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Kindle Notes & Highlights
by
Peter Temin
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January 3 - January 17, 2021
Senator Elizabeth Warren recently gave an impassioned summary of black exclusions: “Entire legal structures were created to prevent African Americans from building economic security through home ownership. Legally enforced segregation. Restrictive deeds. Redlining. Land contracts. Coming out of the Great Depression, America built a middle class, but systematic discrimination kept most African-American families from being part of it.”
The oppression of blacks, increasing rapidly after the war, began to meet opposition in the 1960s. The Civil Rights Movement that Johnson supported led to legislation that granted blacks legal rights to equal citizenship, but these laws were followed by the War on Drugs that generated a new system of mass incarceration that continued the Jim Crow tradition.
Nixon proclaimed the War on Drugs just as the Great Migration ended. Reagan and state governments expanded the war in the 1980s as the crack epidemic grew. Blacks were (and are) far more likely to be arrested for drug offenses than whites.
At the same time, industry began to decline in the American Midwest, in what is now called the Rust Bowl, and the jobs that blacks came north to find began to disappear.
The enduring reach of racecraft can be seen in the treatment of immigrants,
Attitudes were stretched in the nineteenth century as varied immigrants came to the United States and are being stretched again now as Latino immigrants have become more common.
New immigrants typically were poor, and they were grouped with African Americans in the binary world of racecraft.
As with the Great Migration, Latinos moved north to escape repressive political regimes that denied them a path to economic advancement and security. American interventions in Central America to dislodge governments we did not approve of were followed by the North American Free Trade Agreement (NAFTA) in 1994.
Just as the changing immigration laws of the 1920s led employers to look to the American South for workers, the end of internal U.S. migration led employers to look south of the American border
The influx of Latinos, however, became entangled with the War on Drugs as Central America became a prime source for drugs. Attempts to stem the inflow of drugs led to stiffening of the Mexican border, leading in turn to an increasing number of unauthorized immigrants who have become a political football.
There is the same perception in the white population that anyone in a Latino neighborhood is up to no good. Latinos are on the wrong side of racecraft.
“Racial discord plays a critical role in determining beliefs about the poor. ... Opponents of redistribution in the United States have regularly used race-based rhetoric to resist left-wing politics.”
“And you are not the guy and still you fit the description because there is only one guy who is always the guy fitting the description.”
But the persistence of race and gender discrimination highlights the common risk to the bodies of blacks and women. For African American men it is the danger of being killed, while for many women of all colors it is the fear of being raped and of not having access to appropriate health care.
marital rape was not a crime in all fifty states until the early 1990s.
Voting for blacks was supposed to be secured in law by the Fifteenth Amendment and then the Voting Rights Act of 1965, but it is still under attack today. The
Since the Fifteenth Amendment barred the use of race in voting regulation, poll taxes were used in its place, depriving poor whites—men and women alike—of the vote as well.
The attempts to allow more people to vote had important political effects. Before 1963, racially conservative racial views among Southern white voters strongly predicted Democratic identification. But when Presidents Kennedy and Johnson supported civil rights for African Americans, these racially conservative voters became Republicans.
Women’s median earnings remain about 20 percent lower than men’s.
Education is not the reason—women now have education equal to those of men in similar occupations. Yet women doctors and lawyers earn less than their male counterparts. And when women achieve prominence in a field, the wage goes down.
Social Security is not a pension plan where you pay in while young and collect when you reach a certain age. It is funded each year by taxes that workers pay to finance the expenditures due to current Social Security recipients. Since taxes in any year do not exactly equal the amounts needed for Social Security payments at that time, there is a buffer called the Social Security Trust Fund between the taxes and payments. This trust fund was built up in the last few decades to prepare for the enormous number of Baby Boomers born after the Second World War who would be collecting benefits. Baby
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Social Security is not about to collapse. It is the Social Security Trust Fund, not the whole system, which is running out of money. If the trust fund is exhausted and nothing is done, then benefits will be reduced. This will cause hardships for many Social Security recipients, but it does not mean the end of Social Security.
Social Security taxes are collected on wages only up to $118,500; the limit could be raised or even eliminated to balance the system. This cap on earnings subject to Social Security tax was set before inequality rose, and it now stands close to the boundary between the FTE and low-wage sectors. Raising the limit of wages subject to tax therefore would extend the funding of Social Security into the FTE sector. But the FTE sector is not interested in helping the low-wage sector, and nothing has been done.15
There is no imminent disaster. Instead there are problems that come up as conditions change and have been dealt with periodically. The latest major revision was instituted thirty years ago when inequality was not as severe as it is now, and there is a need to revise the taxes or benefits for the longer run again.
Without that information, voter attitudes will be based more on emotion than reason.
Voters need to know not only what they think about a variety of issues, but also how important these disparate choices are in casting a single vote.
Larry Bartels, a prominent political scientist working with the Median Voter Theorem, considered voters’ opinions about the Bush tax cuts in 2001 and 2003. Finding that many ordinary people favored them, he asked incredulously: “How did ordinary people, ignorant and uncertain as they were in this domain, formulate any views at all about such a complex matter of public policy?”
Elections become contests between several oligarchic parties whose major public policy proposals reflect the interests of large investors. The Investment Theory of Politics focuses attention on investors’ interests, rather than those of candidates or voters.
Personalities, issues, and campaign events are the focus of newspaper stories, but money is the prime determinant of the electoral outcome.
money has been driving American congressional elections for many years.
Three-quarters of outside spending in 2006 was fully identifiable, but only about a quarter was transparent in 2014. This growth of political spending without oversight facilitates corruption, and
The FTE sector dominates decision making, and the low-wage sector is shut out of this process. This exclusion is preserved in a supposedly democratic society by maintaining that voting is a privilege, not a right, restricting access to voting by the low-wage sector, and by the promulgation of information by the businesses and rich individuals who want to steer policy toward the FTE sector.
This study provides a window into the attitudes and preferences of the one-percent group, which wants to reduce government activities in order to reduce government deficits. They do not want their taxes raised to lower government deficits, and they favor tax cuts when they can get them.
Nancy Pelosi and John Boehner, successive Democratic and Republican former Speakers of the House of Representatives, were among the representatives whose support from the 1 percent of the 1 percent was the strongest. The Investment Theory of Politics implies that their policy stances are not that different. They belong to different parties and differ on many specific policies. But they are both attentive to the FTE sector and are not eager to rock the boats of the very rich.5
Ayn Rand and Friedrich Hayek after the war. They anchored their ideology in American history by arguing that the U.S. Constitution was not designed to protect rights, but instead to restrict them. In their view, the Constitution’s role was to protect property rights, safeguard states’ power from the federal government, and curtail democracy to preserve privilege.
Congress approved an oil depletion allowance in 1926, allowing oil producers to deduct more than a quarter of their gross revenues from their taxable income.
The belief in small government does not conflict with the readiness of business leaders to profit from the effects of government. The way to understand this apparent contradiction is that “small government” does not have a simple meaning. It means partly a government that does not try to help the low-wage sector of the economy. The New Deal should be repealed; extensions in the postwar years should be eliminated as well. Unions should be broken. But transfers through the tax system from the low-wage sector to the FTE sector are fine.
Donald Trump similarly used bankruptcy to make others pay for his speculative activity in Atlantic City while walking away with profits.9 Trump took advantage of tax loopholes that apply to real estate to the tune of about a billion dollars;
Many companies also dodge taxes by moving their profits around.
they have all experienced disappointments as whatever they were able to do was limited in the face of the forces of racecraft.
We know about this secret organization primarily from Jane Mayer’s book, Dark Money.
Early in 2010, the Supreme Court decided the landmark case Citizens United, ruling that the government could not restrict independent political expenditures by nonprofit companies, greatly easing the flow of campaign contributions from companies.
Koch and his secret organization were quick to seize the opportunity. Reasoning that their money would have more impact in smaller markets, they poured money into state races for governors and representatives in the 2010 midterm elections. Democrats were slow to take advantage of this opportunity. They were neither disciplined nor under centralized control; even if they had realized the opportunity, they would not have agreed on how to allocate their resources.
The Democrats lost control of Congress and many conservative governors were elected in 2010.
While most rich people appear to be conservative to one degree or other, there is some variety among the very richest Americans. But the presence of a few highly visible philanthropists should not blind us to the conservative views of most of the top 1 percent and especially the very rich.
A democratic government is one that is controlled by all or almost all of the people. Lincoln’s immortal words, “a government of the people, by the people, for the people,” describe it well. It may take the form of a republic if the numbers in the democracy are too large for unified meetings and actions.
An oligarchic government is one controlled by only part of the population.
It is called an aristocratic government when membership in the oligarchy is bestowed by birth and a plutocracy when membership is by income and wealth. An autocratic government is one ruled by an individual, a family, or another very small group.
Most Americans refer to their country as a democracy, but this is not accurate. The growing inequality of income has generated politics that are oligarchic and even at risk of becoming autocratic.
The United States was the first modern democracy.
