Chick-Fil-A and the Demise of Civilization

Yesterday I had a great day in the yard — the weather here has turned glorious after a brutally hot summer with forest fires everywhere — and ended the day by calling friends and family.

None of whom picked up.

I started with my old friend (we go back to high school) Sheila. Her significant other’s voice answered in a profoundly annoying faux-French accent:

“Sheilah eez not here. She eez currently lost in zee Amazon Basin. Eef you weesh to leave a messahge, she weel return your call as soon as she eez found and rescued.”

So I left her a messahge:

“Theese eez zee Coalition of Amazonian Fire Ants. Eef you weesh to see Sheilah alive again, you must return theese phone call. Ask for Guillarme. Call alone. Otherwise she weel be returned to you in eety-beety pieces. Mixed with eety-beety beets of leaves and bark.”

By the time I got to my son in Chicago, my messages had become something like this:

“I am so DISAPPOINTED in you! Really! Here it is, a beautiful summer Saturday night, and you are NOT waiting by the phone for my call. I’m hurt and I’m angry. Call me.”

ANYWAY, I had much better luck this morning, and got to talk with everyone except Sheila, who is presumably still lost in the Amazon. She’d better get back soon, or I’ll have to cross her off my Christmas list.

During my conversation with my ex-wife, the conversation turned somewhat political. I made a comment about the “perfect storm” the United States is facing — peak oil, environmental catastrophe, and a pending collapse of the economic system — with a verbal shrug and the admission I had no idea which one would bring down the country. After all, any one of the three would be enough, but all three at the same time?

“But it’s gays and lesbians who are destroying the country,” she said.

Now you have to understand that my ex-wife and I remained very good friends after the divorce, since the thing that broke us up was an irreconcilable similarity. We both like women. In pretty much the same way. Though I’m more of a leg-man, I think. I guess I should say leg-person.

I thought about her comment for a while, and then I said, “You know, the problem with gays is that nobody knows what they’re good for.”

“How’s that?” she asked.

“Well, look at the illegal aliens. The Republicans went after them with a whip, so they did the smart thing and left the country. Then the farmers all started screaming, because all their cheap skilled migrant labor went away, and the prison work-gangs couldn’t handle the heat, and they couldn’t get any white unemployed Tea Party Republicans on food stamps to sign up for the jobs. So the Republicans had to quit being dicks about illegal aliens and just shut the f**k up. The only place still beating the illegal alien drum is Arizona, and that’s because they can’t grow anything there but purple sagebrush.”

“I see your point,” she said. “It’s like when Disney went after gays, and all their best writers and artists quit. Then Disney had to back down.”

“Yeah,” I said. “Just like that.”

“You know,” she said, “up here [Minneapolis] we have a ballot item this November to make gay marriage illegal forever in Minnesota. It’s really weird who has come out for and against the vote. Big companies are very much against it, because it’s going to trash their skilled workforce. And every sign on lawns, even up in the [Michelle] Bachmann suburbs, is against passing the law.”

“Well, yeah, who wants a sign on their lawn that says, ‘Hi, I’m a bigot!'”

“Yeah, but they’ll vote for it anyway and then slink away.” She sounded a little depressed.

“Hey, it’ll all work out,” I said. “Those folks are all pigging out on Chick-Fil-A and congratulating themselves on their holiness. Maybe they’ll eat too much fast food and all die of heart attacks.”

And right then is when I realized that this is exactly how the Rapture will come about.

None of this nonsense of being ripped through the soft-top of your Mustang convertible to meet with the rest of the Blessed (I always wondered somewhat grimly what would happen if the Rapture occurred while you were driving an Abrams tank — sounds a little uncomfortable, as a nurse might say.)

Nope, just a quick and easy heart attack, and next thing you know, you’re singing with the choir and getting your harp all tuned up for Jesus’ Return Engagement Tour party.

Which made me realize that there is a Greater Purpose to the whole Chick-Fil-A thing. It is one of the Signs. Yea, verily, it must reach every corner of the world with its message: eat more chikn. And love thy neighbors, unless they’re the same sex as you, in which case don’t get too chummy or you’ll go to Hell.

I think I know why Sheila is hiding in the Amazon Basin. The Chick-Fil-A franchise hasn’t made it there, yet.

Maybe I’ll join her.

On the Issue of Stupidity

I’ve probably said out loud (at least once) that conservatives as a class are stupid. As in not the brightest bulb in the pack, three bricks shy of a load, easily led by the nose, three dollar bill stupid.

Oddly, their stupidity does not inspire my pity. Their stupidity makes me angry. Positively wrathful, in fact.

Now there’s a truism that when you find yourself angry with other people, particularly a whole class of people, you’re reacting to something in yourself that is similar to them — a similarity you dislike about yourself, or that has caused you great pain in the past.

It’s a truism, not a truth: that is, a useful idea that’s mostly true often enough to warrant giving it a good chew before you spit it out.

So what is this wrath that I feel?

It feels like the kind of anger that follows betrayal. It’s the same anger you might feel when you learn that your own daughter has been stealing from you, or when you find your spouse in bed with your best friend, or when you discover that your retirement fund has been embezzled by its trustees, who are now living a life of ease in the Cayman Islands while you’re looking at foreclosure and bankruptcy.

Betrayal.

Dante placed the Betrayers at the deepest level of Hell, frozen in contorted, painful positions for eternity beneath the surface of an icy lake. It seems appropriate.

Thinking about this, it’s immediately obvious to me that I’m a trusting and somewhat credulous sort of person. I don’t automatically assume that everyone I meet is a liar who is out to take advantage of me. This is mostly temperament, I think. I won’t make the mistake of trying to say it’s good or bad. It’s just the way I am.

The downside of being a trusting sort of person is having your trust abused.

It’s happened to me more than once, as you might expect. I’ve been cheated of money. I’ve been lied to, and I’ve believed the lies to the point that I’ve stuck my neck out for a liar and had it (my neck) shortened a fingerspan or two when the lies finally came to light. My credulity is one of the many reasons that I’m not the most successful businessman in the world.

Heck, you might even say I’ve been pretty … stupid. As in not the brightest bulb in the pack, three bricks shy of a load, easily led by the nose, three dollar bill stupid.

So the truism would appear to have a nugget of truth in it after all. But there’s still the question: why do I pass this particular self-loathing off on conservatives? Why not the liberals? Why not blame the French? Why not despise left-handed violists who wear tennis shoes to a concert?

It has to do with the lies, I think. Lies lie at the heart of any betrayal.

It isn’t the lies the conservatives tell. It’s the lies the conservatives are told. The lies they so credulously accept. The betrayals they apparently don’t see coming. The betrayals that they screw their eyes up tight against in denial, as they pursue the fallacy of sunk cost.

In case you don’t know what the “fallacy of sunk cost” is, it’s the fallacy addressed by the expression “Throwing good money after bad.” It’s the belief that after “investing” so much in a failure, you have no choice but to continue with even more investment because otherwise you are somehow “dishonoring the sacrifice” you’ve already made. It’s doubling-down on a tanking stock portfolio. It’s giving your lying, cheating spouse a seventeenth chance because you’ve invested twenty years in the marriage. It’s mortgaging your house for a doomed business to honor the hard work you and your employees have already put in. It’s continuing to fight a losing war to “honor” the soldiers who have already died.

It’s continuing to vote Republicans into office long after they’ve betrayed everything you’ve ever believed in.

The fallacy of sunk cost is a very human thing. And it’s really quite stupid. Three dollar bill stupid.

Fool me once, shame on you. Fool me twice, shame on me. Fool me three times, thank God for term limits.

I went through years of thinking that Social Security was going to “run out of money.” Then I did the least little bit of actual research — I went to the Social Security website to see how the damn thing worked, and how much money they actually had left — and discovered the lie. It’s a whopper.

The truth? Social Security is income redistribution. It won’t “run out of money” unless everyone stops working and paying taxes. It does have a “rainy day fund” that is going to fall short of covering all the Baby Boomers at full benefit levels starting in 2033 because the Republicans have stopped them from fixing a minor problem. It’s a leaky faucet in the kitchen, and rather than simply buying new washers for the faucets, the Republicans have prevented anyone from touching the sink. They’ve instead moaned about the inevitable basement full of water, rotten floorboards, and total structural collapse of the house. Social Security is doooooomed. Dooooooomed, we tell you!

The Republicans want us to sell the doomed house. Because of a leaky faucet. So to whom should we sell? Glad you asked. The Republicans have some friends who would be happy to take it off our hands…. They’re called Wall Street. You know, the guys who brought us the 2008 recession? The guys who have been manipulating LIBOR? Yeah, those guys.

Getting taken in by that lie, even peripherally, left me feeling kind of … well, stupid.

Just a couple of weeks ago I was agreeing with some conservative about how Congress has robbed Social Security blind. I even started a blog entry about Congressional theft from the Social Security Trust Fund, which forced me to do the least little bit of actual research — and I found out this is utterly false. It’s based on the twisted argument of someone who has no clue what a Treasury Bond is — or who knows perfectly well but just wants to tell a lie to frighten people and take advantage of them.

Again, I felt pretty stupid.

I’ve wasted a lot of time and energy in the last ten years researching bullcrap.

  • Social Security is a Ponzi scam: bullcrap.
  • Environmentalists are the cause of rising gas prices: bullcrap.
  • Illegal immigrants are stealing American jobs: bullcrap.
  • High US taxes suppress investment: bullcrap.
  • US financial regulation inhibits economic growth: bullcrap.

The list could be extended to many, many pages. All bullcrap.

It isn’t bullcrap because I’m a liberal and I disagree with it. It’s bullcrap because it isn’t true.

Conservatives are stupid because they have fallen for these lies.

Just as I have.

That’s why they make me so angry. They remind me of me, back in the day when I was young and stupid.

Like a few weeks ago.

On Gay Marriage

I ran across a doozy today. The article is Smug, Wrong, and Stupid on Gay Marriage. The article itself is humdrum, so much so that I never quite grasped the author’s point, but there’s a comment attributed to someone named Bill Baar, which I must quote in its entirety.

It’s rare to see a constructive debate between the sides. I fault the “marriage equality” crowd as my experience is they’re usually the first to call the otherside hateful, phobic, and so on.

I have been unable to get a dialogue on two world views out of my head, so I have to vent it here.

Levitas: …but how can you attribute those particular words to Jesus in the complete absence of any corroborating evidence that he spoke them, or even that he existed?

Gravitas: Now wait a minute. First, there’s plenty of intertextual corroboration that says somebody spoke those words, so why not Jesus? Second, whether they were actually spoken in a historical context isn’t really–

Simplyass: Hi, guys! What’s up?

Gravitas: Oh, hi, Simplyass.

Levitas: Yo. We’re just having a friendly debate about Christianity.

Simplyass: (shudders) Christians make me sick. They’re so … so … unnatural.

Gravitas: There’s nothing unnatural about Christians!

Simplyass: Of course they’re unnatural. No one is born a Christian. They have to be converted.

Levitas: You know, he has a point….

Gravitas: That may be true, but–

Simplyass: It’s that Christian Agenda. They’re out to convert everyone in the country, starting with the children.

Gravitas: No responsible Christian tries to convert children, a person needs to be of the age of consent to–

Simplyass: Children. They’re after the kids. Through the schools. That’s what school prayer is all about. Christians shouldn’t be allowed anywhere near children.

Levitas: What if it’s their own children?

Simplyass: (shudders) What a horrible thought! Two … Christians? With kids of their own? Those poor kids. They’ll need therapy for sure. At taxpayer expense, no doubt. It shouldn’t be allowed. Christians should have their kids taken away. If the government was any damn good, it would protect the innocent. But the government has been been bought out. We all know that.

Gravitas: Now wait just one darn–

Simplyass: My boss says the government ought to round up the Christians and put them behind fences. Big tall fences. But I think that’s too little, too late. The government needs to kill them.

Levitas: (weakly) Kill them? For being Christian?

Simplyass: Absolutely. It’s the only compassionate thing to do. They suffer so, you know. All that sin and guilt and “I’m not worthy, Lord.” It drags down all the rest of us, too. It’s what’s brought our great nation to the brink of ruin, you know.

Gravitas: You have no idea what you’re talking about, do you?

Simplyass: (blinks) Are you one of them? You poor thing. You know, I belong to a club that helps people like you find their natural reason again. Why don’t you come to one of our Wednesday evening get-togethers? Good food, good fellowship, and we’ll help you find your way back to Mother Reason.

Gravitas: I have no intention of coming to one of your meetings! There’s nothing wrong with me!

Simplyass: (shrugs) Well, don’t say I didn’t warn you. When the government finally wises up and realizes how much damage you’ve all done to the moral fibre of this great nation, they’ll do the right thing. They’ll do the Will of the People. Wouldn’t want to be in your shoes then.

Gravitas: You are the most bigoted, hateful, xenophobic twit I’ve ever met….

I have to fault Gravitas, of course. In my experience, people like him are usually the first to call the other side hateful, phobic, and so on.

European Socialism

The term “European Socialism” keeps turning up in the Rhetoric of the Right, and they seem to expect it to make my hair curl and give itself highlights.

I’ll confess that I don’t know a whole lot about European Socialism, in the sense of what it is really like to live there. So when the Right says that it’s “horrible” and “debilitating” and that it undercuts “freedom,” I can’t really call them liars. At least not personally. I simply don’t know enough about it.

But what I do know is that they are telling untruths when they say it is funded by “massive taxation.” I know this because I sat down and did the math. The truth is that Americans pay more in taxes than the European Socialists do.

Let me repeat that. American taxation is higher than European taxation.

I picked the Netherlands (where the Dutch live), a nation with lots of individual freedoms, its own military, and which is also one of the most “socialized” of the European nations. Their tax-paid benefits include:

  • Military
  • Social Security (retirement/disability)
  • Socialized Health Care
  • Public Education (through college/trade school)
  • Unemployment Insurance
  • Housing Assistance
  • Child Care Reimbursement
  • Annual Vacation Reimbursement

I did this calculation back in 2009, based on 2008 tax rates. That was at the end of Saint GW Bush’s radical tax-cutting spree, so US taxes were as low as they’d been in a long time, and health-care insurance was still reasonably affordable because the insurance companies could still rake in profits by selling it only to people who didn’t need it.

The US effective tax rate is shown below with no medical insurance coverage, with 2008 (private) medical insurance coverage, and with the 2012 “affordable” medical insurance coverage factored in. I omitted college costs and benefits, which has the effect of making the US situation look better than it really is.

Annual Income (US $)
$25,000 $50,000 $100,000
United States (no med) 36.1% 40.2% 44.4%
United States (2008 med) 63.7% 54.0% 51.3%
United States (2012 med) 100.0% 72.2% 60.4%
Netherlands 40.1% 44.3% 48.8%

If we don’t include any healthcare costs in the US, we can see that taxation in this European cradle-to-grave Socialist State is a whopping 4% higher than in the US, across all tax brackets (blue versus green).

When we add in health insurance as it existed in 2008, the US effective taxation becomes regressive rather than progressive: it takes more away from the poor than the rich (orange — note how it decreases as income rises). Note that it is higher than the Dutch rate in all income brackets (green).

When I update those health insurance numbers to what they have soared to under the “Affordable” Care Act of 2008, health care actually becomes completely unaffordable for low-income people, and spikes even the higher income brackets (yellow).

Of course, regressive taxation by definition spares the wealthy. So at income-levels of $1M/year or more (not shown) where paying for health care comes out of the petty cash box you keep by the garage door (as does college tuition for your kids), we can get back to claiming that European Socialism has “massive taxes” of an additional 4% for the ultra-wealthy.

Next time you hear some conservative Limbaugh-mouth ranting about the “high cost of European Socialism,” point them over here. And if they don’t like my numbers, they can refigure them for themselves. Assuming they can add.


Here are the hard numbers.

US/Colorado Taxes
Taxable Annual Income
(single earner)
$25,000 $50,000 $100,000
Federal Income Tax i 3349 8844 21978
FICA Tax ii 1913 3825 7650
FICA (employer’s contrib.) 1913 3825 7650
State Income Tax iii 1250 2500 5000
Property Tax iv 500 1000 2000
Unemployment Insurance v 110 110 110
Health Insurance Premiums
(2008) 3900 3900 3900
(2012) 6000 6000 6000
Health Insurance Deductible
(2008) 3000 3000 3000
(2012) 10000 10000 10000
Total
(no med) 9035 20104 44388
(2008 med) 15935 27004 51288
(2012 med) 25035 36104 60388
Effective US Tax Rate (Total / Income)
(no med) 36.1 % 40.2 % 44.4 %
(2008 med) 63.7 % 54.0 % 51.3 %
(2012 med) 100.0 % 72.2 % 60.4 %

 


 

Dutch Taxes
Taxable Annual Income
18,121 €
($25,000)
36,242 €
($50,000)
72,484 €
($100,000)
National Income Tax vi 6091 13701 30693
Health Insurance Premium vi 1177 2355 4711
Total 7268 16056 35404
Effective Dutch Tax Rate 40.1 % 44.3 % 48.8 %

Notes:

US federal income taxes are mandatory; 2008 tax tables were used.

US FICA taxes pay for Social Security and Medicare, and are mandatory. Individual and employer contributions of 7.65% were used, for a total FICA tax of 15.3%.

US state income taxes vary from zero (Wyoming) to nearly ten percent (California), and are mandatory. I chose the approximate Colorado rate of 5% (actual 2008 rate was 4.65%).

US property taxes pay for public primary and secondary education. They are loosely related to income, in that people with higher income tend to live in more expensive properties, and vary from below half a percent (Louisiana) to nearly seven percent (New Jersey). I chose the approximate Colorado rate of 2%.

US unemployment insurance is optional for small companies; unemployment benefits are only available to employees of companies that pay premiums. Premiums vary by state, from negligible (Georgia) to $500/year/employee (Oregon). I chose the approximate Colorado rate of $110/year/employee.

US health insurance rates for 2008 were based on my own business-group-of-one rates in Colorado at age 52, as advised by my health insurance broker as the best moderate coverage for the lowest cost. This is comparable to the reported national average of $6000/year.

US health insurance rates for 2012 were based on half my own business-group-of-one rates in Colorado for my wife and I (family coverage), which is actually somewhat lower than what I would pay for individual coverage.

Salaries in US dollars were converted to Euros using the 2008 conversion rate of 1.00 USD == 0.724840 Euro.

Dutch national income tax pays for social security, public education, and unemployment insurance, as well as other benefits, and is mandatory; 2007 tax tables were used.

Dutch national health insurance tax is a supplementary tax to offset the costs of health care, and is mandatory. I used the higher value of 6.5% for normal income.

I omitted post-secondary educational costs and benefits. Education is free (government paid) in The Netherlands, but not everyone gets into college or trade school — you have to demonstrate some aptitude to get into advanced education. So I’ve omitted it, which makes the Dutch figures look higher (or the US tax figures look lower).

The practical difference is that Dutch students who are accepted for post-secondary education graduate without debt and are free to take a job and begin earning their own living wage immediately; US students who choose to go to college graduate with a debt roughly the size of a home mortgage and are indentured to the banks, often for decades.

http://taxes.about.com/od/2008taxes/qt/2008_tax_rates.htm

Republicans and Democrats

I’ve been reading a bit on politics. Randomly insane rhetoric and behavior makes me nervous, and I’ve seen little else since the Republican primaries started. I’m sure it will get much worse as the Democrats start their campaigning.

As it turns out, there are underlying patterns. I’m not sure whether those patterns make me feel more comfortable or more nervous. But here’s what I’ve learned.

We’ve had a two-party system for a long time, and it settled into the Republicans and Democrats around the middle of the 1800’s. What’s interesting is that, although the names have remained the same, the parties have effectively switched places.

Turn back to the Civil War era. Democrats were the South. Republicans were Yankees, the North. Democrats supported states’ rights and slavery. Republicans were Federalists, and were neutral-to-opposed on the slavery issue. Democrats represented wealthy landowners. Republicans represented wealthy industrialists.

After the Civil War, the freed blacks — nearly all of them working class or poor — voted Republican for obvious reasons, along with most of the rest of the Northern working class. The Democrats remained loyal Southerners, unsettled representatives of the losing side in a major civil war.

This is the context in which you hear about Abraham Lincoln (Emancipator of Slaves) or Teddy Roosevelt (Great Outdoorsman and Conservationist) being Republicans, versus Woodrow Wilson (overt racist, American imperialist and architect of the One World Order) being a Democrat.

Things changed substantially after the market crash of 1929.

The blame for the Great Depression landed squarely on the Republicans, rightly or wrongly. FDR was a Democrat, and it fell to him to seek some resolution to the issues of the economic depression, the increasing unrest of farmers (who were moving toward armed insurrection), and the impact of the Russian Revolution and the ideals of Communism and workers’ rights. These issues were severe: he was under pressure from both Democrats and Republicans to repeal the Constitution and establish a Fascist dictatorship, as was happening in Europe under Hitler, Mussolini, Franco, and Salazar. Instead, he chose to implement the New Deal. When a reporter gushed that if FDR’s New Deal worked, it would make him the most famous American president of all time, FDR replied that if it DIDN’T work, he’d be the LAST American president.

FDR’s New Deal politics made a strong populist appeal, and drew the black vote to the Democrats for the first time in the party’s history, as well as the support of the new labor unions. FDR’s political opponents — Republicans — found themselves less sympathetic to the workers and the Communists in Russia, and more sympathetic to the elites — particularly the financial elites — and the Fascist movements of Europe.

In effect, the parties switched places — ideologically, if not geographically. The black and working-class people who used to vote Republican now voted Democrat. Democrats were consequently more sympathetic to socialism, Republicans to fascism. Bankers — whom FDR had no choice but to rein in after the market excesses of 1929 — flocked to the Republicans, and the Democrats, with their broad popular base, let them go. Democrats, formerly the champions of states’ rights, became the champions of expanding federal power “to do good.”

Things changed again in the 1960’s, when Lyndon Johnson was cornered into signing the landmark Civil Rights legislation. He and the Democratic operatives of the time believed that they were signing away the entire Southern vote. They were correct, though some say the reason was not so much racism as states’ rights, which the Democrats had abandoned. In either event, in the 1970’s the South began to swing Republican for the first time since the Civil War. At the same time, the strong influence of labor unions in the industrialized North had pulled that region away from its historically Yankee Republican leanings.

This, then, was the world I grew up in: Democrats were the labor party of Detroit and Chicago and the steel and coal mines, as well as the more racially-mixed working-class New Deal liberals (i.e. “communists”); Republicans were the party of corporate elites, big money, and the conservative (i.e. anti-communist/fascist) West and Deep South. This was geographically and ideologically almost the exact opposite of the situation in the late 1800’s, which is why it’s so confusing when someone tries to say the Republicans are the “party of Lincoln,” or the Democrats are the “party of Woodrow Wilson.”  That was true of the parties as they existed in 1920, but not as they existed in 1970.

Religion — specifically, Christian Evangelicalism, a 1947 splinter from the older Fundamentalist movement — entered the picture in the 1980 election of Ronald Reagan. Two specific political movements (Jerry Falwell’s Moral Majority, and Ralph Reed’s Christian Coalition) mobilized the still-uncomfortable Southern Republicans and delivered enough Republican votes to give Reagan his “landslide mandate” over the incumbent Democrat, Jimmy Carter. Evangelicalism has been an inseparable part of Republicanism ever since, even though the Goldwater Republicans of the 1950’s would have spit in disgust at what they would have called an open act of prostitution between government and religion.

In the late 1980’s, disaster struck the Republicans, something even worse than Nixon’s disgrace in the 1970’s: the Soviet Union fell. The Republican Party was by then so deeply invested in militarism and anti-communist rhetoric that it found itself effectively without a reason to exist.

At the same time, the Democrats were suffering from the rapid de-industrialization of the US as the Steel Belt became the Rust Belt. As heavy industry faded, so did the labor unions, their decline accelerated by Ronald Reagan’s active union-busting. The Democratic Party had lost its main constituency, and (more significantly) its expected source of funds in a political world increasingly dominated by expensive televised marketing campaigns.

So in the 1990’s, both the Republican and the Democratic parties converged on the only real money left in the game: the corporate/financial sector. Bill Clinton gave the corporations all the “free trade” they wanted through the NAFTA and WTO treaties. The Republican Congress repealed the Glass-Steagall Act and opened the door to the 2008 financial collapse. People started to comment in the 1990’s that there was no visible difference between the Republicans and the Democrats, largely because both were competing for exactly the same money, and pandering to exactly the same constituency — the constituency we are now calling the 1%.


So where are we now, in 2012?

The Democratic Party still wields the rhetoric of the people, but represents almost exclusively the interests of the financial and corporate elites. There are still second- and third-generation New Deal liberals in the Democratic party, but most of them are getting old and retiring. The new breed of Democrat is less interested in serving the public good, and more interested in attracting money for their campaigns, most of which comes from corporate sponsors. They are rapidly taking the place held by the pro-business Republicans of my childhood.

The Republican Party is a squirming, purposeless mass of contradictory impulses that has coughed up four cartoon characters who represent four distinct and incompatible collections of these impulses. Any two of the four groups can find some common ground, but any three of them taken together can find nothing that they all agree on — other than “beating” the Democrats.

The first group, the Traditional Republicans, are the old-school pro-business-industrialist core of the party. These are the classic supporters of Wall Street, international banking, and large corporations. The Bill of Rights is not of much concern to them: that’s for the little people. Their concern is with low taxes (particularly capital gains and inheritance,) and business regulation (ideally, none whatsoever, except whatever it takes to put their competitors at a disadvantage.) They have been consistently anti-environmental and anti-labor. They spend billions lobbying for preferential treatment. Many of them rely heavily or even exclusively upon corporate welfare, such as military contracts or congressional pork-barrel projects, yet (ironically) are one of the main sources of the bizarre propaganda that “private industry creates jobs, not the government.”

It seems appropriate that their cartoon mascot, Mitt Romney, is by profession the very apotheosis of unchecked corporate greed: the corporate reaver. The “reavers” of old were bands of pirates who would light fires on fog-bound and stormy shorelines to lure ships into thinking there was a safe port where they could wait out the weather. The ships would wreck on the reefs, and the reavers would then wade out, kill any survivors, and loot the wreckage. That is precisely how Mitt Romney made his substantial fortunes, using corporate mergers and acquisitions instead of bonfires. He’s a job-killer, a wealth-concentrator, a facilitator of monopolies, and an upper-class twit who makes $10,000 bets on live television as casually as I would bet a beer in a pub.

The second group, the NeoCons, are still around, despite the catastrophic consequences of their run in the sun from 1996 to 2008, and their full control of federal government from 2000 to 2006. Their origins lie in the fascist leanings of the post-FDR Republicans. They rose to substantial power in the 1996 Republican Revolution led by Newt Gingrich as Speaker of the House, as heirs apparent to the Republican Party in the aftermath of the Soviet collapse — with no more Communists to fight, the NeoCons turned to world conquest through militarized expansion of “democracy” and “capitalism.” They are not in fact democratically inclined at all, nor do they support capitalism — they are openly fascist/corporatist and contemptuous of the US Constitution (Dick Cheney said on several occasions that he didn’t believe a constitutional democracy could survive in the modern world of terrorism.) They are also fiscally irresponsible, disingenuous, amoral, and profoundly unrealistic Utopian idealists.

Newt Gingrich is a perfect caricature of the NeoCon movement, and was in fact its leader in 1996: bombastic, hypocritical, indecorous, fueled by concentrated hubris; a used-car salesman who would cheat his mother and did cheat on his wife, lost in a fantasy-world that includes moon bases and a world-wide capitalist democracy formed of white people who all think exactly alike — and exactly like he does, only not (of course) quite so well.

The third group has its roots in the Evangelical political coalitions that brought Reagan to the White House in 1980, and go back further to the Fundamentalist movement of the early 1900’s, then completely skip over the Enlightenment-inspired deliberations of the Constitutional founders to the Puritan charter-colonies of the 1600’s. The Constitution and its history are, in fact, an embarrassment to the Religious Republicans, and they have invested a lot of effort in rewriting history to paint the Constitution as a Christian document of a Christian nation. Their social agenda is laid out in the goals of Fundamentalism, as outlined in the 1911 publication of The Fundamentals, and includes such things as defeating communism, preventing the teaching of evolution in public schools, mandating public (Christian) prayer in schools, putting women back in their place in the kitchen under the authority of their husbands, and criminalizing “immorality.” Most notably, they support a one-way interpretation of “separation of church and state” — in their view, the government must do God’s bidding (exactly as they proclaim it,) but must leave the churches free to do or say anything they please, unburdened by taxes or legal constraints. They have little interest in democracy, preferring instead to honor the “lordship of Christ” through a more hierarchical arrangement. Their extreme elements, such as James Watt as Secretary of the Interior under Reagan, believe in the “End Times” in which the world is destroyed and Jesus returns to save us: as a consequence, they have absolutely no qualms about destroying the earth, environmentally or in unbridled nuclear war.

The Republican Party coughed up two cartoons to represent this view, Michelle Bachmann to represent the Protestant strain, and Rick Santorum to throw the Catholic mitre into the ring. Both of these represent the extreme fringe of their respective religious bodies, as members of those religious bodies have taken pains to point out. Both conflate religion with politics in ways that are blatantly unconstitutional, and of deep concern to most US Americans.

The fourth group is the Tea Party, an attempt by the third-party Libertarians to gain some legitimacy under the Republican umbrella. As the newest kid on the block, the Tea Party agenda is less well-defined than the other groups, but what seems to be a common thread is the idea of reducing the size and importance of federal government. A sizable fraction want to reduce or eliminate all government, including state and city government. In the same way that the Communist movement was built on the economic theories of Karl Marx, the Tea Party movement is built largely on the social and economic theories put forth in the novels and plays of Ayn Rand, combined with fragments of unrelated theories from the Austrian school of economics, which includes economists Fredrich von Hayek and Ludwig von Mises. In the Tea Party view, Capitalist free markets solve every economic and social injustice automatically so long as government doesn’t interfere, private ownership is the basis of all morality, the idea of a commonwealth or shared responsibility is a pernicious myth, and the world is divided into a black-and-white conflict between “producers” (who produce everything and therefore should own and control everything) and “parasites” (who produce nothing but instead whine and steal from the producers, and therefore should have nothing.)

The Republican caricature for the Tea Party is Ron Paul, who comes across as a wise grandfather and kindly country-doctor. Examining his views in any detail reveals a grotesquely unjust, mathematically impossible, politically unachievable stew of anti-government anti-tax Libertarian/Utopian sentiment that would reduce the nation, not to ruin, but to cannibalism.


The pendulum may eventually swing back. The Republicans can’t sustain much more of this cartoon nonsense, and will swiftly vanish from the political scene if they don’t pull together some kind of common vision. The Democrats are going to become very dangerous, I think, in the coming decades, as they lose their liberal idealism and pander more and more to big money.

We’ll see.

It may not help anyone else, but it always helps me to see where this stuff comes from. It may still be insane, but at least it isn’t randomly insane.

Government is the Problem

Some have called them the Nine Words of Reagan: “Government is not the solution; government is the problem.”

I still hear this in the Libertarian/Tea Party catechism. A recent post on Patheos, The Silence Before the Restoration, writes poignantly about the emptying of the “Inland Empire” just east of Orange County in California due to housing foreclosures, and takes a swipe at “a body of sclerotic political ideas, translated decades ago into policies that are now failing on a colossal scale.“

To me, this means the disastrous neoconservative ideology of Reagan and the rigid ideologues who follow in his footsteps, including modern Republicans, Conservatives, Tea Baggers, and Hung-Dog Democrats. For those worthies, it means the New Deal crafted under Franklin Roosevelt, particularly Social Security. The article above does nothing to clarify what the author means, but based on her previous writings, I think she is probably referring to the New Deal. It doesn’t really matter, though.

What bothers me deeply about this kind of discussion is the shallowness and the fact that it stops at finger-pointing.

I can’t claim to be an expert on the 2008 financial collapse that led to the “Silence” the above author bemoans, but I do know a little bit about it, just from reading and putting stuff together. Let’s walk through it, because I think it leads to an interesting place.


Let’s begin with the collapse itself.

First, the widely-accepted trigger for the collapse was the unravelling of the “subprime mortgage” bubble. A few pieces of background are needed to grasp this.

First, mortgages have always been considered “safe” loans because they are backed by collateral, namely the house. If you default on your mortgage, the bank forecloses and sells your house to pay off the remainder of the loan. Since the bank only needs to recover the balance on the loan, they sell at “foreclosure” prices — a fraction of the actual market value — so banks have rarely had to worry about getting stuck with a property for very long once the paperwork clears.

Second, if you look at the payment schedule, you’ll notice that you don’t really start paying off the loan until about halfway through. The interest is “amortized,” meaning that your first mortgage payment to the bank is almost 100% interest — you might pay back a few dollars of your debt, but the rest of the fixed monthly payment is pure interest. By halfway through the loan, you’re paying about 50% interest, and 50% on the loan with each payment. By the last payment or two, you are paying almost no interest, you’re just paying back the loan.

What this means is that bank has made most of its profits from the loan within the first few years. After that, the loan isn’t worth nearly as much to them. So within a few years after initiating a new mortgage, banks are happy to sell the mortgage to some other bank or holding company. The buyers like these loans because even though they don’t make as much money, they are quite a bit safer than the original mortgage — if you haven’t defaulted in the first couple of years, odds are (or at least used to be) that you never will.

Third, in 1933 the Glass-Steagall Act was passed to address some of the banking excesses that resulted in the Great Depression. Among other things, this separated commercial banks from investment banks. In 1999, the Gramm-Leach-Biley Act repealed this provision of Glass-Steagall, removing any legally enforceable conflict-of-interest between investment banks and commercial banks. This opened the door to the subprime mortgage scam.

Here’s how the scam worked. A bank would make a “subprime” loan on a house or commercial property, meaning a loan way beyond the applicant’s demonstrated ability to pay it back. In the past, no bank would have done this, because they would be all but asking for a default, which is a stupid thing for a bank to do. But these banks didn’t intend to keep the loan for very long: they gambled that the applicant would make at least the first six months to a year of payments before they defaulted, during which the bank would collect almost pure interest on the loan. Then they’d sell the loan to someone else, and let them pick up the pieces if (when) the applicant defaulted.

Yes, that’s fraud. But it only starts there.

Prior to 1999, this would not have worked, because the only buyers interested in mortgages were other commercial banks of one sort or another, and they understood mortgages quite well. They weren’t stupid enough to buy second-hand subprime mortgages. And they bothered to ask.

After 1999, however, the banks could bundle all of these mortgages together as investments and sell them in blocks to investment speculators — who, when it came to mortgages (or even investments) were well-known to be idiots. All that the investors understood, when they even knew what they were buying, was that “mortgages are safe.” After all, if someone defaulted on a mortgage, they’d lose their house, and no homeowner would want that, right? And banks didn’t offer loans to people who couldn’t pay them back, right?

Well, a lot of the buyers weren’t real homeowners: they were “flipping” houses. I knew a couple doing that. The idea is to buy a fixer-upper with no money down, even though you already have a mortgage (or rent) and no sane bank would lend you the money. Then you add a bunch of cheap, cosmetic fixes to the house and immediately resell it for a substantial markup. As a flipper, you could care less if the thing wouldn’t sell and you had to let the bank take it. So every assumption the investor made was wrong.

The ratings agencies colluded with the investment bankers, and offered triple-A ratings to these junk mortgage bundles. That’s also fraud, since from what I’ve read, they should have known (and did know) better. So even if the idiot investors decided to check up, the ratings told them everything was just fine. No worries man. These are safe investments.

Now you’d think that the investment bankers would be a little leery, since their clients would be left holding the bad mortgages at the end. That’s where something called a “default credit swap” entered the picture. This is a kind of futures market that spreads the risk of a default. It works reasonably well if defaults are just the normal random business failures, personal bankruptcies, and so forth. But when the risk consists of everyone swan-diving into a live volcano, it doesn’t really matter how much you spread the risk — everyone is going to get burned. Because these default credit swaps were explicitly “deregulated” by the Republican Congress in 2000, there was no oversight and no transparency to the default credit swap markets, so no one could see that people were beginning to bet in large numbers that these triple-A junk mortgages were going to tank.

Then we find out that firms like Goldman-Sachs were actually going a step further and betting on the defaults. There’s an investment process called “selling short,” which is a way of making money (usually lots of money, very quickly) if the bottom falls out of the market, and these firms were simultaneously advising their clients to buy triple-A rated junk mortgage bundles, and then betting against their own clients by selling short on those same bundles. That’s also fraud.

When it all came apart in late 2008, the entire financial industry ran to the government, screaming, “Too big to fail! Too big to fail!”

Meaning, “If you let us go down, the US economy won’t dig out of the rubble for a thousand years.” The government — first Bush/Cheney, then Obama/Biden — didn’t have many options because these con artists were right. They really were too big to fail. So the taxpayers paid off much of the investment loss that would otherwise have sunk all the big investment firms/commercial banks that got caught up in this, which would have crashed the economy completely. Even with the bailouts, some of them went under. The economy shuddered, but it didn’t (quite) capsize.

This is why people think there should have been some nice, long jail terms coming out of the mess. Instead, most of the crooks got huge bonuses. Mission Accomplished.


I’ll be the first to admit that the above is an oversimplification of an extremely complex collapse, and I’m quite sure the details aren’t entirely correct. There was certainly fraud and collusion on a huge scale, a lot of utterly inappropriate deregulation of the banking industry, and a whole lot of people who fell asleep at the wheel. If my intent was to point fingers, I’d need to track down all of those details to truly identify the guilty. I’m not sure that’s even possible.

But I’m going to steer away from the finger-pointing to follow a more interesting thread. How did we ever get into this mortgage and credit mess in the first place?

That takes us back to Fannie Mae and gasoline.

In 1938, the New Deal founded the Federal National Mortgage Association (FNMA or “Fannie Mae”). Its purpose was to allow ordinary people to buy new homes, by providing federal backing for loans on new housing. Prior to FNMA, it was extremely difficult to get a mortgage on a new house, as is the case in most non-US countries to this day: if you wanted to own property, you needed to save up cash to buy it. Otherwise, you rented. Or lived under a bridge.

In Germany and much of Europe today, many people own property passed down from parents and grandparents, yet most of those people rent out their own properties, and live in places they rent from others — the property they own isn’t where they need to be. Real estate sales are rare (relative to US sales) and landlords are all VERY fussy about their tenants, many of whom live in their rented homes for twenty or thirty years (or longer). It was difficult for my friends, who worked in Tübingen for two years, to find a landlord who would rent to them on such a short-term basis.

Fannie Mae changed that pattern in the US, and had a number of entirely unintended consequences. Perhaps unforeseeable as well, though it seems pretty obvious in retrospect.

First, it funneled an unprecedented amount of money into the banking industry, increasing its status, wealth, and power over Congress. On average, a 30-year mortgage costs the buyer about three times the cost of the property. So when you buy a $150,000 house, you end up paying nearly a half-million dollars before the mortgage company turns over the deed. This created a housing “shadow economy” twice the size of the housing market itself, and every last dollar of that shadow economy belonged to the banks, and was drawn from the future earnings of the homeowner. In addition to vastly expanding the banks, it put a crippling drain on personal income.

Second, it created a “housing construction industry” that opened job opportunities for countless unskilled, semi-skilled, and skilled workers, which became so large that now the entire US economy is partially measured in terms of “new housing starts.” We have to keep building new houses simply to keep the economy going — even if no one wants or needs the houses. Otherwise the economy falters, the markets tumble, and people run around screaming about the end of the world.

This has changed the nature of construction. A friend recently asked me if I knew why all new restaurants were under 5000 square feet in size. I didn’t, so he explained. If a public building is more than 5000 square feet in size, building codes require a sprinkler system in case of fire. That costs money. So they keep the size under 5000 square feet, and they design the restaurants to burn right down to the concrete pad in the case of fire, at which point they scrape and rebuild. The buildings are additionally designed to last only 25 years, after which they expect to scrape and rebuild with or without a fire. New restaurants are designed as “throwaway buildings.”

That same philosophy governs new housing as well. Even as construction materials and techniques have improved, the long-term value of new homes has declined. The brick-exterior, hardwood-floor house my father bought in 1960 for $16,000 will outlast by many decades the $500,000 house my wife’s son is contracting to build this year. My wife calls it “toothpick and mucous” construction. That isn’t far wrong.

Third, easy mortgage credit for new construction combined with the gasoline-powered automobile created The Suburb, and facilitated the decay of inner cities as the middle classes within the cities moved out. The entire suburban landscape of the Inland Empire would not exist without Fannie Mae and the automobile. Since an automobile became a necessity for suburban living (which greatly expanded the automobile industry), banks began to extend easy credit for automobile purchases, which inflated the consumer cost of the automobile and expanded bank profits further. (Eventually auto financing became the most profitable portion of the Big Three automakers, which is in part why the credit collapse in 2008 hit them so hard — they weren’t automobile manufacturers, they were specialized banks with a barely-profitable side business in making automobiles.)

The ready credit for housing and new cars paved the way for consumer credit (unsecured signature loans). There have always been signature loans, but in the distant past, you had to be a person of substantial wealth to be good for a loan at a bank on the basis of your signature. For the common person, debt was a matter of shame and a mark of truly hard times, and banks wanted collateral. Once mortgages and car loans became commonplace, the idea of a signature loan through a “revolving credit account” could take root and grow. Again, this adds a transaction cost to every purchase, and every penny of that goes to the banks.

Manufacturing industries have increasingly turned over their cash management to major banks that provide them with a “line of credit” to purchase parts to make their products. If the banks stop lending, much of manufacturing in the US simply stops.

So it’s easy enough to see where the economic collapse of 2008 came from. It came from overwhelming indebtedness to and entanglement with the banks. When the banks started to fail, the economy’s heart stopped.

Why did we become so indebted? In large part, because the government made it so easy for ordinary people to buy a house, through Fannie Mae. That one act changed the entire shape of US culture and its economy.


But let’s not stop at this pointing finger, either.

Let’s argue for a moment that Fannie Mae really was the miserable, leftist-Liberal, mush-brained idea the Libertarians say it was. Let’s say all of the consequences were foreseeable, and that somehow, in some alternate Libertarian United States, Fannie Mae never happened. What would the US look like now?

The suburbs would not exist, or would be much, much smaller and a great deal wealthier: they would be for the “country club” set, and not available to the middle class at all.

Most inner cities would be far more vital, more middle-class affluent, and safer, because there would never have been an exodus to the suburbs.

Most people would rent, even if they owned property. Rents would, on average, be lower, since the owner would not need to cover mortgage payments with the rental income: they would actually own the property, and the rents would go to property upkeep and a modest “rentier’s income,” as in Europe.

The housing, automotive, and banking industries would each be only a fraction of their current sizes. Other industries would probably have taken their places as economic flagships, though it’s possible that economic activity would have been diverse and decentralized, with no major “industries” that dominated the economic landscape.

Debt would not have gained anywhere near the foothold it currently has, either in the private sector or the government. Credit cards would not exist. Without credit cards, there would likely be no debit cards, automatic tellers, or other retail purchase conveniences. We would still write checks, and withdraw cash from banks.

This doesn’t sound all that bad.

So let’s argue that this really would have been better, both for the country, and for most of us as individuals.

We come at last to the really interesting question: how do we get back to that world? Since that seems to be what the Conservatives want to do.


This is where I become angry with and contemptuous toward Republicans, Conservatives, and Tea Baggers. They haven’t even begun to think this through.

It’s one thing to speculate on what the US would have been like if Fannie Mae had never happened. But Fannie Mae did happen, and the US changed.

We now have middle-class suburbs saddled with crushing debt, and urban decay. We have a financial sector that dominates both the economy and the political process like an ill-tempered, diarrhetic gorilla in a phone booth. We have a housing industry that, when it gets a head cold, sends the entire economy to the emergency room with cardiac arrest.

If we want to go back to a pre-Fannie Mae world, the first thing that has to go is the American Dream of middle-class home ownership. Because that is precisely what Fannie Mae facilitated. That is precisely what drove us into the 2008 collapse.

We need to dump debt. Not the federal debt. All debt. Including mortgages.

I don’t see Conservatives talking about this.

I don’t see Conservatives talking about any relevant issues at all.

They remind me of the old joke about Druids:

Q: How many Druids does it take to change a light bulb?
A: Thirteen. One to change the bulb, and twelve to compose poetry about how much better the old bulb used to be.

Except that Conservatives only provide twelve (bad) poets, and no light bulb.

Social Security: Much Ado About Nothing

I started out this afternoon with a simple question: how many Social Security beneficiaries are retirees?

The right wing has had its underwear tied up in knots over our “nanny state” for quite some time, and it occurred to me to try to figure out just who is being “nannied.” Not me, for sure — I still have to work for my beer. But presumably there is this huge class of undeserving lazy bums who are being treated to a lavish lifestyle at taxpayer expense: other than Congresscritters and the well-connected rich, I mean.

I wanted to know just how much of my taxes these bloodsucking leeches (not the Congresscritters, etc.) are draining away from the common good.

Some puzzling things cropped up.

First, I went to the Social Security site to find out how they’re spending my money, and I can’t find a category for “bon-bon eating, Lexus-driving, unwed welfare mothers.” Here’s what I did find:

  1. Old Age, Survivors, and Disability Insurance (OASDI)
  2. Supplemental Security Income (SSI)
  3. Medicare
  4. Medicaid
  5. Unemployment Insurance
  6. Workers’ Compensation
  7. Temporary Disability Insurance
  8. Black Lung Benefits
  9. Veterans’ Benefits

I dug into some of these briefly, and I still couldn’t find the bon-bons. I assumed they are hidden in the fine print. So my next step was to produce the following chart:

I simply dug out my OpenSource version of Excel and plugged in the numbers from the Social Security summaries for 2009. I won’t say they made it easy. For instance, here is the OASDI information:

At first glance, this looks like $1.3 trillion. But if you stare at it long enough — in context with other entries where they did the same thing — you realize that the first item is a total, and the second two (which add up to the the first) are subtotals. They only spent $675 billion on OASDI, not $1.3 trillion.

Accountants who produce these reports are doofuses, and should be spanked.

The veterans’ benefits were particularly opaque, since they refuse to tell you anywhere how much they actually spent on veterans. Instead, all you get are average monthly benefits in certain categories, and then total numbers of recipients in completely different categories. I expected serious cover-up and hanky-panky, so I took the worst possible case: the total number of veterans paid (about 3.3 million) times the average monthly amount ($2673) for 100% disability, which should be WAY more than was actually paid out. Even with this grotesque overestimate, it still amounts to diddly.

The Big Three expenditures are OASDI, Medicare, and Medicaid — they account for well over 85% of what Social Security pays out (remember, I inflated veterans’ benefits because the doofus accountants left out the totals.)

OASDI is the retirement benefit — Old Age, Survivors, and Disability. These are all people who have put money into the system for decades. It isn’t available to illegal aliens, nor to the indigent, nor to welfare mothers eating bon-bons.

Medicare is generally available only to people who qualify for OASDI. No illegal aliens, indigents, or bon-bon eaters there, either.

Medicaid is intended to cover medical expenses for the poor. I only skimmed through the summary, but it looks pretty spartan, and it’s not easy to qualify. I also see a lot of signs in private-practice physicians’ offices indicating that they don’t accept Medicaid, so it seems like treatment options are limited. This might cover the bon-bon removal if you were to choke on one. It wouldn’t help at all with the Lexus.

As a side note, I suppose we could shoot sick people who can’t pay for medical care, and save a whopping 17% of the Social Security budget. That’s a different discussion for a different day. I’m still hunting for the bon-bon eaters.

I don’t think the bon-bon eaters are covered under Veterans’ Benefits, Workers’ Compensation, Federal Unemployment, or Black Lung Benefits. SSI applies only if you are over 65, or are blind or disabled, whether you eat bon-bons or not.

So that leaves the Temporary Disability Insurance, and finally, FINALLY, I find the welfare mothers! Yes, the TDI does cover pregnancy as a temporary disability: in California, Hawaii, New Jersey, and New York. Period.

Total fraction of the Social Security outlays? Three tenths of one percent. Assuming that every single TDI recipient is a bon-bon eating welfare queen.

Wow. I feel so ripped-off. Not by the welfare mothers. By the damned right wing whistle-brains who sent me on this fool’s chase.

They did the same thing with NPR a while back. If the federal budget is a fully-stocked 45-pound backpack, the entire federal contribution to NPR weighs less than a single “Inspected by #20” slip of paper in the bottom of one of the backpack pockets.

Fiscal responsibility my ass.


While on this subject, I was told by one conservative that Social Security is a Ponzi scam. I didn’t entirely understand this comment, but found a short, clarifying discussion on the Wikipedia page for Social security. The argument on that page is pretty clear.

A Ponzi scam is an investment scheme where I claim to have a wealth-creation tool — let’s say, a Magic Formula for predicting horse races — and I gather money from some credulous and well-heeled investors (some of whom may be in on the scam). I spend their initial investment on advertising: I go to a broader audience and say, “I have a Magic Formula, and it really works! Look at these famous, well-heeled investors who have already signed up!” I rope in a whole lot of new investors who think if John Moneybags can invest in this, it must be good. Now I have a huge pile of cash from the new investors, so I use it to pay out to my first (small) circle of investors, all of whom are very satisfied with their 100% return, never mind where it came from. With the money left over, I go on television and claim 100% return from my Magic Formula, and my initial investors will testify that, by golly, they did get 100% return on their investment. The money that brings in is paid out to the second circle of investors, who are also very happy with their 100% return on their investment.

Note that I have never gone anywhere near a horse racetrack; I have never once used my Magic Formula. Nor does my “investment fund” have any money in it, on the average — every time I get a new flush of investment capital, I use it to pay out the previous circle of investors and draw in a bigger circle of new investors. It’s a variant on a pyramid scam, except that no one knows it’s a pyramid scam until it crashes.

Social Security isn’t even close to a Ponzi scam. No one believes it generates wealth for its investors. It simply taxes one class of people (workers) to pay benefits to a different class of people (retirees). It’s a wealth-redistribution program. Period.

The money you contribute isn’t held in trust for you when you retire. It’s spent immediately on people who have already retired. Your retirement will come from the people still working when you retire. If they all stop working, or stop paying taxes, or the economy or the government collapses, you won’t get a dime. If managed carefully in a functioning economy, however, there is no reason for it to ever fail.

It’s simply children providing for their parents in their old age, averaged out over an entire nation. You helped pay for my Dad’s retirement. I helped pay for your Mom’s last days in the hospital. Where is the big moral crisis in this?

Yes, it sucks to be on the tail end of the Baby Boom, where I sit, because I will pay more, and receive less, than all those bastard older brothers and sisters of my friends. They suck.

I have about a billion other things to whine about, too. Want to hear about my plantar fasciitis?

It isn’t quite as bad as it seems, though — that’s what the Social Security Trust Fund is all about. Those clever fellows in charge of the fund have actually been saving away a little bit of those Boomers’ contributions rather than just paying it all out to current retirees, so that when the Boomers retire, it doesn’t ALL fall on the backs of the next generation. When the last of the Boomers drop out of the system, that trust fund should be just about empty, because that was precisely what it was for. It was just a buffer to get the Boomers through.

Yes, the Social Security Trust Fund is going to go bust. It’s supposed to.