, those increasingly anxious trailers must feel bottled up, which they are. That’s when things can go ugly.

Freeway travelers cannot help but notice skid marks on the freeways, indicators of vehicle collisions, some ending in horrible death. Many collisions result from over-anxious drivers seeking an escape from the congealed line of backed-up cars in the left lane. The would-be escapees sometimes miscalculate. They believe that they’ve discovered an opening, only to misjudge space and time.

In my previous life I made a living as a traffic accident reconstructionist. I would be called to a scene after the fact to survey the remnants of a collision, involving one or more vehicles. I would measure the skid marks, damaged vehicles, the scene itself, and whatever appeared related to the incident under investigation. Having gathered the evidence, I would then apply Newton’s laws and other appropriate physics and math to determine who did what.

One of the most spectacular effects of a collision occurs in relatively minor freeway accidents. Let’s explore one example.

Say that you are one of those motorists stuck behind a stubborn or otherwise oblivious domain-master. After several minutes, your patience ends. You’ve got to escape. You spot an opening to your right in the center lane. So you accelerate while moving in that direction. But you misjudge distances. In your maneuver the left front of your car clips the right rear of the car ahead of you that you’re trying to pass.

This seemingly little nudge produces extraordinary effects. The domain-master’s car is suddenly rotated counter-clockwise, putting the vehicle into a yaw and propelling it sharply left and out of the leftmost lane.

If we assume that the vehicles are traveling over 60 mph, which is most often the case in that left lane, the mishap can have dire consequences. The domain-master’s car may collide with a car to its left (e.g., in the HOV lane) or into an embankment or protective barrier. The sudden deceleration upon hitting another object at high speeds is what kills and maims.

If domain-masters knew that their obstructionist behavior would be quickly and consistently recognized and stopped by the Washington State Patrol, then, according to the linked article, there would be fewer such motorists and, therefore, fewer accidents involving impatient drivers. From the article:

In other words, people respond to how likely they are to get in trouble. So on roads where cops are more likely to pull over people for bad driving, maybe drivers are more likely to adhere to speed limits and avoid anything that might look like reckless driving.

I would change the enforcement emphasis, however. I’d sanction less the speeder and more the obstructionist.

Learning from the Swedes

Americans, as a rule, believe against all evidence to the contrary that they live in the greatest country on the planet. I doubt, however, that Americans can articulate why, other than to parrot tired platitudes that are much more myth than reality. Worse, in our patriotic cocoon, we cultivate a pervasive ignorance of alternative viewpoints and practices, believing that we have nothing to learn from others.

It is refreshing, then, to encounter different perspectives from those with direct experience by which to compare the American way from a more rational, sensible approach to living life. For example, we have this essay posted in Vox by a retired professor who divides his time between Sweden and Wisconsin. Tom Heberlein punctures a few misconceptions about Sweden, especially tax policies, while also pointing out obvious deficits in America’s approaches.

Take health care, for example. Heberlein writes:

The 33 million Americans who are still not covered by health insurance don’t have much choice when they get sick, unless you think, “Your money or your life?” is a choice. Paradoxically it turns out the bloated, heavily lobbied, privatized US system spends more tax money ($4,437) per person than Sweden’s socialized health care ($3,184).

This is due to Swedish efficiency rather than poor service. I do get to choose my doctor, have high-quality care a short walk from my home, same-day appointments and short waits when I walk in unannounced. And one day my physician himself phoned to tell me I had left my gloves in his office — it was my choice to walk back and get them.

The rest of the essay is worth the read. Fair warning, you may become further depressed by the yawning chasm between a society that works and a country, our own, that conjures new opportunities to transform basic necessities into profitable extractive enterprises. Somebody has to get rich. Why not you?

From A to B

Puget Sound, like many U.S. metropolises, suffers from traffic congestion. There are just too many people driving too many cars on too few roads. When we set out for work each morning, we inevitably join the congealed goo that clogs our freeways. Getting to and from Seattle involves one of the worst commutes in the country.

A big reason for this is the lack of alternative transportation. We are too sparsely distributed to rely on bicycles, and even if we are intrepid enough to bike, we must share the roads with giant SUVs and trucks—an iffy proposition. Buses must also compete with thousands of other vehicles, which does not make commute times any less. But the absence of trains is the largest factor in our region’s transportation mess.

The King County Executive, Dow Constantine, announced that residents of the area should not expect relief to come via more roads and freeway lanes.

With the three-county region’s population expected to grow by 1 million over the next 25 years, Constantine said transit is the only solution that can move a lot of people — 16,000 an hour, or the equivalent of 14 new lanes on Interstate 5.

The proposal going to the region’s voters this fall, dubbed ST3 (Sound Transit 3), will ask residents to pay a combined $50 billion extra to serve the citizens of Everett and elsewhere. The Sound Transit agency estimates that the average Puget Sound household would pay about $392/year, or a bit over a dollar a day.

But Republicans, as a rule, loathe anything public and especially anything to do with public rails. They believe, in their idiocy, that rails and buses undermine the freedom to roam and, though they do not admit it, wreak havoc on the environment in their libertarian pursuits. So Republicans, as a rule, oppose any collective efforts to solve aggregate problems, and transportation is the mother of all aggregate problems.

Meanwhile, the United States continues to fall behind other countries in just about all categories of social and economic wellbeing, save for our One Percent, who reign supreme throughout the world. Consider this chart on high-speed rail, based on data collected by GoEuro, a website devoted to transportation.

high speed rail

Notice where the U.S. ranks. That’s right, next to last in population coverage and dead last in costs per kilometer traveled. The GoEuro website includes a table showing high-speed rail either planned or already under construction. Again, look at The Americas.

Screen Shot 2016-03-29 at 12.35.28 PM

The entire Western Hemisphere has just three percent of the world’s total of rail lines under construction (most of that the California project) and under 10 percent of the total planned. Current usage of existing high-speed rail is roughly two percent of all the global high-speed rail now operating.

Against Europe and Asia we suck. For you Trumpites out there, know that American cannot be made great again by cutting taxes on the wealthy or building a big wall, however beautiful. More helpful would be to get Americans moving again, quickly and efficiently, along with their goods and services. Asians and Europeans understand this.

Ben Adler, writing for Grist, offers his thoughts:

GoEuro notes dryly that the “USA and Russia, both once in competition during the Space Race,” are now struggling just to move their citizens around swiftly on land. Well, Russia is actually in 15th place, so unlike the space race, we’re losing this one. Well-known rail leaders Japan, South Korea, China, and France are the top four nations, in that order. Spain, which is persistently economically troubled, ranks fifth. None of these countries has as high a GDP per capita as the U.S., so our problem isn’t lack of resources, it’s lack of political will.

Ah, politics. The necessary evil.

Rock heads

Despite dramatic reductions in the nation’s unemployment rate, which is now at five percent, economic growth sputters.

real gdp annual change 7:28:2015

Meanwhile, the financial sector racks up ever-increasing profits and sits on mountains of cash, deposited here or abroad, but mostly the latter. It does the Rest of Us little good to have so much idle money. Better that it be invested in the “real economy,” as Joseph Stiglitz puts it in an op-ed for The Guardian. That capital is being hoarded rather than spent testifies to perverse incentives, whether or not intended. He writes:

But the dominant policies during the post-crisis period – fiscal retrenchment and quantitative easing (QE) by major central banks – have offered little support to stimulate household consumption, investment, and growth. On the contrary, they have tended to make matters worse.

We find ourselves stymied by rock heads, compliments of conservative’s stubborn insistence on presumed fiscal rectitude. Government debt is inherently and forever bad. Indeed, as we all know from Saint Ronald, government itself is wretched, so it must be starved at all cost.

And that cost is at the expense of the Rest of Us. Stiglitz implies that only the government now can unleash the economy, since the private sector refuses to return their accumulated capital. Stiglitz:

Perverse incentives are only one reason that many of the hoped-for benefits of low interest rates did not materialise. Given that QE managed to sustain near-zero interest rates for almost seven years, it should have encouraged governments in developed countries to borrow and invest in infrastructure, education, and social sectors. Increasing social transfers during the post-crisis period would have boosted aggregate demand and smoothed out consumption patterns.

Ah, but the damn Republicans. They continue to stand in the way of such investments. Let’s look at U.S. government spending.

real government spending:gdp to 2014png

There were, and still are, plenty of opportunities to stimulate the economy, despite private hoarding. Money is very cheap these days, and there is much to do that would enhance economic output and put people back to work at better-paying jobs.

While the federal debt as a percentage of GDP has fallen over the last few years, Stiglitz suggests that public investment can be funded by taxing bad things, especially carbon, rather than adding more debt. But the rock heads actually proclaim that carbon is good for you, as they deny global warming and its obvious effects.

Depressing stuff.

Oh, and speaking of debt. Look at the chart below.

federal debt to gdp to 2015.png

Notice that the ratio was steadily falling until…wait for it…Saint Ronald. He championed lower taxes, dramatically cutting marginal rates, thus reducing federal receipts. Then the number fell during Clinton, before rising with Bush II. It jumped sharply during the Great Recession, which, I would argue, was a direct consequence of the house-buying-and-selling frenzy facilitated by G.W. Bush and his boost of home ownership. The lenders were only too happy to oblige, knowing that they could get away with murder under the conservative regime.

As I’ve said before, Republicans pose an existential threat to all of us. I shudder at what will surely happen should they control everything.

Some thoughts on Flint and DOT

The New York Times editors fingered Republicans for the crimes against the people of Flint, Michigan.

The state government, whose officials caused this crisis, has been loath to commit substantial funds to long-term needs, and Congress, under the control of Republicans, is finding excuses not to rescue this poverty-stricken, majority-black city of nearly 100,000 people.

Closer to home, Republicans in Olympia essentially “fired” Washington state’s Department of Transportation head, Lynn Peterson, by refusing to confirm her three years after she was appointed by Governor Jay Inslee. I was struck by the comments of Curtis King, R-Yakima and chair of the Senate Transportation Committee:

He also said Peterson is making it too cheap for Sound Transit to acquire right of way along state roads.

“She’s very partial to transit, very partial to bike and pedestrian paths, all those things,” King said. “We need to protect the citizens that want to travel on our roads. That’s why we’re there. We need to protect the ability of people to use our roads, use their cars. From the get-go, she was about moving people on transit, moving people on light rail.”

We may recall conservative pundit George F. Will’s denunciation of trains. He was writing for Newsweek at the time (Feb. 2011):

Forever seeking Archimedean levers for prying the world in directions they prefer, progressives say they embrace high-speed rail for many reasons—to improve the climate, increase competitiveness, enhance national security, reduce congestion, and rationalize land use. The length of the list of reasons, and the flimsiness of each, points to this conclusion: the real reason for progressives’ passion for trains is their goal of diminishing Americans’ individualism in order to make them more amenable to collectivism.

To progressives, the best thing about railroads is that people riding them are not in automobiles, which are subversive of the deference on which progressivism depends. Automobiles go hither and yon, wherever and whenever the driver desires, without timetables. Automobiles encourage people to think they—unsupervised, untutored, and unscripted—are masters of their fates. The automobile encourages people in delusions of adequacy, which make them resistant to government by experts who know what choices people should make.

Mr. Will’s attitudes are on full display along Puget Sound’s interstates, where all those “unsupervised, untutored, and unscripted” motorists embrace their individualism en masse, victims of their own shortsightedness. The vehicular goo is constant and thick.

Conservative Republicans, there is really no other kind, pose an existential threat to the planet. Mr. Will, we also know, denies climate change. It’s also clear that in their zeal to shrink governments, Republicans condemn millions of Americans to extreme environmental risk, from Flint to Florida, where global warming has already been exacting its toll for decades. Trains can help mitigate by increasing transportation efficiency and reducing carbon emissions.

Charles Koch has dedicated his political life to destroying “collectivism,” which he deems pernicious. Of late he has tempered his language and softened his image. But as Jane Mayer records in her book Dark Money, Mr. Koch is unavoidably off-the rails when it comes to his born-in-the-womb libertarian views. Now he has married money with mayhem, spreading his vast tentacular network into and around even the smallest government branches. In this he has been spectacularly successful, as evidenced by the “incredible” transformation of America’s states from blue to red. His fingerprints will no doubt be discovered in Washington state, the once-proclaimed “soviet” of the United States.

Insofar as Republicans will literally be the death of us, they should at least be quarantined. Kansas seems to be a suitable location for such purpose.

Government spending

All Republicans, as an article of faith, champion smaller government and lower government spending. They do so, despite ample evidence that neglected public infrastructures, including education and transportation, stifle economic growth. And, we have heard loud and clear from the myriad GOP presidential candidates that boosting the economy is vitally important and that each of them has a plan to raise GDP, with Jeb Bush claiming that his programs would achieve four-percent annual growth rates, a level not seen since the Clinton era.

real gdp to August 2014

Nor should we forget that the Republicans’ answer to all problems is to lower taxes. The money denied government would, as if by magic, spur a rising tide of economic growth, lifting all boats, including the millions currently under water.

What is most ironic in the Republicans’ obsession with smaller government is that government spending as a percentage of GDP is at the lowest level since the end of WWII.

real government spending:gdp to 2014png

I looked at data from the St. Louis FED. Here are the average spending levels per decade. So, for example, government spending in the 1950s averaged 34 percent of GDP.

real government spending:gdp by decade

I then charted spending levels at each of the above percentages.

government spending:gdp by decade averages

Now let’s look at the differences in spending between the hypothetical and actual levels by decade. That is, how much more (or less) money would the government had spent all told had it maintained the averages for each of the decades?

government spending differences

You will hear from Republicans and too many Democrats that the United States cannot possibly afford to end poverty, properly educate its citizens, use energy more efficiently, or transport people in safety and comfort. Well, had federal spending kept at levels of the 1950s, we would have collectively spent nearly $53 trillion more than we did! At the level of the 1960s, the U.S. would have spent over $45 trillion more than actual—and so on. However, applying the spending levels of the last three decades to the pre-1990 era, the U.S. would have spent considerably less over all than it actually did, as much as $22.5 trillion at the 2010 through 2015 average.

These counterfactuals did not occur because tax rates were lowered since the end of WWII. With lower tax rates come reduced revenues. So, if the money did not go to government, who got it? If you answered, “The Rest of Us,” you would be wrong.