The Origins of Rising American Kleptocracy: Russian Kleptocracy

Plutocracy: government by the wealthy; an elite or ruling class of people whose power derives from their wealth

A disturbing article in The Atlantic magazine, Russian-Style Kleptocracy Is Infiltrating America, focuses on current American politics and the false image that America had about Russia after the Soviet Union collapsed in December of 1991. Washington falsely believed that Russian leaders had committed to democratic capitalism, but in fact they were dedicated authoritarian kleptocrats.

The Founding Fathers' worry: The author, Franklin Foer, points out that the Founding Fathers were very concerned with the possibility that bribery and the corruption it buys would become the norm. He is blunt on this point: “The Founders were concerned that venality would become standard procedure, and it has.” He argues that even before Trump rose to power state politicians and American elites had proved themselves to be “reliable servants of a rapacious global plutocracy.” The elites that Foer points his finger at include lawyers, lobbyists, real-estate brokers, and politicians in state capitals, all of whom enabled creation and hiding of shell companies. The financial opacity that created led to laundering of tens or hundreds of billions of dollars that kleptocrats accumulate each year.

The article concludes with this: “American collusion with kleptocracy comes at a terrible cost for the rest of the world. All of the stolen money, all of those evaded tax dollars sunk into Central Park penthouses and Nevada shell companies, might otherwise fund health care and infrastructure. . . . . One bitter truth about the Russia scandal is that by the time Vladimir Putin attempted to influence the shape of our country, it was already bending in the direction of his.”

How did American get Russia so wrong?: Foer argues: “Washington had placed its faith in the new regime’s elites; it took them at their word when they professed their commitment to democratic capitalism. But Palmer [CIA station chief in the US Moscow embassy] had seen up close how the world’s growing interconnectedness—and global finance in particular—could be deployed for ill.”

That sounds much like how the US was completely deceived for years by the kleptocrats who ran and still run the government in Afghanistan. In her book, Thieves of State, Sarah Chayes describes the simple but effective technique that kleptocrats employ to facilitate systemic, massive looting of an entire nation. In essence, kleptocrats speak English and they work hard to learn the jargon and acronyms that Western minds want to hear. The poisonous lies sound true and rational because it sounds so much like us.

Although Statin Chief Palmer tried to warn congress of what was happening, congress simply could not or would not see the ugly reality he laid out for them. Maybe they were already under the spell of corruption. Foer writes: “The United States, Palmer made clear, had allowed itself to become an accomplice in this plunder. His assessment was unsparing. The West could have turned away this stolen cash; it could have stanched the outflow to shell companies and tax havens. Instead, Western banks waved Russian loot into their vaults. Palmer’s anger was intended to provoke a bout of introspection—and to fuel anxiety about the risk that rising kleptocracy posed to the West itself. . . . . This unillusioned spook was a prophet, and he spoke out at a hinge moment in the history of global corruption. America could not afford to delude itself into assuming that it would serve as the virtuous model, much less emerge as an untainted bystander.”

Morals . . . . what morals?: That speaks volumes about the utter immorality of international finance, and complicit elites and politicians who know full well exactly what they are doing. It was all about the money, nothing else. Claims of selfless patriotism or high ethical standards ring hollow. The opacity of the system they set up was intentional and necessary, not an accident or mere coincidence. There is nothing moral about this. It is all about theft and nothing more.

Claims that capitalism and business are just amoral and morality is irrelevant are completely false. There is no defense for that argument in view of the facts and the logical conclusions they lead to.

The amounts of money involved are both staggering and destabilizing. What should go into public interest spending and civilization-building go instead into bank accounts of kleptocrats and their enablers, including state governments, lawyers and the real estate industry. All kleptocrats and their enablers work very hard to hide as much of their immoral sleaze as possible, preferably all of it. If they had their way, kleptocracy would be fully legal.

The amounts of money are so great that for the enablers, they believe their own BS about their high morals.

One of history’s greatest heists is still ongoing: The scope of the theft was staggering: “In the dying days of the U.S.S.R., Palmer had watched as his old adversaries in Soviet intelligence shoveled billions from the state treasury into private accounts across Europe and the U.S. It was one of history’s greatest heists. . . . . By one estimate, more than $1 trillion now exits the world’s developing countries each year in the forms of laundered money and evaded taxes.”

An existential threat?: From time to time, B&B raises the idea that international corruption could constitute an existential threat to civilization, and maybe even the human species. Occasional articles like this reinforce that possibility. Denials by kleptocrats, including President Trump, are neither plausible nor persuasive.

The question is this: Is there still enough political honesty, will and power to turn the tide of corruption back, or is it too late, especially in view of the pro-kleptocrat, anti-rule of law Trump backed by congressional republicans?

BB orig: 2/10/19

Author: Rob Smith

This thread is not intended to argue against the value of more objectively based political decision making.Rather it assumes the positive value of such in terms of increased likelihood of progressing towards humanist goals.

I'm seeking to explore how far objectively based political decision can go and what it looks like when we get near one edge of "objectively based". I'm doing this in part because of the many examples I see of people over-estimating the lengths to which a particular approach can be effectively applied. (See D:Religion for examples of atheism and belief in scientific knowledge being pushed far beyond the reasonable boundaries.)

The issue I'm using is how we make decisions about which humanist value we prioritize when there are competing values.

Here is an article that draws attention to possible problems that can arise if we say, prioritize "happiness" over "desire". "Opinion: My New Vagina Won’t Make Me Happy"

The author makes a strong case for these being different things. Even opposed things in her case.

How do others here see such a contradiction being resolved using "more objectively based" political decision making approaches? Do others see any tension existing?

 B&B orig: 2/15/19

How to Rationalize, and Make More Moral, Service to the Public Interest

Intolerance is almost inevitably accompanied by a natural and true inability to comprehend or make allowance for opposite points of view. . . . We find here with significant uniformity what one psychologist has called ‘logic-proof compartments.’ The logic-proof compartment has always been with us. Master propagandist Edward Bernays, Crystallizing Public Opinion, 1923

We do moral reasoning not to reconstruct why we ourselves came to a judgment; we reason to find the best possible reasons why somebody else ought to join us in our judgment. Psychologist Johnathan Haidt, The Righteous Mind: Why Good People are Divided by Politics and Religion, 2012

We found ourselves at the end of chapter 3 with a dystopian assessment of democracy, an apparent ill-suited match between the mental apparatus of the public and the high-minded requirements of democracy: People should be well informed about politically important matters, but they are not. People should think rationally, but they most often do not. Political psychologist George Marcus, Political Psychology: Neuroscience, Genetics, and Politics, 2013

Instrumental or practical rationality or reasoning: a belief about human reasoning where decisions, beliefs and behaviors are not influenced by psychological factors such as morals, values, ethics, ideology or identity; the only concern instrumental reasoning focuses on is what actions are needed to best reach the end an individual wants to achieve, regardless of good, bad or ambiguous impacts of the end on other people, groups of people and/or the entire society; desires and goals are not questioned as moral, immoral, rational or irrational, they just exist as givens

Values or ethical rationality or reasoning: a belief about human reasoning where decisions, beliefs and behaviors are influenced by psychological factors such as morals, values, ethics, ideology or identity, with the main concern of values reasoning being what ethics or values the end or goal represents to the individual for her-himself, other people, groups of people and/or the entire society;

Hybrid rationality or reasoning: a belief that political reasoning is influenced by an unknowable but variable combination of instrumental and values reasoning in arriving at decisions, beliefs and behaviors; for decisions, beliefs and behaviors that are relatively ethical- or values-neutral for the individual, instrumental reasoning is the only or dominant form of reasoning employed; for decisions, beliefs and behaviors that are non-trivially infused with ethical or value concerns for the individual, values reasoning is the only or dominant form of reasoning employed; most political decisions, beliefs and behaviors probably mostly arise from significantly mixed instrumental and values reasoning, but with values reasoning usually dominant and usually influenced by psychological, cognitive and social forces including biases and social institutions

How moral can politics be?: That mostly depends on what factors such as ideologies, beliefs, morals and tribes or groups a person believes in or identifies with. Many American conservatives and populists see liberals and socialists as being significantly immoral. The converse seems to be also true. Talking about what ideology is the most moral or ethical in the endless left vs right dispute is unresolvable. From an objective, neutral point of view, the debate is poisoned to the point of unresolvability by unwarranted disconnects from (a) reality, facts and truths, and (b) sound logic. Does that constitute a basis to argue that existing ideologies are significantly or mostly immoral because, e.g., they get in the way of compromise, thereby making civilization less efficient and less civil?

This discussion argues that the anti-bias ideology advocated here is more objective than existing ideologies and that makes it as moral as a political ideology can be without being just toothless or meaningless theory. A premise is that due to the nature of human reasoning, sentience and cognition, disputes in liberal democratic politics, but not authoritarian politics, can never be resolved with purely subjective or objective perfection. That also applies to anti-bias, which is not posited as perfect, but just better.

Another premise is that hybrid reasoning is valid based on modern neuroscience, and cognitive and social science research. Modern science strongly supports a conception of reasoning that most people mostly apply to most political issues as being heavily influenced by psychological factors including personal morals (or ethics or values), personal ideologies, group and tribal identities, personal identity, tolerance for dissonance or difference of opinions, and so forth. Most political reasoning arises from uncontrollable, unconscious perceptions of reality, facts and truths, true, false or otherwise, and uncontrollable, unconscious reasoning and decision-making. Those factors can lead to decisions, beliefs and behaviors that are objectively good, bad or ambiguous for the individual, while independently being bad, ambiguous or good for society.

The anti-bias ideology comprises four highest political morals, fidelity to seeing less biased reality, facts and truths, commitment to applying less biased logic to the reality, facts and truths, applying those in service to the public interest and reasonable compromise in view of relevant political, social and economic-environmental concerns. How objective those morals are look like this:

Most objective → less biased reality, facts and truths > reasonable compromise ≥ less biased logic > service to the public interest ← Least objective

Near-universal moral beliefs: At this point, the following objective facts about most people’s beliefs about politics need to be kept in mind. Most people claim that in addition to their ideology, morals, beliefs and tribe identities, their brand of politics and policy choices:
(1) mostly or completely based on unbiased reality, facts and truths;
(2) mostly or completely based on irrefutable or sound logic or reasoning;
(3) best serve the public interest;
(4) are open to reasonable compromise (this moral is in decline, which is an indicator of the rise of American anti-democratic authoritarian politics); and when asked
(5) are merits-based by claiming their morals, ideologies and beliefs win any contest in an honest competition of ideas.

All five of those are things that most people believe in. That therefore strongly implies (1) those five traits constitute some sort of nearly universal values or morals, and (2) those values or morals are independent of underlying personal ideology, other morals, beliefs, tribe identities, etc. In essence, those five beliefs, except for compromise, are the only things in politics that unite most deeply divided Americans (about 95% of adults?) probably about 95% of the time.

Service to the public interest: This moral concept is mostly subjective. Other than some kind of compromise, disputes about it are not solvable short of coercion or overt violence. Evidence and pure logic alone cannot resolve disagreements. People almost always define the public interest as (i) in accord with their own ideology, morals, beliefs, group and tribe identities, (ii) based on unbiased reality, facts and truths, (iii) based on irrefutable or sound logic or reasoning, and (iv) sometimes reasonable compromise.

That is generally the public interest concept for most adults and nearly all ideologues. In over 10 years of online dialog and exposure to over 40 years of print and broadcast media content, this observer cannot recall anyone who engages in political debate and claims (1) they rely on distorted reality, lies, false facts, false truths, or ignorance, (2) that their reasoning is flawed or partisan nonsense, (3) that what they want isn’t good for America and by implication the public interest, or assuming the question is asked, (4) that their beliefs and policy choices would lose in an honest competition of ideas. Almost no one claims any of those things about their political beliefs and policy preferences. Many routinely allege one or more of those things against the political opposition, but none of it ever applies to themselves.

In addition to those intractable problems, the concept of service to the public interest is necessarily heavily infused with essentially contested concepts. An essentially contested concept is one where there is widespread general agreement about the concept, e.g., fairness or constitutional, but not on the best definition or realization of it, e.g., by political policy. The practical use of these concepts involves endless, unresolvable disputes about their proper definitions or uses. These disputes cannot be settled by citing empirical evidence or applying sound logic. Only compromise, coercion or physical force can resolve them. Concepts such as the public interest, fairness, equality, legal, state of emergency, constitutional, patriotic, corrupt, honest, incompetent, democratic, and authoritarian are all unresolvable.

If one accepts all of the foregoing assertions of facts, reasoning and political reality as more true than false, then is it true that there is no possible way to even partially rationalize and moralize politics compared to what it is today?

How partially rationalize and moralize the public interest concept: There is a way to partially rationalize and maximally moralize the public interest concept. That way is to ask people to adopt the anti-bias ideology and its morals. That does not demand that people abandon their existing ideologies, morals and beliefs. For most people, existing ideologies and morals include the five factors stated above, facts, logic, public interest, compromise and merit-based competition of ideas. In essence, anti-bias simply asks people to have the moral courage to try to live up to what most claim they already believe in. Put another way, it asks for people to take their own professed universal moral political values seriously, instead of simply accepting it when own side employs lies, unwarranted emotional manipulation and other dark free speech tactics to convince them of their correctness.

In theory, this is simple, just be less biased and less partisan, while being more objective and open-minded about unbiased facts, sound reason, the public interest and compromise. That is the moral, more rational way to do politics. In practice, it may be impossible to move very far in that moral direction in view of existing laws, social norms and tribalism that protect lies and other forms of dark free speech. From the anti-bias point of view, the current, irrational way of doing politics is the immoral way.

The service to the public interest concept can be articulated many ways. But what is the best way to articulate it if the moral goal is to maximize rationality, efficiency, personal freedom, sustainability, liberal democracy, a vibrant economy and society, reliance on less biased facts and logic, and other major moral concerns despite all the unresolvable moral conflicts inherent in all of that? The best answer is this: Make ideas compete in a transparent, merit- and evidence-based competition, where the rules require the debate to adhere to what people already claim they believe in, namely unbiased facts, unbiased logic, what is best for the public interest, and reasonable compromise.

What would such an articulation look like? It would explicitly invoke the main concepts that most people believe are in the public interest, despite unresolvable differences about what those concepts look like. One articulation is this:

The conduct of politics and governance based on identifying a rational, optimum balance between serving public, individual and commercial interests based on a transparent fact- and logic-based analysis of competing policy choices (evidence- and reason-based politics), while
(1) being reasonably responsive to public opinion,
(2) protecting and growing the American economy,
(3) fostering individual economic and personal growth opportunity,
(4) defending constitutional personal freedoms,
(5) fostering improvement in the American standard of living,
(6) protecting national security,
(7) protecting the environment,
(8) increasing transparency, competition and efficiency in government and commerce when possible,
(9) fostering global peace, stability and prosperity whenever reasonably possible, including maintaining and growing alliances with non-authoritarian democratic nations, and
(10) defending American liberal democracy and democratic norms, by replacing federal norms with laws, and (a) requiring states to maximize voter participation, making voting as easy as reasonably possible, (b) elevating opinions of ethics officials in the federal government to the status of laws or requirements that bind all members of all branches of the federal government, particularly including the President and all Executive Branch employees, (c) incentivizing voter participation by conferring a tax break on voters and a reasonable tax penalty on qualified citizens who do not vote, (d) prevent or limit corruption, unwarranted opacity, and anti-democratic actions such as gerrymandering voting districts to minimize competition or limiting voter participation, and (e) requiring allowing high level federal politicians and bureaucrats, federal judges and members of congress to show their tax returns for at least the six tax years before they take office or starting federal employment or service, all of which is constrained by (i) honest, reality-based fiscal sustainability that limits the scope and size of government and regulation to no more or no less than what is deemed needed and (ii) genuine respect for the U.S. constitution and the rule of law with a particular concern for limiting unwarranted legal complexity and ambiguity to limit opportunities to subvert the constitution and the law.

Some important concerns are not explicit, but instead they are inherent. For example, defending equal protection, freedom of religion and gun ownership is inherent in defending constitutional personal freedoms. This conception is an attempt to shift the balance of power from wealthy individuals, special interests and the two main political parties, where it is unreasonably concentrated now, to be more favorable to the public interest and public opinion.

This conception of service to the public interest better accounts for social change by making public opinion an explicit factor in policy debates, unlike the current situation where public opinion is usually irrelevant. Most anti-government conservatives and populists will not like public opinion as a factor in governance. If so, anti-bias dictates that they must be transparent and honest about it and publicly state that they reject public opinion as a relevant guide to policy debates. Given the significant authoritarian, anti-democratic leaning of most conservatives and populists, it is very unlikely that the anti-authoritarian, pro-democratic anti-bias ideology would be acceptable to most of those people.

Obviously, that articulation will be criticized for various reasons. It is shot through with essentially contested concepts. One can argue that concerns such as protecting and growing the American economy are unsustainable and can be at odds with others such as protecting the environment. In response, it is clear that such conflicts are unavoidable. There are unavoidable internal conflicts and the way that conception of service to the public interest deals with conflicting goals is to focus on “identifying a rational, optimum balance” among competing interests. There is no other means available to resolve unresolvable disagreements short of authoritarian coercion.

The point of the ideology is to make it harder to do politics based on opacity, lies and partisan or fake logic. Those things are invariably used by powerful special interests, bad leaders, e.g., Donald Trump, and ideologues to win arguments. The point is to make politics perform the best it can within the limits of what humans can be expected to tolerate. In essence, anti-bias is a morals-, merit-, evidence- and reason-based ideology instead of an ideology that imposes visions of what the world and people should look like and believe rather than what they are.

What about bad morals and behaviors?: Some Americans hold what others would describe as bad morals, e.g., bigotry, racism support for abortion, or tolerance for conflicts of interest in politicians. Nothing can be done under anti-bias to physically coerce people into having only good or neutral morals, which is a contested concept. Some of this reflects conflicting social norms with their acceptable or unacceptable behaviors. At present, morals or beliefs such as acceptance of racism, dark free speech (lies, deceit, etc.), corruption, or anti-democratic authoritarianism, lead to intractable disagreements and there is no way to change that.

Could the anti-bias ideology and the public interest concept as articulated here be made more moral, e.g., by explicitly fostering values reasoning? Maybe. But how one might do that is not clear to this observer. The hybrid reasoning described above is a postulated mode of rationality that may not actually exist. It is proposed here based only on this observer’s (i) experiences and assessment of how people think about politics, and (ii) understanding of the neuroscience, cognitive science and social science of human reasoning and behavior. Political reasoning seems to be an intractable entanglement of emotion, morals, ideology, reason (roughly logic), self-identity, etc., all of which is constantly reacting in real time to sensory inputs that are usually complex. On top of that complexity, the influence of nature (genes) and nurture (family, society, ideology, life experience, morals, etc.) probably varies significantly from person to person. One expert, John Hibbing, author of Predisposed: Liberals, Conservatives, and the Biology of Political Differences, recently tentatively estimated that we are about 30-35% nature and 65-70% nurture.

How humans think about morals and politics is simply not yet understood. Thus, it is hard or impossible to know how to make the ideology both more rational and more moral. The anti-bias mindset envisions that being rational, whatever that means, is in itself a high moral value. More of it should be better, but that needs to be tested and demonstrated on a mass scale. The limited laboratory testing this observer is aware of suggests more rationality is better, at least for predicting future events, the apparent acid test for the rationality of any political ideology.

B&B orig: 2/18/19

The Cohen Hearing: Partisan Hate & Plausible Deniability

If it weren't for tape recordings proving his criminal conduct, President Nixon would not have resigned or been impeached

Different observers had different take home messages from the Michael Cohen hearing. Two things struck this observer.

Partisan hate: The first is the open, partisan hate and distrust. For practical purposes, the two sides hold completely incompatible visions of reality. In response to relentless republican accusations of Cohen being a liar, democrat points out all the lies, indictments, guilty pleas and convictions surrounding President Trump as a basis for concern. Jim Jordan, a far right Tea Party extremist, contemptuously retorts with a list of awful people and things he implies is due to bad, bad democrats. His list included, as always, Hillary, FBI employees fired for lying and other matters of legitimate concern, but mostly falling short of illegal activities.

Jordan and the republicans expressed essentially no concern about the unending sleaze and proven crimes surrounding Trump and his associates. Instead, their wrath is focused on bad people who have lost their jobs with no convictions, guilty pleas or even indictments so far.

In terms of compromise on any of this, prospects look dim at best. Maybe House democrats should agree to look at some of the most serious of the republican allegations as a show of good will and professional even-handedness. That won't change the attitudes of any congressional republicans about anything, but it just might win democrats some independent votes in 2020. There is no chance of republican willingness to compromise anything, so maybe the ball is in the democrats court on this point.

Plausible deniability: What was most striking to this observer was Cohen's testimony that he routinely spoke in code with Trump. There is a reason for this. By speaking in code, Trump can claim he never directly told Cohen to do anything sleazy or illegal. That might wind up being mostly true. Everything is alluded to and that creates ambiguity and thus some doubt for prosecutors, judges, and especially, jurors. In terms of federal criminal prosecutions, all that is needed for a criminal to stay out of jail is to create just enough doubt with just one juror on the jury. That is how easy it is for criminals to escape punishment for committing federal crimes.

The same is generally true in all states except Louisiana and Oregon, where conviction requires only 10 of 12 jurors. There, doubt needs to be created for at least three jurors for an accused criminal to escape punishment for committing state crimes.

If Trump is to be held accountable for his state or federal crimes, it will probably have to come from written evidence that cannot be impeached. In any court case, Trump's attorneys will do to witnesses who testify against Trump exactly what congressional republicans did to Michael Cohen. Trump's attacks will be just that vicious and just that unconcerned with truth.

B&B orig: 3/1/19

Wealth Distribution

In a series of articles, the May 27 issue of Bloomberg Businessweek does a deep dive into US wealth distribution. Bloomberg includes data and analyses by economist Gabriel Zucman, the world's foremost expert on finding where wealthy people hide their assets. Some of his data is published in The Quarterly Journal of Economics. According to Bloomberg, Zucman's paper "distilled a century of data to answer one of modern capitalism’s murkiest mysteries: How rich are the rich in the world’s wealthiest nation?" A few points summarize the situation.

Tax evasion: Tax evasion is the illegal non-payment of taxes owed. Tax avoidance is use of legal means to reduce taxes, e.g., by finding or creating loopholes. Zucman's paper comments: "Lastly, we attempt to account for tax evasion. US financial institutions automatically report to the IRS the dividends, interest, and capital gains earned by their clients, making tax evasion through US banks virtually impossible. But absent similar reporting from foreign institutions, taxpayers can evade taxes by holding wealth through foreign banks. Zucman (2013 and 2014) estimates that about 4% of US household net financial wealth (i.e., about 2% of total US wealth) was held in offshore tax havens in 2013. There is evidence that the bulk of the income generated by offshore assets up to 2013 was not reported to the IRS. Furthermore, the share of wealth held offshore has considerably increased since the 1970s. . . . . To obtain reliable top wealth shares, accurately measuring the distribution of equities and fixed income claims—which constitute the bulk of large fortunes—is key."

According to Zucman, wealthy Americans held about $7.6 trillion in offshore accounts. The amount of tax cheating that generates each year is unclear. Wealthy people who cheat on their taxes operate in as much secrecy as possible to hide their crime.

Wealth distribution: Until the late 1930 s the top 1% held about 35-40% of US wealth. That dropped to about 25-50% until the late 1970's. After that the proportion of wealth increased to about 40%.

Data for 2014 indicates that the bottom 30% of Americans have a net negative worth. They own more than their assets are worth.

US wealth inequality is close to that generated by the Russian kleptocracy.

Politics: Bloomberg writes: "Their data became the heart of Vermont Senator Bernie Sanders’s stump speech, recited to the outrage of his supporters during the 2016 Democratic presidential primary. . . . . Before Massachusetts Senator Elizabeth Warren started her 2020 presidential campaign by proposing a wealth tax, she consulted the pair, who estimated that her tax would bring in $2.8 trillion over the next decade. She conferred with them again before floating a corporate tax on profits above $100 million, which they calculated would raise more than $1 trillion over 10 years. Sanders came looking for their advice on his estate tax plan, which would establish rates as high as 77% on billionaires. And when New York Representative Alexandria Ocasio-Cortez proposed on 60 Minutes to hike the top marginal tax rate to as much as 70% on income above $10 million, Zucman and Saez were fast out with a New York Times op-ed in support."

The key question: Not surprisingly, there is a bitterly contested assumption. Bloomberg writes:

The tools Zucman has identified to date challenge a series of assumptions, fiercely held by many economists and policymakers, about how the world works: That unfettered globalization is a win-win proposition. That low taxes stimulate growth. That billionaires, and the superprofitable companies they found, are proof capitalism works. For Zucman, the evidence suggests otherwise. And without taking action, he argues, we risk an economic and political backlash far more destabilizing than the financial crisis that sparked his work.

Bloomberg comments that Zucman and his co-worker Emmanuel Saez have written a "cookbook of sorts for any 2020 candidate looking to soak the rich. The Triumph of Injustice, to be published by W.W. Norton & Co. early next year, focuses on how wealth disparity can be fought with tax policy." Zucman argues that the actual effect of lower taxes on the rich, isn’t to stimulate the economy but to further enrich the rich and further incentivize greed.

Obviously, anti-tax ideologues including most pro-Trump populists, libertarians, republicans and nearly all wealthy people will vehemently disagree and argue that increasing taxes on them will kill their incentive to work and cause economic growth to stall and maybe create a serious global recession or depression. Is the anti-tax argument persuasive?

It appears that at times when income taxes were well over 50% in the 1900s, Americans still innovated, worked hard and did not hesitate to become wealthy. Do increased tax rates necessarily kill incentive to innovate and work hard in all motivated people? This is a point that deserves its own discussion. It goes to the heart of this dispute, which appears to be one of a few central issues in modern American politics. It is an issue that requires looking at unbiased data on what various tax rates actually do to innovation and work ethic. Maybe Zucman's book will go into that critically important issue.

Final thoughts - policy proposals: Bloomberg writes:

In recent months, Zucman has devoted a great deal of energy to the question of how multinational corporations avoid taxes. He’s produced papers and policy briefs showing that U.S. multinationals shift almost half of their overseas profits to five havens—Ireland, the Netherlands, Singapore, Switzerland, and the Greater Caribbean, which includes Bermuda. “That is a huge problem for the sustainability of globalization,” he says. Countries and territories are engaged in a race to the bottom, Zucman argues, offering ever-lower corporate rates in the fear that companies will shift their profits elsewhere. He proposes to “annihilate” such competition by apportioning profits based on where sales were made.

These ideas might be nonstarters today, but Zucman professes to take the long view. Remember, he points out, that the U.S. Supreme Court ruled the income tax unconstitutional in 1895; it took a constitutional amendment to legalize it in 1913. “There’s a lot of policy innovation ahead of us,” he says.

When Zucman and Saez’s site, wealthtaxsimulator.org, went live in March, it sparked some of that hoped-for innovation. One proposal, posted on Twitter by Adam Bonica, a political science professor at Stanford, was for a 100% tax on wealth beyond $500 million. He based it on what he called “Beyoncé’s rule,” which he explains as, “Think of the most talented and hardest-working person you know, and think about how much money they have and how much money they deserve.” Queen Bey, he tweeted, has an estimated net worth in the neighborhood of half a billion dollars. “Let’s have Howard Schultz explain to us why he should be worth more than Beyoncé.”

With any luck, talk about increasing taxes to help reduce wealth inequality will help open the Overton window and make this line of thinking more publicly acceptable. At the very least, data, not naked, self-serving anti-tax arguments should be relied on to inform the situation and help guide policy.

B&B orig: 6/23/19

Anthropogenic Global Warming: What the Oil Companies Think

“Well actually the Genesis 8:22 that I use in there is that ‘as long as the earth remains there will be seed time and harvest, cold and heat, winter and summer, day and night,’ my point is, God’s still up there. The arrogance of people to think that we, human beings, would be able to change what He is doing in the climate is to me outrageous.” Senator (R-OK) Jim Inhofe commenting on anthropogenic climate change

Undark, a self-professed truth and science-oriented site, writes about a lawsuit that Oakland filed against BP, Shell, ExxonMobil, Chevron, and ConocoPhillips. Oakland was suing oil companies to recover the costs of building sea walls and other infrastructure to protect residents from global warming. San Francisco joined the lawsuit in in 2017.

In 2108, federal district judge William Alsup ordered a tutorial on climate change. The cities presented experts who walked the judge through recent data and the historical record: “The cities called on a number of expert witnesses, including Myles Allen, a professor of geosystem science at the University of Oxford. By walking the judge through the century-long history of climate science, punctuated with rapidly ascending line graphs, the witnesses brought global warming to the court’s attention in a way that left no doubt about how credible a threat it was.”

Two things were extremely interesting and telling. The first is the defense the oil companies mounted to protect themselves from liability: “Chevron’s evidence during the tutorial was presented through a lawyer, who acknowledged the role of human activity in climate change but denied the company could have known the future implications of its actions and said a court wasn’t the right place to deal with the issue. Statements submitted by the other defendants were largely in line with Chevron’s presentation.”

In other words, oil companies are no longer denying that anthropogenic (human-caused) global warming is real. Instead, they argue no legal responsibility because no one could have foreseen things like sea level rise. The foreseeability concept in law is often a powerful defense, so the oil company argument has a chance of winning on appeal or at the Supreme Court. This case will probably wind up at the Supreme Court.

The second thing was how the oil companies reacted to briefs filed by the oil industry-funded Heartland Institute. Heartland is a well-known climate science denier think tank. Undark writes:

Filed alongside the case were two amicus briefs — documents produced by someone who is not a direct party in a case, but has an interest in the subject at hand — questioning aspects of climate science. They were written by well-known climate skeptics and promoted by the Heartland Institute, a libertarian organization with links to the fossil fuel industry. Alsup challenged the briefs’ validity and asked who had funded the research behind them, which turned out to include fossil fuel firms such as Peabody and ExxonMobil.

In the end, [defense expert] Allen said, the defense chose not to call on those climate skeptics when presenting its formal evidence in court, a sign of how much progress has been made in climate science and public understanding over the past decade. “Maybe 10 years ago they would have been called, but I think it’s recognized now that it’s become so discredited that it’s not worth putting them up,” said Allen.

“I think the real reason you don’t see the basic science challenged much in these cases is that courts are places of inquiry where the standards of reliability are reason and evidence rather than tweets, falsehoods, and the kind of manipulative discourse that you hear in the political sphere,” said Douglas Kysar, the deputy dean of Yale Law School.

Apparently the oil companies do not believe their own propaganda sources enough to present their own climate science denials in court to defend themselves.

The cities lose despite winning: Despite the credibility of the evidence, the judge dismissed the case. He ruled “that while the evidence of climate change is real and persuasive, the courts are not the proper place to decide issues of such global magnitude, deferring the matter to the legislative and executive branches.”

This appears to indicate that federal courts see anthropogenic global warming as something too big for them to deal with. At present, the legislative and executive branches are in no mood to deal with climate change. This is so at least because (1) republicans do not believe climate change is real or something humans can do anything about, and /or (2) they are corrupted by (a) corporate campaign contributions that oppose taking any action, and/or (b) blinding anti-government, anti-climate science ideology that prevents them from seeing the massive reality in front of their climate science-blind eyes.

Once again and for whatever reasons, the ravages of unregulated capitalism are left to run free and wild, damage to society and the environment be damned.

B&B orig: 6/23/19