Why Flatten the Curve?

Again, I'm no Trump fan. Pence needs to remove him and, until then, the White House Press Corps need to not ask him gotcha questions.

Flattening the curve makes sense as part of triage, which is how to deal with a medical crisis.

Some people will die, regardless of whether the curve is flattened or not. Their immune systems are badly compromised because they are never allowed to encounter germs). A flat curve means they die in the second wave. Putting them in vents prolongs their agony.

On the other side are younger people who will most likely get sick or not get sick but will develop immunity. Healthcare workers in this age group should get tested for immunity so that they don't need PPE. They are the people who can safely treat the vulnerable.

The curve must be flattened to make sure that those in the middle who get extremely sick can get treated when that happens. If the severe (not total) infection rate is low enough to not overwhelm medical resources, curve flattening is not necessary. Until we know that this is the case, continued social distance is essential.

Taxing Absolute Income or Wealth

This is part 4 of a three part trilogy in supply side economics. In part one, I explained all if the ways Government Spending becomes GDP.  In part two, I discussed the creation of money and it's functions in secondary markets and how this impacts the working class. In part three, I laid out a definition of absolute income in the macro-economy: GDP + unrealized income. I explained how the elements of the  latter, that it can be estimated and why it does not really exist.

Of course, anything that can be valued can be taxed. Indeed, it may even be easier to tax than capital gains, which largely rely in self reporting.

Either total wealth and growth in wealth can be taxed in the micro level.

As I wrote yesterday,

Unrealized income =
the net unrealized gain on traded equity and securitized assets held for less than a year
+ the unrealized net gain on assets held for more than a year
+ additions to retained earnings for the year that are attributable to shareholders or partners if it were to be distributed
 + increased value in a year of physical assets less their distribution expense.
All if the above include increased asset values and undistributed earnings for assets held offshore.

All if these amounts can be estimated by the entities owned as of December 31st of each year. Any overlap between stock price and retained earnings can be taken into account. Indeed, reporting this would be beneficial to investors. This is the easy part.

The hard part is generating the liquidity to pay the tax. Actually, this is not hard at all. It merely requires the entity owned to write a check. If course, you could not tax corporate income and the investor's share of it twice. 

Likewise, if wealth were to be taxed, it is easier to tax the total value of the entity rather than taxing its owners. It is much less work. 

Progressivity may or may not be a concern, largely because stock ownership is largely confined to the upper middle class (although they have the votes to block it) and the wealthy (who have the money to do so). Investor information would be given to the IRS so that firms may get a refund on taxes paid on behalf of the non-wealthy. The IRS must do the reconciliation to preserve investor privacy.

Who really shoulders the burden is a more serious concern. Because of the monopsonist nature of most employment and the monopolist nature of most goods, the wealthy will not pay it. 

First, stock prices will go down to reduce burden.

Second, wages will go down.

Third, consumer prices will go up.

Firms have people who run the numbers and a duty to maximize shareholder value. Indeed, internal rents will increase because the labor to make such calculations will be taken from the labor surplus generated from extraction, production, distribution and enabling work.

As I have said before, the rich need to want to pay more so as to reduce the contingent income tax obligations on their children. The best tool to do so is to introduce a tax prepayment bond and an Asset VAT with incentives to sell to qualified ESOPs (including COOPs with one voting and multiple preferred shares, distributed on an equal dollar basis each financial period).

Absolute Income - the Supply Side

This is part three in a discussion of the impact of tax cuts on the economy. It is based on a discussion at a cast party 25 years ago. The demand side is largely explained as a consequence of government action and the Main Street economy. This essay is about the other side.

Income is considered to be the return on assets, including sold labor. As we have seen previously, this includes the return on taxation of assets. The challenge for public policy is providing for adequate income and assets for all households so that no worker can be considered someone else's property. How badly we have failed at this is impossible to see until we look clearly at the elements of the "supply side."

Absolute Income is adjusted gross income plus unrealized income. Wealth taxes are an attempt to go after part two, in its stored form, on an annual basis. They will never pass because, if done correctly, the wealth will be destroyed. For some, that is likely the goal. If it is done ineffectively (by self reporting or creating loopholes) it legitimates assets which have no inherent value.

In the macro-economy, absolute income is gross national product plus stored future income plus speculative income. Current economic discourse and statistics do not, and likely cannot, capture the difference between the last two, although looking at income class helps.

This inability to separate future spending from speculation does not mean we cannot quantify unrealized income. Doing so shows why taxing wealth and unrealized income are close to impossible. Here is a hint: it does not really exist. Once that secret is out, capitalism' s days are numbered.

Unrealized income =
the net unrealized gain on traded equity and securitized assets held for less than a year
+ the unrealized net gain on assets held for more than a year
+ additions to retained earnings for the year that are attributable to shareholders or partners if it were to be distributed
 + increased value in a year of physical assets less their distribution expense.
All if the above include increased asset values and undistributed earnings for assets held offshore.

Asset prices and retained income and asset book values can be valued and are related but are not mutually exclusive. Asset prices may or may not reflect retained earnings and physical or market value of real assets and may, in fact, be junk assets based on fraud.

Bonds have the same features and are valuable based on currently expected future income - including whether tax income attributable from holding these bonds can ever be collected.

All value is market based. These values may or may not relate to the productive power of the underlying physical and human assets. Indeed, mass resignations and innovations may turn today's intellectual property into dust. This is why capitalism is a less than perfect driver of real innovation.

Income inequality and hierarchical control are designed to protect  against sudden devaluations in both private and state capitalism. Individual and cooperative socialist organizations (from communes to partnerships) always threaten intellectual property held by capitalists.

The value of the "supply side" is based on common perception, not in reality. Tax cuts and central bank liquidity are monopoly money until distributed into the real economy.

When such instruments are sold into retirement accounts, essentially turning stored labor of workers into monopoly money while the "supply side" trades it into new speculative instruments or the purchase of luxury goods, then the system collapses.

When mortgage debt is securitized and leveraged into monopoly money for speculation, the economy is heading for collapse. (It always seems to be housing debt).

When tax cuts become the initial capital for such speculation and to create "unrealized income," that is, mostly, then it is not good for society.  Trying to tax the unreal wealth in the speculation sector simply puts lipstick on a pig.

Taxing the return on all realized income at higher rates destroys the incentive and the ability to create the junk. Ironically, taxes based in realized value also make bonds based on such taxes more valuable. Taxing ephemeral wealth reduces the value of the same bonds. The best bond is a tax prepayment bond because everyone knows that in the end, it has no value.

Absolute Income - Money and Class

This is part two in a discussion of the roll of tax cuts in the economy.

Conservative economists, the uninformed (that is most of) the popular media and a sad proportion of mainstream and even radical economists (even Marxists) put all investment in the same pot and count savings by the working, middle and upper class in the same pot as well. They also show concern for list economic activity due to tax increases. Economic cycles and crises are seen through the lens of consumption. Marx had no idea how wrong he was. Neither did Keynes. Hayek may have had hints, but if he did, he was not honest about them. This brings us to a small detour to monetary policy.

The Federal Reserve creates liquidity, aka money, based on government bond holdings in member banks and manipulating how much can be leveraged from those holdings. It also trades currency and buys junk bonds to stabilize liquidity. It does not, however, write down loan balances when it does so, which would cancel the money). Government borrowing (federal, state, educational and municipal) provides safe assets to backstop retirement accounts and mutual fund speculation.

All asset valuation is considered equally in official statistics and common usage. If Wall Street assets recover, depressed working class asset destruction goes uncounted, even though depressed prices (especially underwater loans) for such assets should be the operative definition of an economic depression. Hyperinflation is the opposite. It is when money is so devalued that you cannot afford bread, but could write a check for your mortgage. Sadly, most borrowers buy the bread first because they are hungry. Maybe preppers have the right idea. Holding gold, however, is not one of them.

You cannot eat gold. Eating through having gold only works if you are willing to trade it for something. In hyperinflation, where the supply of goods and services declines as the supply of money rises, gold buys less too. Goods and services, asset values and income dynamics must work in harmony.

Money is is not only a medium to exchange goods. It is also a decision tool to exchange power. Power is the ability to demand resources and labor. Capitalism seeks to consolidate this power into the hands of the owners of capital. Socialism seeks to distribute this power to society, using common action to do so. State capitalism and state socialism are the same thing, with modern mixed economiess consisting of private capitalism and social democracy. Cooperatives do combined action with neither governments or capitalists. Their exchanges are essentially labor based on a smaller scale.

The essential fact in any system that uses money is that money buys work from people. Since work is a function of time, as our lives, money essentially buys people.

Another way to look at money and savings  is through class analysis. Savings is the power to make others work without working yourself. When realized, savings purchase essentials and luxuries. Of course, even poor people deserve some level of luxury. In an unbalanced economy, the working class do not even receive the essentials.

Scarcity in essential goods is the incentive used to compel work. Inadequate income is used to compel work on a consistent basis. The argument against guaranteed income is that if work can be compelled, hyperinflation and shortages result. If toilet paper is unavailable, we are in a condition of scarcity. This is why I call SARS-2, the new official name of COVID-19, the Cornholio Virus.

Income tax data can help draw the lines between classes. Economic data show that purchasing power is in consistent decline for the bottom 90% of households. These include the poor who depend on transfers, the lucky poor who spend down assets as well and the working class. The middle class get more purchasing power from work each year and include the next nine percent. They are not wealthy because they must still work. They still experience scarcity and save for future income only. The top one percent do not work. They consider themselves the supply side.

Absolute Income - the Government Side

Back in my community theater/drinking days (I know I am being redundant), I was having a high octane discussion at the strike party with the boyfriend of one of the stage crew. We were discussing the utility of tax cuts, or the lack thereof. I told him that we could never do so with a GDP measure. GDP is based on productive activity in the real economy: government purchases, household consumption, net exports and investment in plant and equipment. He would need a different measure. We left it at that.

As an aside, government's impact comes in more than just buying stuff. It is a major contributor to household consumption through other and including the stuff it buys. It buys or creates natural resources (food, oil, land, and water), supplies, buildings, military assets, health care (military, civil service, old age, disabled, Indian, international, indigent), transportation infrastructure roads, airports, bridges, spaceports, and private capital used to make government purchases.

It also distributes current and future household income via employee salaries, military pay, government pensions, old age, survivors and disability income, interest on government trust funds, contractor pay and benefits, Temporary Assistance to needy Families, Food Stamps, supplemental security income, temporary disability income, refundable income and child credits, pays net interest to bond holders, and distribution of resource payments to tribal nations (land rentals and resource extraction). This amounts to more than half of household income resulting in consumption and savings.

Consumption from these income streams also creates private sector income, leading to consumption and savings (second and third order - which is private sector spending and savings resulting from private sector consumption). All of this leads to investment in land, plant and equipment for household consumption and exports.

Tax collections and double counting are the means by which all if this spending goes round and round. The double and triple counting is what is known as the multiplier effect.

There is one last chunk created through tax expenditures: preferred tax treatment of capital income and investment and cuts in expected salary taxes. This added liquidity is not small. It is what was being discussed at that cast party.

All that prefaces the answer to that question: what do tax cuts do for the economy? The question, which I think we also brought up at the party, is essentially the same: how do to measure the supply side? Let's talk, but you may not like the answer.

Beating SARS 2

The best way to beat SARS-2 is to get sick and survive. The only way to do that is to have a functional immune system. Infants and toddlers to this by getting colds. Their parents get the new ones. Being around kids or their parents while they are sick passes on these diseases and keeps immunity going.

Hiding from germs will eventually kill you. It is killing the elderly, whose general immunity is gone. The easy way to help the elderly is to nix the rubber gloves, allow pets, sex, the alcohol sanitizer and to come in sick. By now, Fauci's head has probably exploded.

There are other ways to build immunity. Having general immunity and a ready supply of Atarax, made getting SARS-2 survivable. Here is my routine:

• Using public computers at the library
• Suchi
• Don't wash lettuce
• Raw hamburger meat when cooking
• Kitfo
• Rare beef and lamb
• Eggs over easy or sunnyside up
• Uncooked canned food
• Bring lunch
• No hand sanitizer
• Change the sheets only once a month
• Never wash pillows
• 12th step meetings
• Shake hands
• Kissing, the deeper, the better
• Use a sponge to clean counters, pots and pans
• Wash hands quickly
• Bathe every other day
• Eat out, get coffee
• Have a roommate

Casting a Spell: An Easter Vision

The title of this thought experiment refers to Daniel C. Dennett's masterwork, Breaking the Spell: Religion as a Natural Phenomenon. Dennett is one of the three wise atheists (with the strident Richard Dawkins and the ironic Christopher Hitchens, of recent memory, who had his kids baptized, just in case).

Without animus, Daniel examines the why and how of religion, from animism to the belief in a belief in God. Dennett is a master of identifying memes through the ages. Like most modern atheists, he asserts that ethical values, especially love, can life outside the realm of religion. After reading his book, I emailed him that he is a better Christian then most Christians, to which he responded, thank you.

His ideas (and ideals) are a good resource for young atheists (like my daughter) and members if the Curia who have lost (or never really had) their faith in God. They can hardly admit this publicly without loss if income and position (more about them later).

He is not alone. His approach is a modern evolution of the theodicy of Hegel, which traces the idea of God in the same way from the irascible God of the Old Testament to the God (or concept of God) in modern existential philosophy.

The History of God by Karen Armstrong follows the same evolution, including Judaism and Islam. The evolution of humanistic religions, including the Eastern religions, are all traced to the Axial Age identified by Jasper. Diarmaid MacCulloch examines Christianity, The First There Thousand Years, with the first thousand located in both Greece and Israel.

Elaine Pagels work, Revelations: Visions, Prophecy, and Politics in the Book of Revelation, casts the last book of the bible as cultural history and social criticism rather than mysticism. The Hebrew prophets and Jesus of Nazareth would likely agree.

The oldest debate in Christianity is whether it should be a part of Judaism (as practiced by James, the Brother of Jesus) or be transplanted into Gentile culture, as led by Paul (Saul of Tarsus). Paul believed that, once the Apostles (witnesses) had baptized all nations, Jesus would return; sooner than later. His writings are more pastoral than revelatory.

John of Patmos, writing after the destruction of Jerusalem, attacked Pauline Christianity in his prediction if the return if Jesus as a restoration of Judaic Christianity. He had the last word in the New Testament, but his predictions did not materialize. His reactionary approach still exists, however, in Fundamentalism.

Pauline Christianity evolved into the Orthodox Catholicism of the Great Councils of Ephesus, Chalcedon and Nicaea. Augustine of Hippo grafted neo-platonic misogyny onto Catholicism and it has not recovered since.

The Babylonian rabbis of the exile and Anselm's transactional vision of salvation turned the prophetic God of justice for the poor to the enforcer of morality. Thomas Aquinas brought Aristotle’s natural law philosophy and Scholastic method to Catholic doctrine, where it persists through John Paul, the voice of tradition at Vatican II, and Benedict who had been one of the liberals.  The latter abandoned his liberal mindset when faced with the anti-authoritarianism of his university students.

Is Dawkins right or can we find common ground between modern atheism and a more modern Christianity. I believe we can.

In Christian theology (from John the Evangelist through Aquinas) portrays the Christian Trinity (Father, Son and Spirit) as transcendent Being, Logos and Love. In Platonism, physical reality is a shadow of the world of ideas. Whether these are values and memes or divine persons does not really matter. How they are lived does. They can be useful in perceiving reality, acting with compassion and making life easier to live.

Whether there are cash and prizes in a future life does not really matter and cannot be proven except by dying and staying dead. Near death experience can be explained in terms of brain function. Any transcendent experience of death could not be recorded in a brain that has been turned off.

Jesus taught that those who are not against him we are with him. Those who respond to the poor and despised as if they were responding to him are with him, rather than those who invoke his name and do the despising.

The reality is what matters, not the partisanship. His moral teachings are useful, regardless, including his idea if a kingdom of God on earth. The key feature is living charitably, rather than by self-reliance.

The Church seems to have forgotten that last bit. It is why many clergy realize they are not really believers, which both Dennett and Vatican insiders point out. Jesus defined God as meek and humble of heart with a humanistic rather than legalistic morality. Its why he was killed by the religious and imperial authorities of his day.

Originally the Church was led by people who had seen the risen Jesus, not just the original eleven. We know that Paul's letters are real. Archeologists have unearthed copies that are dated to the right time. The chain of custody really does go back to people that Paul knew who claimed to have seen Jesus raised, regardless of later history. Whether their witness can be trusted is a matter of belief.

The history of the Church can be seen as proof that it is a farce. It can also be evidence of reality, as its core message and experiences of grace occur despite the politics. Only the leadership of the Church regards itself as a perfect and unchanging manifestation if Christ in earth. This is only proof of its humanness.

Since Clement of Antioch used distributing Communion as a way to enforce loyalty up through those who would do the same to Joe Biden for holding that banning abortion is both unworkable and misogynistic, the distance between profession and reality has been obvious.

It is easy to pick apart the flawed papal teachings on democracy, epistemology and sex over the past 200 years. I wrote a book doing so titled The Illuminati Respond to the Papal Anachronists that does just that.

The reason that democratic countries have an anti-Catholic bias is because it has been vocally anti-democratic, anti-science and anti-woman. Vatican II and lately Francis have been trying to move the needle, but it takes time for the authoritarians to die out. A humanistic morality devoted to social service, rather than enforcing neo-platonic sexuality is inevitable as society moves from capitalism to cooperation.

That authoritarianism cannot last is becoming obvious, from the inevitable downfall if Trump to the imminent collapse of social distancing. I have written about this too, both on my Christian Left blog and The Future is Calling book series (It Wants a New God; a Refund; Your Stuff). The apocalypse is truly upon us, but not the one the Fundamentalists hope for. Happy Easter.

Biden's VP Choice

How do you keep an idiot in suspense? I'll tell you later. Joe needs to wait until June to tell the press. That is when the decisions in June v. Gee (Louisiana's Trap Law) and Trump v. Vance (executive immunity) will be announced.

If June is a close vote, then Biden needs to make sure he wins the Midwest. If it is a lopsided vote then he needs to explain why overturning Roe won't happen (because states will never be the last word, nor should they be), that it will never get enough votes, that the only way to reduce abortion long-term is higher income for families.

Whichever VP is picked can connect the final dots about family income and why GOP resistance to enacting it means that the issue really is about sex and control of women's bodies. For the last to sound mainstream, she must talk about family income too. Also, if late term abortion is brought up, state that the consensus is likely reached that the issue was settled and was only raised to try and overturn Roe. Not saying this was Hillary's mistake in the Midwest in 2016.

Trump's cases may lead to a statement about the Office of Legal Council opinion and the question of his arrest. If so, Pence will be the incumbent. This makes the winning Midwest and abortion bigger issues. It is now time to start hitting Pence hard on not having the Cabinet remove an obvious lunatic (apologies to fellow bipolars). Make Pence Trump's sin eater. Senator Amy Klobuchar should start attacking now and should get the nod if Trump is gone.

Warren represents where the party needs to go. If Trump is still president at convention time, selecting her is the best way to get Bernie supporters engaged. If so, her advisors need to be kept on a short leash. That they are true believers in a line of work that demands flexibility is why Joe is the nominee. If Pence is, the Never-Trumpers now supporting Joe will use her as a reason to like Mike.

We have not heard from Senator Kamala Harris in a while. In a close election, if abortion is handled correctly, her selection may correct Hillary's other big gaffe: assuming that black men would come out at Obama levels. They did not, especially not in Milwaukee, Detroit, Cleveland and Philadelphia. Let's not make that mistake twice.

Of course, Trump is likely to lose Oklahoma and Wyoming, so the VP nod won't matter if he is still the President. Then the question is who has the best experience running a political department, has the best staff and has the best personal relationship with Joe. He already knows that answer and so do we. Ask him in July.

Thanks, Dr. Fauci

Thank you, Dr. Anthony Fauci. We are getting to the hump in some places, and know how to get there in others. Now step aside and put an immunologist in charge of determining when to get back to work.

The FDA has approved an ELISA (antibody) test for COVID-19 that works for its close cousin, SARS. I suspect that if SARS had been a pandemic, COVID would have had little impact. Our super-bug finally got here, as feared. Let's see who has gotten it and gained immunity from these strains of Coronavirus.

The best immunity for any such virus is to get it.  The easiest way is to fight it off and not get sick. Thus is what a vaccine does, FDA approval not required. Getting it bad enough to notice it also means immunity. Even with a vaccine, an unhealthy percentage will get sick and gain immunity that way. Some will be disabled and some will die. The question is how to minimize the latter.

The best defense is a healthy immune system. The medical fraternity, which is hierarchical in nature, has long championed hand washing, sneezing into elbows, not shaking hands, wiping down surfaces and social distance. COVID has helped illustrate that point and was a test in whether it worked. Senior citizens have long been living in such dystopian conditions. It is why they are dropping like flies.

Hierarchies always impose rules. Not making others sick is the new version of sexual purity imposed by the Church. The healthy responses to each are no and no. I suggest therapy for social anxiety for the few, not hygiene rules for the many.

They also like to control information. COVID exposure testing allows for the purity agenda to go forward. Mass production of the Cellex ELISA test ends the need for social distance and immunosuppressive hygiene rules. Power cedes nothing without a demand. The probability of hyperinflation with lots of money chasing too little labor is very real.

ELISA will also show that the best thing for health workers, their families and their patients is to get sick while letting the older doctors hide or retire. The social dynamics of the medical profession are not worth creating a climate of fear.

There are other short and long-term questions that will be answered with time; better sooner than later:

Does social distancing leave so many people without immunity that it is the cause of the second wave?

Does utilizing ventilators lead to recovery for patients or does it simply lengthen coma? Do these effects have to do with age?

Are seniors who get sick occasionally more or less likely to die of COVID?

In Italy, how many older people who died were alive longer than expected due to local mutations which reduce cardiac disease?

Are racial disparities in COVID infection and death due to poverty, including Food Stamp allocations that limit protein and increase carbs?

Is anyone checking how this pandemic is affecting workers in the field and factory that provide us with food?

Is this the time to increase the minimum wage radically to get people off of unemployment (with indexing and no phase in)? How about much higher refundable child tax credits, distributed with pay and indexed to inflation?

Are hospitalizations more likely because emergency rooms remain the primary care source? Are paid sick leave or irregular office hours required to get people out of the E.R.?

Will private insurance survive the current crisis or is a wave of bankruptcy likely? If so, is this the opportunity we need to get single-payer rather than expanding Obamacare or phasing in Medicaid for All? (Not a typo). Let's not waste a good crisis.

Can we quit talking about our senile national grandfather? Would you put your Fox News addicted parents on TV for public shaming?