Cromwell

If you can somehow get past the conceptual problems with secession, you must still confront a series of difficult practical issues. How do you divide the family silver? What happens to the nation’s debts? In particular, what do you do with the armed forces and entitlement trust funds?

Debts could be shared either on the basis of population or GDP. Public lands would be returned to the states. The military would present serious questions, however, as a disproportionate number of bases and personnel come from the RSA. Some of those assets would have to be transferred to the USA. How that would work, I have no idea.

The RSA states, for the most part, are net beneficiaries from government transfers. If entitlement trust funds were divided on the basis of GDP, the new RSA programs would go broke very quickly, and major cuts would be required. That is less of a problem than you might think, however. The leaders of the RSA would eagerly embrace the concept of a tiny welfare state dominated by the wishes of the white and wealthy. The USA would aspire to be Denmark; the RSA would use Central American banana republics as a template.

There has been a fair amount of chatter about secession since the 2020 election. Is it a plausible solution to the problems facing a severely divided nation?

I did a post setting out general criteria for secession in 2017. Applying those criteria to America, this is what you get:

1. Sensible boundaries: While the RSA (Reactionary States of America) would be a reasonably compact and solid block, the USA would be split into two widely separated areas. In addition, purple states would be up for grabs. There is no obvious solution to either of these problems.
2. History of independence: Texas was, for a few years, an independent state. Parts of the RSA were included in the Confederacy. A few of the RSA states were sovereign states of a sort prior to the ratification of the Constitution. That’s it, and it isn’t enough to pass the test.
3. Separate culture: There are differences, of course, but the real differences are between urban and rural residents within states. National media and massive migrations have also limited the differences between the USA and the RSA. This test isn’t met, either.

In addition, there are enormous practical issues that would have to be resolved to permit a national split. I will address these in my next post.

Polls show that a substantial majority of Americans support raising taxes on the wealthy. The tax increase supported by the Democratic leadership has already been watered down, however, and may fail altogether. Why?

It’s tempting to attribute this to campaign donations, and they undoubtedly are part of the picture, but the story is bigger than that. There are two other considerations. First, even some Democrats buy into the dollar store economy, either because it has been beaten into their skulls over the last 40 years, or because it can help them get re-elected. Second, the kinds of people who run for office and win are largely the kind of people who want to avoid tax increases. If the local car dealer calls you to complain about the impacts of legislation on him, you are likely to listen to him, even if your politics are different, if you went to the same schools and play golf at the same country club. It is a simple matter of identification.

Per the NYT, climate change is exacerbating severe water management issues in West Virginia, but the residents would rather live with floods than give up their forlorn dreams of a return of the coal industry. What should be done with these people?

As with vaccine and mask mandates, in a perfect world, the punishment would fit the crime. Parents who refuse to let their kids wear masks in school should be required to educate them privately at their own expense. Employees with minimal contact with the public should lose their health insurance; workers with more public exposure should be fired. And as to climate change deniers who style themselves rugged individuals, they should be left without any public assistance when the disaster arrives. That’s justice.

It won’t happen, of course, but it should. Abortion opponents should pay higher taxes to deal with the myriad of social problems arising from the births of millions of unwanted children, too.

The great would-be emperor Xi

Wants to put Taiwan under his knee.

It’s a glittering prize,

So don’t be surprised

If there’s war in the South China Sea.

Paul Krugman is appalled by the thought that an industry which represents a tiny percentage of GDP, even in West Virginia, has enough clout to prevent meaningful action on climate change. He’s right, of course. Why is this happening?

I saw this during last year’s Kentucky Senate campaign. To millions of voters, coal mining doesn’t mean black lung, fires, and more powerful hurricanes; it means traditional values, male camaraderie, strength, self-reliance, and prosperity. Even without climate change regulation, coal mining is effectively dead in West Virginia, but the happy aftertaste lingers, and is politically potent.

Persuading the public that hanging on to the glorious past is going to be a long and difficult task. Unfortunately, it is time we don’t have. Manchin and McConnell will have plenty to answer for in the not-so-distant future.

It’s time to discuss climate change.

What the right has to say is deranged.

But the voters will say

We should live for today

So maybe it isn’t so strange.

Given the constraints imposed by our political system, there are two reasonably plausible alternatives to the dollar store economy. The right-wing populist alternative would consist of steep tariffs, subsidies for dying industries, erratic regulation allegedly in the public interest, and tax cuts focused more on workers than capitalists. The left-wing alternative is the one that Biden is pursuing today. It features more regulations, higher taxes for business, plenty of support from the Fed, legal assistance to labor in its battles with capital, and a significantly expanded welfare state. The idea is to increase the size of the middle class, to push up demand, and to accommodate large wage increases in our existing economy.

The right-wing alternative has been tried in many countries in the past. It is a proven loser, because it sacrifices cutting edge industries and jobs for the industries of the past, makes your economy less competitive on a global basis, and hurts domestic consumers. The Biden alternative has never been tried under anything like the current conditions. Most of the Democratic Party supports it, but Manchin and Sinema are, at best, lukewarm. Their objective appears to be to keep the dollar store economy, but to sand down some of its rough edges. Who will win this tug of war? I make no predictions on that one.

The biggest loser in the dollar store economy unquestionably has been the blue collar worker. With few assets to his name, he has to rely on his wages, which have been held down by technological change, the availability of cheap overseas labor, and capital-friendly legislation and regulations. Male workers using physical strength and skills in particular have lost money and status in the evolving knowledge-based economy. The only silver lining in this dismal picture has been low prices, which give the worker a safety valve of sorts; hence, the popularity of dollar stores and the title of this series.

Given their numbers and struggles, blue collar workers are the principal battlefield in American elections. The Democrats promise more power and higher wages; the GOP offers culture wars, scapegoats, and nostalgia. Neither side has won a complete victory at this point. The outcome of the 2024 election will probably ride on Biden’s ability to improve the lives of workers, and to persuade them to give him the credit.

To the reactionary right, the enemy isn’t the one percent, which consists of scrappy, hard-working businessmen who create wealth and try only to keep as much of their just desserts for themselves. No, the primary driver of rising inequality in America is the ten percent: professionals who look down on the less educated, marry each other, live in gated communities, and seek unfair advantages for their kids. They’re the self-seeking, undeserving establishment that must be overthrown. They’re the big winners from the dollar store economy.

It’s a popular narrative, but the facts—at least in monetary terms—do not bear it out. The numbers show that professionals have managed to break even over the last forty years—nothing more. Their earnings have remained fairly stagnant, and while their investments have done well, they have far fewer assets than the one percent, so the benefits they have received from hefty corporate profits and low interest rates have been fairly limited. In addition, the internet is a threat to their traditional business practices; it provides consumers with low-cost alternatives to their services, but does not increase revenues.

In short, professionals are not, in fact, the primary beneficiaries of the dollar store economy—capitalists are.

To a CD, a fetus (even a fertilized egg) is a human being with a soul, and to kill it is murder. To a Reactionary, abortion facilitates the sexual freedom of women, which is an affront to God and a mortal threat to the traditional male-dominated social order. To a liberal, abortion is tied to both freedom and equality for women. They aspire to a kind of secular, tolerant, multi-cultural democracy that is reviled by the right.

Abortion is such a divisive issue because the ideological stakes for each of these factions could not be higher; they tread on ground that is not negotiable. The other message here is that Justice Ginsburg’s critique of the legal reasoning behind Roe has a lot of merit, because her argument that the decision should have been based on equal protection instead of a vague right to privacy has a basis in the text of the Fourteenth Amendment and reflects the real sociopolitical objectives of the left, as described above.

The dollar store economy, for the most part, has very, very good for business. Globalization has opened up new markets and increased revenues, while the internet, the availability of cheap overseas labor, and capital-friendly GOP tax and regulatory policies have kept costs down. Profits and share prices have soared. Life is good.

And yet, as the saying goes, there are storm clouds on the horizon. Globalization is in reverse, as the result of tensions between the US and China. The poorly paid workers that business so prizes can’t afford to buy their products. Worse, they are angry and restless; the pandemic is causing them to quit their jobs, so wages are increasing. Finally, business is losing control of the political agenda. The left is in power, and wants to increase taxes and regulations; the Trumpist right, on the other hand, favors a less profitable Fortress America, with lots of arbitrary intrusions into business operations.

Business, like the EU, desperately wants to cling to the status quo, and to avoid having to choose between two less attractive alternatives. It wants the dollar store economy with higher domestic demand. It won’t happen. Something, in the end, will have to give. The good old days ended in 2020.

We’re deferring the debt ceiling war.

We’ve pushed it back seven weeks more.

We’re kicking the can,

Unlike Afghanistan.

It’s a practice we ought to deplore.

The lead story on the local TV news a few days ago was the Covid-related deaths of two police officers. The memorial service for one of them basically preceded a parade in his honor. There was no discussion of his vaccination status, but it is reasonable to assume he was an anti-vaxxer.

None of the other Covid-related deaths in the viewing area received any mention. In other pertinent news, the NYT reported that the vaccination rate for cops on a national level was relatively low, and that police unions were fighting vaccine mandates ferociously.

Here is what you should take from these facts:

1. Anyone who gets paid by the public to put on a blue uniform is apparently viewed as a hero, whether he actually does anything heroic or not. Blue lives don’t just matter; they matter more than yours and mine.
2. A frightening percentage of cops are reactionaries. They don’t care about the public health and welfare as much as enforcing their view of law and order on the rest of us. In their eyes, they have the right to spread the virus among us—our bodies, their choice, because they’re in charge.
3. If we ever get into a serious street battle between supporters of a duly-elected leftist government and right-wing insurgents, do you really think we can count on these people to enforce the law, as opposed to their own prejudices? Do you think it is a coincidence that so many of the January 6 rioters were military and law enforcement types?

If you’re an extremely talented and artistic young person with a flair for self-promotion, the dollar store economy is for you; the internet has made it possible for you to reach millions of people around the globe directly, and without serving any kind of apprenticeship. Everyone else in your cohort, however, is just screwed. The combination of low wages and high asset prices—especially for housing—that is so helpful to retirees is toxic for you.

To make matters even worse, many millennials are trained for fulfilling, creative jobs that do not exist. They would be better off as plumbers or electricians, but working with your hands is for old people and immigrants.

On balance, the dollar store economy is a nightmare for millennials, which is why so many of them are Sanders supporters. But cheer up, guys; you will inherit lots of money along with the damaged planet, so help is on the way.