Power and the populist

Posted on 30 August, 2021 by alloporus

Photo by Alejandro Cartagena 🇲🇽🏳‍🌈 on Unsplash

Talking about the ‘man child’.

Sometimes conversations just meander along into some interesting territory. Here is one between myself and my buddy Chris in July 2020 prior to the US election and 6 months into the pandemic.

Good morning, Chris.

How are you doing?

We have to stop meeting like this people begin to talk.

They do already. So until we grow up and become a republic we have to put up with foreigners interfering in our democracy… Seems to be the news this morning.

I get all of this reporting about the Royals and everything, but they are just the law under themselves. Mind you they always have been news, for centuries literally.

They are just celebrities now, aren’t they?

They are now but they never used to be. Not so long ago it was the power struggle, the wrestling around of power. That’s really what gets people off once money is no longer an issue then it’s all about the power.

I mean you can see that with our own Malcolm Turnbull, you know, there was nothing he would gain from being Prime Minister except some feathers in his cap and maybe a place in history. He’s already worth 150 million bucks or something so he doesn’t really need the money. It’s about the glory and the power?

Yeah, and you wonder what people get out of that it obviously drives so many people. I mean, I think power drives people in business more than profit. In my experience, the people in charge of businesses are there more because they like to be in charge than they are to make profit for shareholders.

Hmm… I get the ‘in charge’ thing.

It’s seductive. No question.

I guess power is what’s really there but what’s the power for in your particular case? I can see the difference between, I don’t know, Gandhi and Donald Trump, they both want to influence people. But very different circumstances that got them to be leaders with very different styles. Gandhi was obviously not in it for the glory or maybe was I don’t know. We certainly didn’t gain anything material out of it.

No, but that’s what I think I’m getting at. I think it’s these people like to be respected and you get that in a position of power. Almost by definition you’re respected because empowering at the end of a gun is respect of some sort or another even if I respect you because you could take my life. I don’t respect you for your moral high ground. I respect you because I’m s*** scared of that AK-47 you’re holding.

Yeah.

So power is the thing, isn’t it?

And we talked about that before, the difference between the sort of positional power and personal power and maybe that’s you know, Trump has no personal power but he’s craved it and so he’s got himself positional power.

I think that’s a good summation of him. It’s why the media like calling him a man child because he is.

Hmm.

This is a bit of a diss to children because children can be quite pure and Trump is clearly not pure but he is an emotional child. No question that he hasn’t grown up at all. What he does is all for that sense of power in himself. Not from what the presidency provides. I remember when I stood in front of the White House on a visit to Washington and thinking ‘this is an interesting place, you know, it’s kind of locked away’. You can’t get at it, you know. Inside of that place, it would be easy to maintain a small army of sycophants just you just prop you up. And if you have no sense of what you’re doing for the other 350 million people in the country it doesn’t matter.

Yes and every utterance that army of people coming out to say what he really meant was ‘blah’ to clean up his mess.

Yep. I was thinking about the 20,000 lies. That’s one every 90 minutes of his tenure. It’s kind of phenomenal, isn’t it?

Is it in the Guinness Book of Records?

An untruth every 90 minutes of his tenure ought to be.

But Kaylee will never lie to the press

Except she does it every day.

She mops up his s*** that is just spread everywhere. But yeah, I mean he’s crashing and it’s really interesting to hear Biden talk about making steel for wind generators and jobs in renewable technologies, battery cars, which out of America just seems like just crazy talk, you know.

But in a way, it’s an obvious platform, isn’t it? Because their problem is that they lost last time because Hillary was considered to be just more of the same, right?

Yeah, she was.

Right? So he’s got to be different this time around. Otherwise, they’ll lose again only he’s not because he’s an old white man?

Agreed, he’s just from the same, Central Casting that produced Hillary.

Exactly. And ironically she was probably a better candidate from that mould.

Yeah, she probably was. Certainly, she was more in touch with her sensibilities because Trump is losing his but yeah, it’s interesting that Hillary was more of the same, but the public chose a scenario worse than that.

Yes, it is extraordinary, isn’t it? Populism might have a short life though. COVID-19 is really sorting them out. I mean all of the populist leaders will be found wanting if they try to be in charge of this virus which will just tell them to stuff off.

Yeah, you can just see it because populism requires you to be popular and so you have to say popular stuff like ‘the stock market is rising’ and ‘interest rates are great’, ‘jobs, jobs, jobs’. And, of course, you have to say that freedom is important and all the other things that are popular. The last thing is to tell people to stay home and you have to shut your business.

Ouch, very unpopular.

It obviously isn’t gonna work for the populist style.

Except you only need to be a bit popular. Remember Margaret Thatcher won less than 40% of the vote or whatever it was. A tiny majority that gets you over the line. Just learn the system you’re in.

Hmm and maybe Biden has to talk green new deal and the like because he needs the support of his side of politics who are going there.

Well, he has to lock in his core base too. Democrats have to get out of the house, brave the virus, and go vote. That’s always their problem. Turnout in numbers and they win.

Yeah. Republicans have said it. If everyone votes we don’t win.

That’s right, which is probably why they don’t have compulsory voting.

Yeah, and why they play all sorts of jiggery-pokery with booths and where they are and how many there are and when they’re open and whatever…

Yep. Yep, illegal, illegal.

Well, you need and all that stuff when it’s all about manipulating the vote.

To bring back the man child!

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Military spending

Posted on 28 August, 2021 by alloporus

Photo by Diego González on Unsplash

Imagine a bizarre military coalition between China, India, Russia, United Kingdom, Saudi Arabia, Germany, France, Japan, South Korea, Italy and Australia.

Between them, these countries spent $762 billion on their military during the lockdown year of 2020. This is 38% of the global military spending that was nearly $2 trillion in 2020, a 2.6% increase in real terms on 2019 according to the Stockholm International Peace Research Institute (SIPRI).

Such an unlikely alliance would be a formidable adversary. There is not much firepower left in the world to go up against such a combined military force.

However, there is one potential adversary capable of taking on such an alliance, at least in terms of military spending.

At $778 billion, the United States accounted for 39% of total global military expenditure in 2020.

Break down this colossal expenditure by country and the US outspends its nearest rival, China, by three times and spends an order of magnitude more (10.6x) than the next nearest rival, India.

It is hard to see China as the aggressor when these numbers are in the frame. Especially when the disparity between the US and the rest has been going on for decades.

Naturally, the west is grateful for access to such muscle.

There is little doubt military might has been a deterrent, especially when combined into collective defence. For example, NATO, the North Atlantic Treaty Organisation, is an intergovernmental military alliance between 30 European and North American countries to implement the North Atlantic Treaty that was signed on 4 April 1949.But the collective defence NATO countries enjoy is thanks to the US paying for most of the expense.

Such generosity is remarkable. If only it was altruism.

Better use of military spending

Clearly it is hard to put aside advocacy by the military men who are passionate about the need for big boy’s toys deterrent, the wealth creation from such a large military machine, and the influence such apparent generosity buys the US in foreign affairs.

There is no altruism, just some history in being the big cheese combined with social and political advantage from staying ‘strong’.

All this is not confined to the United States.

Australia has a fraction of the population of the US and a puny US1.4 trillion GDP that cannot even touch California (US3 trillion in 2020). Yet the government can spend US$37 billion on French submarines at a cost of US$1,500 for every person in the country.

Everyone is in on it.

Maybe there are better ways of mobilising the fraction of GDP that becomes government spending.

How about a Universal Basic Income?

Recent research shows that an annual payment to all Australians of A$18,500 a year (US$13,500) would cost the taxpayer roughly A$126 billion a year or A$20 billion that the current cost of unemployment benefit and three times the current defence budget.

It would need an unpalatable jump in the overall tax rate from 28% to 34% to pay for it.

But the A$20 billion more than the current payments to the unemployed is just half the military budget.

Maybe it is more about priorities than absolutes.

But as this ramble began with the extreme US military budget, this is the point. Does the world need to spend so much on deterrents and does one country need to overwhelm the rest?

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Death and taxes again

Posted on 2 August, 2021 by alloporus

Photo by Grant Whitty on Unsplash

The theme of death and taxes we gave an evidence argument in a previous post. This one is about the hip pocket.

As a private citizen in Western democracies, you are certain of two famous things: death and taxes.

Except for those independently wealthy, to survive in the system you have to earn income and that income is taxed. Modestly for low-income earners and at a greater proportion as your remuneration grows.

This ‘work for money that is taxed’ keeps going until the inevitable happens and your body can’t fight entropy anymore.

Would you rather pay $20,000 or $1,000,000 in tax per year?

The weird part of this is that, after some thought, most people would be more than happy to pay a million dollars a year in personal income tax.

Obviously, it would mean that earnings are high enough to spend at least 10 grand a week and still have change. Compared to the low-income individual who plays $20,000 a year in tax, your bum is in the butter.

Similarly, a business paying tax is a good thing.

Corporations have many more ways of avoiding the tax dollar than the individual, but the reality is that net profit after tax, NPAT, where profit is the operative word, is the objective of the business, the reason it exists.

The company will have directors who, should they fail to maximize profit for their shareholders, risk prosecution. That NPAT number, the profit measure should be as high as possible.

A business not declaring a profit is very creative in its accounting or has previously made losses or isn’t a very good business.

Either way, the shareholders are not too happy if profit is not declared because that is their reward, their dividend for risking their own hard-earned to invest in the company.

Once the accounting smoke and mirrors are over, paying little to no tax is not a good thing.

Taxes benefit everyone

All this preamble comes before any moral argument about whether or not taxes are for the public good.

Remember that tax pays for collective benefits: roads, schools, police, defence plus a whole raft of services and structures that are hard to pay for as individuals, but that benefits everyone.

Tax is an integral part of the modern democratic system. It supports the social structure and a whole chunk of individual well being. Drive out of your front gate and you benefit from the tax dollar as soon as you hit the tarmac.

Without a tax system, we can say goodbye to the current quality of life that we enjoy. Arguably there is a moral obligation through the social contract for all legal entities and individuals to pay their way.

What is a fair share?

A fair share of tax is designated by the policies and the politics of the day.

And sure there’s no reason to pay more than your fair share according to the rules. As long as the tax system is equitable then everyone at some point in the process will have benefited from the taxes that they’ve paid. There should be a certain pride in paying tax toward the public good.

So to claim that you’ve paid no tax. Or to even hint that such a thing is good does not stack up in any sensible argument.

Paying no taxes as an individual means that you’re either at the very low end of the income scale in need of support or you’ve diddled the books somehow and claimed payments or shifted money around to avoid paying your fair share.

If a company pays no tax then at some point in the process the business has failed to disclose a profit or manipulated the books to sail very close to the wind and, again, avoids a fair share.

There is no doubt that corporations do this. They use all sorts of systems and hire expensive lawyers and accountants to move money around to avoid paying tax and one of the things that society has struggled to do is to reign in that avoidance behaviour.

But when no tax is paid for a very long time then the company is poor at what they do or they’re extremely good at dodging their fair share. Which even if it’s not illegal has certain moral nefariousness.

The graph below can speak for itself.