Thursday, September 20, 2007

Open Letter To Mr & Mrs America

Dear Mr & Mrs America,

I would like to take this opportunity to write to you in order to explain precisely why you won't be able to afford that European vacation this year, and why the cost of living has risen as it has.

I understand you have lots of questions, and that your sources of potential enlightenment are prone to disinform you. And that you might feel like markets are punishing you, personally at the moment. Let there be no mistake: they ARE, and it is, in all frankness, your own fault .

To avoid doubt, and for the sake of clarity, I will use bullet points to assist your digestion of the facts as they are:

- the Gov't is YOU and YOU are the Gov't. Their debt is YOUR debt. As a result, your children will soon despise you, if they do not already do so.

- you have no national energy policy to speak of. This means that while everyone else in the world was moving towards great efficiency in energy use, YOU were buying SUVs, top-loading agitating washers, blindly and chaotically sprawling your suburbs, and building uninsulated 4500 sq ft homes with 30 ft gallery celings that could never be reasonably heated or air-conditioned with anything other than $30 or less oil.

- your energy levies are far to low relative to the quantities that need to be imported if you wish NOT to impoverish yourselves at the expense of your transport bill. This would not be quite as problematical if you in fact had more things to export than dubious mortgage paper, but in the absence of such levies, you cannot "eat your cake and have it too".

- your federal marginal tax rates are set too low relative to what you spend (and seemingly demand from gubmint), as well as in relation to all the rest of your peers in the OECD.

- your military spending is WAY too high relative anyone, anything and everything in the known universe. Do you really think it preferable to consume Cluster bombs and M1 Abrams Tanks in lieu of basic medical care, a prosthetic hip replacement in older age or raising kids that can spell algebra, as well as adequately perform it??

- this is of course why you feel like you are being taxed heavily, but that you've nothing to show for it - at least not things you can use such as: health-care, education, public infrastructure, public transport, consumer & environmental protection, social safety nets and so forth.

- you consume too much - more than you produce - and you do not save. Remember the parables about 7 fat years and 7 lean ones? Of the Ant and the grasshopper? Sometimes shit just happens and YOU ARE NOT PREPARED! Since it y understanding you are religiously faithful, think of it terms of the Old Testament: It was the Pharaoh who organized the stores of grain for the 7 lean years. The bible SAYS it's OK to let the government save for you by raising taxes, but don't encourage them to torch the grain stores!

- globalization IS challenging for workers in advanced economies. But progressive taxation and wise redistribution can help reduce the stress of adjustment in society, and fund the transitioning to higher-value added goods and services. It also encourages the majority of people to believe the system is a good one (for everyone - not just asset owners). Cutting taxes to give the wealthy even more during times of rgeat stress and adjustment is both unnecessary and unwise - at least until such time as the more basic economic problems facing the nation are confronted.

- the Asian mercantilists are one of the most prolific sources of "something for nothing" the world has ever seen. They should be nurtured and valued, irrespective of their shenanigans in interest rate and fx markets. But YOU risk killing the golden goose by engorging yourselves like gluttons at a smorgesbord. You should be treating it parsimoniously, using them to provide labour intensive goods at attractive prices. But if you (and I mean your companies too) abuse this privilege, you will as a by-product produce too many dollars to digest. Yes, the markets should adjust, and make such imports more expensive, the more we want, and so we are seeing it now. But YOUR leaders have been aware that the markets have NOT been working and rather than take action deal with the problem of excess demand and overly-zealous vendor financing (like raise taxes, or levy a VAT-like consumption tax) they chose to ignore it. And remember that despite what any charlatan may tell you: tax cuts have NEVER "paid for themselves".

- your political process is broken and morally bankrupt. Your leaders and policy so important to your country and the world can be "bought" - directly - for insultingly small sums of money. The folly of this would amusing were it not so incredibly sad and dangerous.

- your leaders - speaking quite frankly - suck. But YOU voted for them. Ergo..

I undertand that you may find some of what I've said contentious, uncomfortable, bordering upon the insulting. Confronting truths dissonant one's current perceptions is never easy. But, if you do not desire to see your nation, your old age, your savings, and your children's futures continue to disintegrate before your eyes, you really must get a little more stoic about things and DEAL WITH REALITY AS IT IS which contrary to what you've been told, involves difficult consumption decisions and personal sacrifices to rectify, that in a fair and just nation would and should be borne by all segments of society.

Yours truly.

"a Cassandra"


p.s. - You also simply must do something about your diet, and foreign policy. It's a small world and its getting smaller, so as people, maybe we, too, should consider downsizing rather than supersizing.

13 comments:

Charles Butler said...

E.F. Schumaker, Frank Lloyd Wright, Lewis Mumford and Buckminster Fuller's worst nightmare. Or perhaps Fred McMurray wrestling with Rod Serling.

H. Ballard

assisi asobie said...

Bravo!

An absolutely tour de force rant!

Will it be heeded?

No.

Anonymous said...

But, but, but, S&P and Dow are within 2% of all time highs. So I feel rich. Time to party like 1999!

Mr. and Mrs. America

-pi, snickering behind the curtain

OldVet said...

I heeded long ago, made enough this morning without lifting my fingers to buy a rountrip Bus Class to Rio. Tomorrow I'll do the same again so Mrs. OldVet can go too. We'll drink 1994 Rosenbloom Heritage Shiraz, and listen to the equally rich smoky voice of Buika singing "Nostalgias" for a way of life gone away.

Please keep up the good work!

bionick said...

How can you blame spectators for a bad performance? Besides, who are “nation” and “Mr Amrica” anyway?

Anonymous said...

what a load of crap. you clearly are very ignorant of the US.

US military spending is a tiny fraction of overall GDP. Less than 4%.

The US is more energy efficient than it has ever been in its history.

American taxes are incredibly progressive.
* The top 0.1% of taxpayers by income pay 17.4% of all federal taxes (earning 9.1% of the income).
* The top 1% of taxpayers by income pay 36.9% of all federal taxes (earning 19% of the income).
* The top 5% of taxpayers pay 57.1% of all federal taxes (earning 33.4% of the income).
* The bottom 50% pay 3.3% of all individual income taxes (earning 13.4% of the income).

I'm no fan of the US, but this bigoted crap is just rubbish, and does not reflect well on you.

Anonymous said...

As a 14th generation American, whose granddaddy to the fifth power fought in the Battle of White Plains with Washington, I say well done. This is not bigoted crap. It's a cake. You can frost my piece with some World Trade Center #7 was professionally demolished icing.

wcw said...

Now, that was a fun rant. Sure, it went too far, but that's what a fun rant *does*.

In re: Anonymous #6 and his regurgitation of right-wing-talk-show bullet points, I can only say, I pray you're on the other side of my trades tomorrow.

May I suggest long USD/KRW?

Anonymous said...

wcw:

I don't understand why you are flattering right-wing-talk-show bullet points by comparing them with official US government statistics.

i guess you think very highly of right-win-talk-shows, which doesn't exactly reflect well on you.

-anon6

"Cassandra" said...

Anonymous No Name....I simply cannot resist...

You are almost right with the 4% figure (there are some reasonably largish sums that are off-balance sheet (vets, pensions, meds and nukes) but cede me the benefit at 4.5% or so (probably low in reality, but I'll hold it there). In rough numbers, thats $800bn. Talking points aside: that is >40% of Federal Budget, approaching high 40's with the off-balance sheet goodies thrown in.

Europe - now with greater population than USA - all-together (which incluides the next 3 largest military expenders of advanced nations) spend less than $200bn annually. I have no doubt, Americans - if they chose the match revenues with current expenditure (readjusting military spend to peer levels) would find the additional $600bn more than adequate to fund, many of the intiatives described with great effect for business and The People.

While it is true that the wealthiest pay the lions share of income tax, it is also true that they derive the largest benefit - complete and total security of property rights as birth privilege transferred bewtween generations, What is the "correct" price for using the state too protect property rights and enhance asset values and thus priviliege?

Now as for your ropey (and dishonest) figures, I note that you single out the contributions of 50% of the people in the lowest bracket as "income tax", for disingenuous purpose: They contribute taxes at the federal state and local level in most regressive manners in the form of property, sales, and all other manner of pecuniary tax. IF I wanted to distort such numbers for debating advantage I would calculate the total taxes paid - implied and otherwise - AS A % of INCOME. Then the issues of fairness and burden and so forth would be highly apparent.

I am proposing fairness across the board - rich people MUST pay more because they CAN and because using the state tpo protect properthy rights is, at present, underpriced, and the bottom 50% of people too will share the burden and be hit hardest by regressive Pigouvian taxes upon energy, Carbon, and other consumption-based taxes in order to drastic ally change behaviour towards economically sustainable situation, rather siumilar to the bvalance achieved by other OECD nations ex-UK and Spain.

As for the laughably true-but-irrelevant statement that the US is more energy efficient than ever before, I can only but control my amusement that you've set the bar so absurdly low. In response to the two prior oil shocks, other nations implemented policies to limit the effect of such a shock in teh future. Entirely laudable, and very prescient in my opinion. Americans, unwilling to make sacrifice (implored by Carter in 1979) were told by two generations off Bushes that America DOES NOT AND WILL NOT change their way of life, triumphally thumping.... "we can and will do whatever we want..." Well everyone makes choices, and the choices America has made has been, to say the least, been most poorly prescribed by so-called leaders.

Parents do not let their kids do whatever they want to parrticularly when the children are doing things inimical to their own present and future well-being , and so, to, should leaders (this word has a precise meaning) lead the people to insure the people minimize the harm thhey do to themselves when individual decisions agglomerate into common tragedy for the society as a whole. This, Anonymous no-name is rather basic Civics-101, and there is no amount of conservative drivel that can un-make it so.

Thanks for writing all the same. I'm glad I touched a sore-spot, and do hope you'll retort with something more weighty and convincing to the issues and problems facing America, and its style of democracy and capitalism in modernity.

-C-

Anonymous said...

Cassandra,
to me it looks like you chose your name according to the ancient Greek Cassandra who could foresee correctly but nobody would believe her.
A good post straight to the point(s.)
Gunther

HoosierDaddy said...

anonymous 3:30 PM:
Of course the income tax figures do not include FICA/social security taxes which are quite regressive (15% on the 1st 97.5k of income, half paid by the worker, half by the employer). The excess collected beyond the current costs of Social Security and Medicare is used to offset part of the deficit making it appear much smaller than it is. Good thing we don't have an impending wave of retirees or anything....

Anonymous said...

One of our problems is both parties and their candidates are preselected so that the final choices are not really choices at all.