Wednesday, April 22, 2020

Gov't Sponsored Entities

A quick history lesson: in the early days of the Republic, the Congress mostly concerned itself with transportation issues like highways, canals, railroads,ports etc. Congress would do this by announcing a project (say, a highway from Washington DC to Savannah, GA), then it would create a structure to empower a corporation (or series of corporations) to do the project and when the project was completed, the company would dissolve; if there was money left over, then the investors would divvy up the profits and if there wasn't money left over....oh well. Either way, the company was born to perform a specific task and when the task was done, the company would cease to exist.

This changes after the Civil War, when the American economy evolves on the axis of fixed and variable costs. Before the War if you made shoes, for example, and times were good and you had lots of customers, then your variable costs would pay from themselves and you'd work hard and make money; but if times were bad and you had no customers, your variable costs would keep you from performing any work at all and you'd have to cover your fixed costs in some other way, which is why companies in those days were mostly cottage industries of people who made their living probably by farming or bartering.

But after the Civil War, with the expansion of the trans-Pacific railroad, the invention of the telegraph, the introduction of unified national currency and the cessation of slave labor, companies could be formed that could create and move massive amounts of product where the variable costs fell so low that production never ceases even if the economy is bad. We went from an economy where money was tight and producers literally shut down when there were no customers to an economy that was based on non-stop production regardless of whether buyers for the products would materialize because production itself became so cheap.

Gov'ts think on the level of Gross Domestic Product, the overall tally of all the stuff and services that a population produces. This encompasses hundreds of millions of people across millions of acres of land in thousands of different industries making an incalculable number of products. Basically this is what we call 'big picture' stuff, indeed the biggest picture possible really. So expecting the gov't to sensitively act in regards to this industry or that location or these people over here, is just not realistic. It doesn't think that way, it doesn't move that way, it doesn't have the capacity to think or move that way.

The bigger industries have a better chance of reaching the ear of the politicians and a better chance of creating an impact that politicians feel like they have to react to. In the 2007-08 crisis, for example, the gov't bailed out the mortgage holders, not the homeowners; that is, it bailed out the larger institutions not the individual citizens. Why? Because it's easier to do and clearer to see what needs to happen. (*) In the case of the thousands of people who lost (or could have) their homes, adjudicating each claim would take the courts and mediators several years at least to react to and the distribution of funds will undoubtedly be half-assed, piecemeal, lumpy (and most likely doled out to the nearest politician's donors and cronies, regardless of where the money should go). When a crisis arises, the gov't's levers of action tend to be really huge ones and when the gov't needs to put money into the system, for example, it's gonna go to the big money places (not the small ones). So the federal gov't in general is too big, too slow and too insensitive to ever really get anything useful done because all it can do is farm money out to other entities to do it all anyway and in an emergency the gov't will prize speed over justice so the fat cats get first shot at the buffet while everyone else begs for a refill of Pepsi. (**)

But, as in the history lesson above, Congress has the power to create entities, corporations, to perform specific tasks--indeed, that's the way it is supposed to work and we totally lost that during the Reconstruction. I would suggest creating a series of such entities to continually funnel capital into the industries that are inescapable in the daily life of the citizenry: housing, healthcare, education and transportation. These entities would likely be financial in nature and serve the purpose of backstopping these markets to ensure their liquidity in the face of potential crisis and to safeguard gov't and business from each other. These entities could form a thin gray line where business and gov't intersect. And the good news is we already have some of them.

For example, Fannie Mae (FNM) was created to backstop America's housing and real estate market. The idea was to make sure that real estate markets had enough liquidity to encourage the constant development of property, especially for housing. It is market-based in that it responds to customers rather than following a predetermined gov't plan of production. It is a private company, it sells stocks and bonds and pays dividends to its investors.

Why does the gov't need a backstop? Think of it this way: Congress's dominion is not over the people of the United States of America but it's land. All the states and territories that the American gov't claims is the responsibility of Congress and it is Congress's most basic desire to make money off this property or for this property to be productive. Every single acre has a certain value to Congress and it seeks to yield as much in the form of economic growth and income through taxation. Say, there is a wool hat factory on one of those acres; it is a building filled with equipment, it employs workers to make hats, it transports hats, sells hats, makes profits from hats. In a good year the effect on the macro-economy will be positive (***) and the taxable income to Congress will bring money in to public coffers. Hurray! But if the factory burns down then the party's over. The value of that land has gone from all that fine ass wool hat money to nothing--indeed, perhaps less than nothing! Perhaps the burned down shell of a factory is actually a cost rather than a source of revenue.

Now Congress could come back to the factory owner and say you owe us the same amount of tax this year and we don't care that your factory burned down. The factory owner is likely to say, I ain't got no money...whachu want from me? Congress could get all badass and throw the guy in jail but what good is that? Now that's even more money out from  what used to be a steady source of mad wool hat scrill. At the end of the day the Treasury is going to feel the loss of that factory. A chunk of land that used to be positive is now negative, that's no good.

In real estate, though, since the basis of purchase tends to be in long range bonds (or potentially extended contracts), Fannie Mae can step in and purchase the note on that chunk of land from the bank that sold the land to the factory owner. Now Fannie Mae owns the note, the factory owner owns the land and the bank is out of the picture but hasn't lost a dime; the gov't still isn't making any money off this dilapidated property but the private sector is incurring less of a loss because the pain is now transferred to a secondary holding company (this could be referred to as a 'toxic asset') that is backstopped by the gov't. The money moving around in this scenario is what is referred to as "economy" and keeping the liquid sloshing around is really all the gov't wants to do. It wants to make sure that people can still buy land, make money, build houses, whatever, and Fannie Mae is a part of keeping the market moving without the gov't really being involved, maximizing the profit of the good places while minimizing the cost of the bad places.

If Fannie Mae goes bust will the gov't bail it out? Yes. You know it, I know it, the American people know it. The other side of Fannie Mae's existence is that it is there to be bankrupted if things go wrong and to keep the gov't from having to bail out a million little people, instead it just has one big secondary company to re-liquify. Why would it do this? Because the gov't is going to feel the loss anyway, it can't avoid the loss. As in the example above, when the factory burned down the gov't felt the loss. If Fannie Mae absorbs the loss, then the gov't still feels that loss, but the citizens at least have a better chance to avoid the damage and still participate in a liquid real estate market. The bad times, as in 2008 when Fannie Mae got punched in the face, are gonna be bad for the gov't whether Fannie Mae exists or not. But Fannie Mae gives the gov't a chance to liquefy the market and liquefy it again if need be. So Fannie Mae is better in the good times and convenient in the bad times and that's pretty much all it does.

Do you see the effect? The libertarians will tell you this is creeping Marxism. I'd say it's the opposite: it's creating a separation between gov't and markets (****) that would be better for both. It would give the markets more autonomy and independence while better serving the citizenry and gets the gov't even further away from the grubby spending side (where all the politics come from (*****)) and allow the people themselves to dictate the spending.

Why not create a whole series of these entities to make sure that healthcare, education, and transportation are also permanently funded and driven to meet the needs of the citizenry in ways that decrease gov't participation and increase economic growth? And in terms of public health or economic meltdown, it could serve as a blockchain of industries that in times of emergency that could signal and empower each other in the service of public needs, rather than waiting for President Snail to get something done (or better yet: we need to stop pretending like he's the guy that gets stuff done!).

In terms of healthcare, rather than creating a single backstop Fannie Mae-like company, I would suggest a model based on the Federal Reserve. All the banks of the US are linked in an autonomous (autonomous-ish) hierarchy that has a governing board at the top that makes the rules for how all the other banks do their business. The banks themselves are still independent entities but they are linked in a structure that determines their opportunities and responsibilities. Likewise, what if all the hospitals and other healthcare-related entities joined in a Federal Reserve that could smooth standards and practices and even create price efficiencies?

In the current pandemic, much was made over the President's use of the Defense Production Act. But with a Federal Health Reserve, all that stuff would've happened without ever calling the White House. (******) An influx of new cases would signal throughout the healthcare system triggering its own reactions rather than pretending like the White House is empowered to solve this problem. Indeed, wouldn't you rather have a board of public health go to the White House with suggestions of what to do next, rather than the President's own team of political hacks trying to figure it all out from a distance?

Education, on the other hand, would be more like a Fannie Mae-like entity, because it wouldn't actually control any schools themselves, rather it would be a finance mechanism open to the American people to find ways to pay for their schooling. (First off, I'd expand what we refer to as 'education' by first trying to minimize 'schools', which I think mostly stand in the way of a meaningful realization of what it means to be alive; but that's probably a topic for another blog post in the future) In the case of this pandemic, the schools would still be determining their own standards for relating to actual students and a Fannie Mae for education (something like Sally Mae, but not exactly, as I would fund it entirely differently) would be of little impact on public health but could very useful in getting to the heart of the economic impacts of getting everyone back to school.

But a transportation entity may well have been at the forefront in this crisis. As social distancing is the key to slowing down the impact of the virus, a Federal structure that seeks to find the most efficient ways to transport Americans might have been integral to determining how to close and then re-open the society to interaction. When interacting with the Health Reserve, a transportation reserve could've yielded valuable data for vectors of disease and for economy activity.

A housing reserve, similar to Fannie Mae but connected to the citizenry at a granular level rather than a gov't level, would probably play little part in a crisis such as this. Perhaps it could create schedules for rent/mortgage payment that are realistic to the population of people suddenly out of work, but otherwise probably would've had little do with any health concerns.

Yes, we already some of these things. So what I'm proposing would start with restructuring rather than inventing from whole cloth. A housing agency that is open to each and every citizen (rather than just giant mortgage companies), an education structure that works with individuals and families to find the right educational options (rather than trying to stick prospective students with onerous debt repayment as a means of funding the whole system), a transportation structure that prizes efficiency within the need to keep Americans moving and a healthcare system (obviously more complex) that creates efficiencies and opportunities for the citizenry.

How would we pay for it? Congress could create these entities as the repositories of tax dollars. Your taxes would literally go straight into these four entities (which would be a series of regional entities that would be separate and distinct from each other, but interact totally), which would also be free (where possible) to sell stocks and bonds and find other forms of revenue in addition to tax dollars, which are simply there to keep secondary markets liquid (and keep Congress from arguing about details of shit we don't need them arguing over). It could be done--I think it's what the Founding Fathers actually intended! Congress would retain oversight (making the Congress a make backward-looking as opposed to forward-looking body, which would be a huge improvement, I think) and the system adheres as long as Congress keeps re-affirming its own action to do this. Congress can deconstruct it at any time and go back to the old way (of wasting money while fighting over nothing) whenever it feels like this has gone off the rails.

With negative taxation, the work of the American citizenry will continually pump capital back into these structures in the form of subsidies for education, transportation, healthcare and housing that derives from our tax dollars. The American gov't's job is to pour the tax dollars of Americans back into the structures that form our culture and economy and those tax dollars are increased by negative taxation, which allows Americans to redeem their charitable contributions into infrastructure subsidies. Ideally Congress gives up a lot of its empty posturing and focuses instead on finding the practices that best serve the people and the economy. By funneling tax dollars (and investment dollars) into these structures, it makes use of the dynamism within those economies of scale to stay liquid and efficient. We're already doing most of this stuff, perhaps what we need is a cessation of all the other stuff to create a simplified organized system that each citizen can understand and participate with. 

Any system the creates price and energy efficiencies while making sure that Americans have access to systems that provide what they all want and need would pay for itself. Hell, I would suggest that's the only way we'll serve the needs of growing citizens in an economically efficient manner. We're remaking everything in the wake of this quarantine, let's keep the stuff that works and discard the bloated waste.



(*) And because the gov't giving money to a financial entity (like Goldman Sachs, for example) is an investment that may yield more funds in the future (or maybe not), whereas giving money to individual citizens is a cost that is likely just money out. Do you see how that works? "Investment" brings the potential for further economic growth, while "cost" is just money that the gov't no longer has and probably never will again. The trick at the basis of all I'm suggesting is giving the gov't opportunities to invest in the population rather than haphazardly picking up the costs when it all goes wrong.

(**) The obvious exception being our bi-partisan massive military that is funded to the gills and has never failed to find support for whatever it dreams up in the halls of Congress. One difference, though, is that the Military is by its very nature solely controlled by the gov't, whereas not much else in our society is. The problem with all I'm suggesting is that the military and intelligence get way more of the tax dollars than anything else does and unless the Military likes what I have to say, none of this will matter because the military basically has veto power over a massive chunk of public expenditure.

(***) Probably won't be very big. I mean...shit, dude, they're making wool hats.

(****) I've been reading up on the American Revolution lately and I'm newly struck at the significance of the separation of church and state and why the Founders were so resolute to make it happen: because the church is where all the revolution was coming from and after the Revolution, the gov't wanted that shit to stop pronto. And the way to stop it was to marginalize the churches by giving them so much freedom that they'd drown in it. I'd like to see Wall Street, too, get watered down considerably by codifying the basic interactions between gov't and business.

(*****) The politics wouldn't go away but perhaps the arguments would be better directed and less general. People with kids, for example, would be all into Education moves, which would now be made by a separate entity, whereas people without kids no longer have to be bothered/empowered. So those people that maintain these concerns, rather than complaining to/about their Congressman, they can direct their energies toward the economic entities that are actually building that structure rather than the politicians who would have steadily less control over it.

(******) Indeed, I would suggest that's how it happened anyway, Trump never actually needed to do anything--and I don't think he actually did. This story is a function of a media structure that wants to paint the world in its own way to please its listeners/followers/readers/etc, rather than an actual appraisal of the gov't in action.

Saturday, April 18, 2020

Military Expenditure Toward Healthcare

A quick American history lesson. The 1st Continental Congress met in 1774 to form a colonies-wide protest to the British passage of the Intolerable Acts, which was a response to the Boston Tea Party of 1773. That original Congress produced merely a statement...that no one paid any attention to. But the 2nd Continental Congress met in 1775 and the beginnings of a true organized revolt against the British Crown was pretty well underway. Why the differentiation between the 1st and 2nd? The 2nd Continental Congress included all of the original 13 states and thus can rightly be considered the origins of our current federal gov't, but the 1st only included 12 of those states and so is not exactly the same as the 2nd. That said, the 1st and 2nd were clearly from the same source and built around the same causes, so separating the two isn't really necessary save cosmetic differences. (*)

After the Revolution had been fought and the British were vanquished, the Continental Congress ushered in the Articles of Confederation and from 1781-1789 sorta goes to sleep.  It's there, it's doing stuff, it meets regularly--and yes, there were Congresses and Presidents before 1789--but it is really more of a placeholder for a gov't than an actual gov't. The Constitutional Convention of 1787 is where we got our Constitution, our Congress, our President and our Supreme Court. (**) And in 1789 the 1st United States Congress meets and George Washington is inaugurated as President (***).

Though the time from 1781-1789 was something of a dormant period, it was in 1784 that our modern Army was founded, though initially it was rife with mutiny as the Congress was bankrupt and offered little way by way of regular funding. But actually the Army created by the 2nd Continental Convention in 1775 never went away and though it was re-created in 1784, technically it was still the same Army that was there at the beginning of the Revolution. So the modern Army predates the modern Congress. While the argument could made that Congress goes back to 1774 and the Army goes back to 1775, realistically our Congress goes back to 1789 and in 1789 when the 1st Congress met and the 1st President was inaugurated, the military was already there at the disposal of the gov't.

The military, then, is primary and the construction of our constitution has the military in mind throughout. The President's first order of business, for example, is to be the Commander-in-Chief of the military. Think of it this way: the Military is the wild animal, Congress pays for the cage it lives in, the Commander-in-Chief feeds and waters the animal and tells it what to do, all of which is agreeable to the Military as long as the Congress and President are popularly elected. (****) Add in a Supreme Court (to adjudicate claims between the citizens) and a central bank (to finance it all) and--voila!--you got a political economy that has some real teeth to it. But make no mistake: it is the Military that gives the Congress credence, without it no one would give a shit what a room full of old white men wearing wigs thought about anything. It is the monopoly of force that makes our gov't a gov't--and in our case the force was there before the gov't was.

So the real branches of gov't: 1) Military, 2) Congress, 3) President, 4) Supreme Court, 5) Federal Reserve. Smoothly drip over 50 states with their own legislatures, executives and judiciaries, even their own militias (but no central banks, just not central enough at the State level), then trickle down through the city and county gov'ts and courts (and police forces?) within each State and that's America, buddy.

Why do I bring this up? And why did I put the Military at the top? Is it because I love guns? No. It is that the Military already has all the money and is the only truly bi-partisan supported institution in our nation (*****) and deep down is every bit as much of our makeup as the Presidency or the Congress. If you want the gov't to do something, you're probably gonna need the Military on board. And when you can convince the Military it wants it, too, then you got some sweet action.

Covid-19 has shown us that on occasion we will need emergency procedures and crisis management, above and beyond what the day-to-day gov't itself can (or should) provide. Realistically the Military is going to be the source of all that. You can be queasy about giving the Pentagon too much power or you can embrace the notion that militaries all over the world are on the cusp of the transition from war-making functions to life-saving functions. Medical triage, rapid response, emergency procedures, and search and rescue will be needed to combat floods, earthquakes and hurricanes, too (******). These skills will only be needed occasionally but when we need them, we need them to snap into action pronto. Really only the Military with its national security mandate (and virtually unlimited budget) will be able to perform those tasks.

I'm ready to see the Pentagon move away from weapon development and get back into investing in its citizen assets for the purpose of increasing our capacity for emergency preparedness and to bolster the labor market for a move toward a service-driven healthcare economy. What this virus offers us is the time to do that, as all the other peoples of the world realize that's what they need their militaries to do, too. Developing weapons systems is something we do to outspend our adversaries (yeah, truth be told, we develop ever more expensive weapons solely because we can and our enemies (probably) can't). We can afford systems other countries can't even dream of and that's fine, being dominant in that field is what all the most powerful nations of history possessed. But right now an ethic of life-saving rather than war-making should emerge as nations stagger back into the sunlight.

How do we make this happen? I dunno. What kind of medical and search-and-rescue programs can the military offer? I dunno. I suggest we find out. Realistically the Military can reshuffle a little here and there in its medical personnel, but the massive outlays of capital I'm suggesting would be better served going to colleges and universities. So how can the Military partner with educational systems to ramp up the sheer amount of Healthcare workers? I dunno. Perhaps the Military designs 2 or 4 year programs whereby the GI bill will cover more medical training or something. I don't know how that shit works, but my instinct is the Military can figure it out, has the need to do so and the funds and mandate to pull it off. It's less about training more doctors (though that's not bad) and more about widening the training of emergency service providers and first responders.

Perhaps even multiple levels of doctoring: it takes 6 years of med school to do x/y/z but perhaps it only takes 2 years to be certified in a/b/c. Perhaps we should establish a series of certifications and qualifications leading up to doctorhood that can employ people (at least in emergencies) who haven't achieved maximum educational status. Perhaps it is in separating the many various functions of care rather than seeing Healthcare as one giant indivisible mass. And, for god's sake, we've got tone down the liability of medical providers. Ladies and gentlemen, you have to give medical workers the opportunity to save your life! Suing for gross negligence or continually bad practices is one thing, but suing an aid worker that made an honest mistake or just wasn't able to save your dying uncle is not what our courts need to be concerned with.

The coming boom of healthcare workers would create more opportunities in the industry as a whole and I don't say that under the thought that the supply will create the demand. In healthcare the demand is universally latent and permanently under served--indeed, that's the whole libertarian argument against nationalized healthcare: the demand curve never goes down and the supply curve can never match it, therefore paying for it is utterly impossible and doomed to fail while bankrupting the nation and in the end providing no worthwhile healthcare and satisfying no one. I'm not talking about a Healthcare system that tries to accomplish that impossible task, I'm talking about a Healthcare system where all citizens receives more square one level of attention (giving the data analyzers more than enough to work with), which will require a lot more people with square one kinda skills. I'm talking about a nationwide resurgence of Boy Scouts and Girl Scouts really but with a Pentagon-size budget behind it.

Do I worry about an oversupply of medical professionals? I do not. And I'd love to see the Pentagon use their massive budget to try and prove me wrong. I bet you a dollar training a shitload of extra medical and emergency personnel will not be a waste of money. How to accomplish this? I don't know but pouring Military money into colleges and universities with the purpose of producing more healthcare workers at every level strikes me as the place to start. Perhaps creating a division within the Defense Department that keeps the practice ongoing is the key.



(*) The Stamp Act Congress of 1765 and the Albany Convention of 1754 could be considered antecedents of our gov't but don't have the same makeup or underlying intentions as what we ended up with, so they are better thought of as examples of the larger evolution toward a general sense of political culture rather than as direct lineage of our current gov't.

(**) It also gave us a central bank but that original bank was drowned in the Potomac during the Jackson administration. Our current Federal Reserve is an altogether different beast from what the founding fathers imagined in 1787, but we did end up with one the way they thought we would, right?

(***) In 1789 everyone ignores the Supreme Court because all through the 1790's it was a shit job that nobody wanted. It isn't until Marbury v Madison of 1803 that the Supreme Court even begins to see a proper role for itself. Under the Chief Justice-ship of John Marshall from 1801-1835, the Court rounds into something that would look familiar to contemporary Americans. But it took a while for that third branch to grow.

(****) As the military possesses its own justice system, the Supreme Court actually has very little oversight in how the military operates and functions, outside of affirming the Congress's power of the purse and the President's standing as commander-in-chief. One could argue that modern courts are just extensions of ancient military tribunals, but in America's case, it was hundreds of years of English common law that formed the backbone of our judicial practices. So though I'm trying to show the primacy of the Military in the Federal Gov't, I don't see that as contributing much to our judicial side.

(*****) Well, maybe college football. Hey, there's a lot more state funding there than you probably ever bothered to notice.

(******) Political rallies (sometimes referred to as "riots"), on the other hand, should be left off of the Military's emergency purview. Amassing troops to keep crowds from performing wanton acts of large-scale destruction might be okay, but anything short of that is something the Military should instinctively avoid. Protecting, say, the POTUS or Supreme Court Justices from physical retribution is not the Military's job and not a task the Military should even consider. I'm okay with the Military protecting buildings (the White House, for example) but not individual people (POTUS has his own security force, he's somebody else's problem).The emergency powers I'm talking about would be reacting to purely act of God-type stuff, nothing political in nature if for no other reason then your Military is made up of normal citizens, their passions and persuasions are not so easily banked upon and keeping their directives as clear as possible is a necessity in the Miliary. The Military should avoid the politics of the people and stick to saving lives and protecting borders. Soldiers firing into a crowd....do you know the story of Christopher Seider? (Personal aside: If a domestic mob can only be stopped by force of arms, then it probably shouldn't be stopped, as the only thing that will stop it is genocide. Thus, pointing your military at your own populace is merely suicidal whether in the long run or short)

Friday, April 3, 2020

Data is Surplus Value

Data is what the political economy wants from us and data is what we have to offer.

My problem with the digital world where corporations (Facebook, Google, Amazon, Apple and Microsoft at the top of the list) know everything there is to know about me is not that they're out there compiling this info. It is that they don't share the info with me!

Why am I not allowed to know this stuff? Why is it easier for a faceless data-collecting corporation to learn more about me than I am allowed to know about myself? If this info about me can be harvested, then don't I have a proprietary right to that information? Shouldn't all pertinent info about me be made available to me?

I listened to a lecture the other day where a cyber-security expert talked about Equifax (a credit score company) getting hacked by the Chinese in 2017. Yes, it is a shame and a crime that the Chinese now have this information about me--but, shit, man, I never asked Equifax to compile the information about me to begin with! Before I take my revenge on China, shouldn't I sue Equifax? (*) Have you ever gotten a credit report? They don't ask questions about you, they tell you things about you. Things you may have forgotten, things you may not have ever known. They are merely grabbing the info that is out there about me, creating a profile of me and doing so because the banks are greatly benefited by knowing this about me. But why don't I know about me? Why don't I get to see the benefit of that profile?

I'm not cool with the Chinese possessing my data, but how cool should I be that Equifax possesses this data? Why should I be beholden to Equifax to learn about myself? They're, in a sense, making me pay for a service I did not invite them to take up...isn't that extortion? They're not providing me with a service--the service they're providing isn't for me, it's for banks and other lending institutions--instead they are holding me hostage for a payment. This data is worth something to someone, why aren't I benefiting from it? And why didn't Equifax do a better job of protecting me from hackers? Why are they giving this information to foreign spies and not to me?

As workers, we must seek and demand the highest possible return on our labor and on our surplus value. We must demand that our gov't work with us first to receive our share of the work we perform before it goes to other entities. If my financial data, for example, is valuable to someone, it must first and foremost be valuable to me. If it is a source of revenue, then let that revenue be captured by me.

How we work (make money), how we live (spend money) and how we look to the future (save money) are the fullest and highest expressions of our citizenship. It is how we will spend the bulk of our time, it determines the forms our education will take, determines where we will live and serves to shape the peer group we will run with. Our ability to work, to make money, permeates every decision of our lives (even when we don't realize it). The American gov't was constituted to provide protections and guarantees based on property rights, due process and many enumerated freedoms. The Constitution's implicit pledge to honor the Declaration of Independence's desire for "life, liberty and the pursuit of happiness" is our bond as a nation.

I worked for a year in a call center signing people up for Affordable Care Act insurance (you probably remember it as Obamacare). I saw people getting great deals, life saving deals, and I saw people paying way too much for something they probably didn't even need. (**) I bring this up not to talk about healthcare but to talk about taxes, which eventually for me became a well worn speech: look, man, you can put down whatever you want for your projected income, you can collect whatever benefits you think you deserve, but on tax day your income will no longer be "projected" and on that day the gov't will decide what you should have received last year (meaning this year, right now). If you did worse than you thought you would, you might get a refund; if you did better, though, you will owe money, your subsidy will be deemed as incorrectly received and you will pay extra. And the gov't reserves the right to not give a shit if you didn't know that. (***)

There you go: the citizen's primary interaction with gov't is taxation. The bad news is this is one place where the customer is never right, the gov't knows what it wants from you and it will get it one way or another. The good news is when the gov't decides to tax you, then it takes an interest in you (****) and frankly it behooves the gov't to maximize your economic power because the gov't's larger interest is to maximize its own economic power. So far the American gov't has more or less allowed others (re: corporations and landlords) to maximize your surplus value, to harvest the potential revenue away from you, probably because it assumed these institutions driven to rent-seeking will do it better than the workers themselves. But I would suggest the best way for the gov't  to truly maximize the citizenry's potential is to maximize the freedoms you have as a citizen to make money, spend money and save money precisely as you see fit (outside of violence and fraud, of course). Taxation is also the source of subsidy, which I would suggest would better be thought of as negative taxation: your return from the gov't is completely dependent on your income (or ability to produce income).

In the form of negative taxation, you can receive subsidy from the gov't for your surplus value, just as with health insurance. The time you spend time working within NGO's, charities and non-profit institutions can be redeemed in the form of lowering your tax obligations and eventually putting a lot of ordinary citizens into negative taxation, meaning they would receive money back from the gov't for working in non-profit organizations.

Does the gov't benefit from this? Yes. A lot of dollars accumulated and re-directed by the gov't will no longer be needed because more citizens would be performing those tasks within their communities, generating the benefit locally rather than federally. Does the economy benefit from this? Yes. More people will be entering the workforce, even if the only compensation is subsidy from the gov't. How does the gov't deliver this subsidy? In the form of capitalizing GSE's that would take up the task of making sure certain industries (healthcare, housing, education, and transportation) would be fully functioning in a manner to serve the needs of the populace first and foremost. The gov't would be pumping money back into the economy--not by incentivizing banks with low interest rates--but by investing in workers and their communities by making sure that the necessary functions of society are well oiled. Does this limit for-profit enterprises or the citizens that want more of a professional life? No, indeed this should separate the go-getters from the masses even more, giving them more opportunity to innovate with less deleterious impact on the necessary workings of the society.

Negative taxation becomes a way for the gov't to help finance non-profits and charities with a great deal of excess labor. The good orgs will know exactly what to do with the extra help, the bad orgs will not and will shrivel away (*****). So at this point it becomes very much in the gov't's interest to separate the worthwhile charities (like, say, programs that get food to the elderly) from the ones that suck up capital without giving anything back (like, a lot of deadbeat churches that perform no worthwhile function)  Yes, churches that do stuff in the community can maintain their tax-exempt status--as can all charities that perform in their communities--but the churches that just pretend to preach a gospel can devolve into Facebook groups where they belong and be forced to pay just like everyone else that wants to live in the real world.

Supposedly a couple of the items in the recent giant Congressional emergency financial package recently passed were 1) the establishment of a digital currency (I mention this only in hopes that I will return to the notion in a future post) and 2) the Federal Reserve offering each citizen it's own account, which is an idea I heard floated for the first time in a podcast last week--I've been kinda riveted by the notion ever since I first heard it and pleased (******) that it was a part of the Congressional action.

Having an account with the Fed means they can literally guide you through every financial choice you make from birth (I'll come back to that) to death (I'll be coming back to this, too). It can help you maximize the value of your consumer spending (especially for education, for example), maximize your savings (I'll be coming back to this one, as well) and your purchasing power. There are any number of things the Fed could help us with (ditching Social Security for an actual retirement plan, would be a great start--I'll definitely be coming back to this one) but first and foremost they can guarantee all of your economic holdings (so long, FDIC, don't need you anymore), at least in the form of bonds, commodities and digital credits and provide a true credit score that is backed by the bond of gov't--rather than a shadowy corporation that I ain't never heard of (like Equifax--they got hacked by the Chinese, did you know that?). The power of an individual account with the Federal Reserve is huge and can be the basis of a whole new citizenship.

The last post was about healthcare--it all starts there. For now I'm going to move on to a pile of other things, that should come back around to healthcare--because it all ends there. But it seems to me that negative taxation is an economic bond the gov't can develop with the citizens to build a whole new world of charitable giving that goes beyond just writing a check at Xmas time. And redistributes wealth from birth without interrupting the larger economy that all of this is based on. Readjusting our individual identities starts with labor and the gov't can expand that very quickly in a manner that pours reinvestment back into America's communities by rewarding citizens to do it themselves.

It begins with data and my plan is about designing a comprehensive digital citizenship that keeps you in touch with your data (what Sartre would've called your facticity) and maximizes the individual citizen's ability to capture their own surplus value, which is to the benefit of the macro-economy. This isn't a function of government, it is a function of technology: digitization allows for us to know a lot more a lot faster. This is good for those that understand it and dangerous to those that don't. So let's help the citizens understand it: data forms our new identity, negative taxation allows the citizenry to capitalize on good works and GSE's create the sub-economy where the gov't can reinvest in the basics of society.

Charitable labor is a giant untapped reservoir of wealth and redistribution. But the first step is for each citizen to understand their own impact, their own power, their own facticity in manner guaranteed by the gov't as a fiduciary (rather than a corporation that is predatory).



(*) Shouldn't we all be suing Equifax? Your dumb fuckin' gov't let them get away with this with basically no penalty! What the fuck, dude? Where is our outrage?

(**) The really sad cases were the ones that fell between the cracks: too broke for ACA, not broke enough for Medicaid. Yeah, dude, I fuckin' cried on more than one occasion. All we could do was suggest community health centers in their area. The calls generally didn't last more than 15 minutes but you could get pretty deep in people's lives very quickly filling out this form. The desperation of the people that needed something and weren't gonna be able to get it, even in the face of this unique opportunity of Obamacare was genuinely heartbreaking.

(***) A mantra of mine for quite some time: the gov't was here when you were born and it'll be here when you die. It ain't worrying about you. Indeed, notice I'm couching all of these possible changes in the notion that the gov't will actually benefit greatly from its citizens being more plugged in.

(****) Look at Saudi Arabia. The people don't pay taxes, which sounds nice, but it means they have absolutely no say on anything their gov't does. When the gov't wants a highway, the people get a highway, but not until the gov't needs one (which is *ahem* pretty much how we got our highway system, too).

(*****) "Good" and "bad" in this sense, unfortunately, does not mean the orgs that do good work. Instead it would incentivize the popular personalities that lead the orgs to be more instrumental in directing labor and capital flows. For example, I can think of an entity in my own community that is headed by a beloved man....that totally sucks at his job. Everyone loves him because he is a truly nice guy but his nice-ness has not overall benefitted his organization. It behooves us as citizens to reward the people that are doing the good work and not simply those that look like they're doing good work. That's on us, people. The gov't in this case will likely make the same stupid mistakes that we do. But as the universe of data opens up to us, we'll get a clearer picture of which orgs work and which ones don't.

(******) "Pleased" meaning optimistic. I've never been optimistic about anything Congress has ever done but I do think this could be a hugely positive development for Americans.