Austerity, a Set-up for Pilot Error

On February 12, 2009 Colgan Air Flight 3407 crashed into a house in suburban Buffalo, N.Y., killing 50 people. Eleven minutes after take-off from Newark the crew noticed ice buildup on the plane's wings and windscreen and turned on the de-icing system. The flight continued on autopilot until the final approach when the aircraft's "stick shaker" sounded a strong warning that the aircraft's speed had deteriorated to a dangerously slow rate. Instead of following standard procedure of adding full throttle and lowering the plane's nose, the captain added only 75% power and raised it. This caused the aircraft to pitch up 31 degrees before diving at 45 degrees into a home near Buffalo.

The pilot meant well. He did not want the plane to go down, so he turned its nose upward thinking he would prevent a crash. He was wrong -- tragically wrong. He needed to burn more fuel, expend more energy. Had he gone full throttle and pointed the plane downward, he could have gained the necessary speed to recover from his dangerous stall.

Why did the pilot fail to realize that by raising the front of the plane he would further decrease its perilously low speed? The answer is simple. He lacked competency. Regional airlines practice austerity. To cut costs, the airlines' owners hired cheaper but less knowledgeable pilots. Pilots who lack training and experience cannot fly safely.

To perform any given task, a plane needs to consume energy. Just as a commercial aircraft is a system that cannot function without consuming fuel, a nation's economy cannot remain in good health without money. A plane will no more take off from a runway with an empty gas tank than an economy will pull out of stagnation without money. As Konrad Lorenz stated, "Money is the symbol for energy." People need to get paid to make a living, and if they get paid well, they will live better. Once their standard of living increases, other members of society benefit because with a higher standard of living everyone can afford to pay for services, which in turn gives an additional boost to the economy.

So what about austerity? As with the example of the regional airline's plane that crashed because the owners did not cover the cost for proper training and maintenance, austerity is a set-up for performance failure. Austerity brings with it lack and suffering, and stifles creativity. When people are perpetually worried about how to pay their bills, they lose confidence. Money is necessary for good morale, and good morale is a pre-requisite for good work, good health, rejuvenating play and the kind of expansiveness that makes a society prosper.

Who can supply the money? Where would it come from? Only from tax revenue from sources that are not already oppressed by austerity measures. Look for money among the likes of those who put up millions and millions to bid up art works for little other purpose than to increase their own net worth.

My Favorite Joke (at this Time)

Q. What is your favorite joke?

A. In New York, a hungry guy stops at a hot-dog vendor's stand. The vendor asks him, "What will you have?" The guy answers, "A dog with everything on it." The vendor puts mustard, relish, ketchup etc. on the dog and hands it back to the guy. The guy hands the vendor a twenty-dollar bill and gets ready for the next customer. Before even taking a bite, the man asks the vendor, "Where is my change?" The vendor replies, "Change comes from within…"

Q. Are you sure this is joke? I can't see myself breaking out laughing.

A. Not all jokes will make you laugh out loud. Some will only want to make you scratch your head.

Q. So you are insisting this anecdote really is a joke? Or are we dealing with nothing more than a bit of nonsense?

A. Maybe. But not everything that appears to be nonsense is nonsense. When I first heard this joke, I certainly didn't laugh out loud, but something registered in my feelings. The vendor's reply seems crazy, but you cannot help having that second thought that underneath it all it is not that crazy, that at some level it does make sense.

Q. So what kind of sense does it make?

A. I don't want to answer this one. Explaining a joke kills it. You get more out of this one if you let yourself have that second, third, fourth, fifth and so on thought and see where it takes you.

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Debunking the Myth That Only Private Industry Can Bring Economic Recovery

Conservatives don't want the government to stimulate the economy because they claim that only private enterprise can create a recovery. When progressives point to the New Deal as a successful way of ending the Great Depression, conservatives claim it didn't really work: it was World War II that ended the depression.

The massive unemployment plight did indeed end when men were drafted into the military. As so many of the men were away fighting a war, women who had never worked outside of the home helped keep American factories going. Worries about keeping or getting a job simply vanished after the attack on Pearl Harbor.

So was it private industry that put the country back on its feet economically? No, it was the government that created jobs by asking private companies to produce whatever was necessary to win the war. Yes, private companies manufactured guns, planes and tanks, but the decisions of what resources to apply when and where were made by the Roosevelt administration.

Were corporations allowed to make profits? Yes, but only within reason. Getting rich from the war was generally condemned as "war profiteering." In 1941, then Senator Harry Truman began to travel from coast to uncover corruption on the part of companies involved in war production. President Roosevelt made sure that the government had the money needed by imposing tax rates of 92 percent on incomes over 100,000 dollars (which would be about 1.2 million in today's monetary value.)

The leadership that guided America through World War II, the country's greatest challenge in history, was not the management of a corporation but a government headed by Roosevelt and then Truman. It was under a democratically elected presidency that victory was achieved. The person holding the country's highest office was not a private individual running a corporation, but an elected official accountable to every citizen of the nation.

In the minds of some it may be acceptable for corporations to rule the U.S. if not the whole world. The recent decision by the U.S. Supreme Court that corporations are "persons" may even make it possible for them to wield such power legally. But these persons, having neither body nor soul, will never have the wisdom demanded of human beings qualified to lead the people of a democracy.

Once the war was over, the American economy, no longer fueled by war production, had to be kept from relapsing into pre-war depression. It was the Truman administration's resolute implementation of the Marshall plan that made it possible for the U.S. to have a prospering post-war economy while helping Europe and Japan rebuild what was destroyed in the war. America with its vast industrial base was able to supply the goods and services Europe and Japan needed to rebuild. With a steady demand for U.S. products, America's economy prospered for decades to come.

Austerity is Wrong: Austerity Is Toxic for the Health of the Economy

(This is the body of a letter sent to our Congressman, Xavier Becerra. Xavier Becerra is one of the twelve members of the Supercommittee on Deficit Reduction.)

Austerity moves in the United States and other parts of the world are counterproductive to economic recovery. Austerity takes away money from the middle and working classes, as well as from the poor. If you want to stimulate the economy, you don't take money from people who produce, create and consume. When money is taken away from the middle and working classes and from the poor, money is taken away from the productive segment of the public; the economy rather than being stimulated is ground to a halt. A severe depression will result.

Whereas money in the hands of the wealthy for the most part rests in idle holdings and does little, if anything, for the benefit of anyone.

Representatives sincere about the well-being of the American people should realize that the only motive for the implementation of austerity measures on the part of conservatives is to create economic failure, so that the current administration can be blamed and so that they, the conservatives, can assume power during the next election.

Myth is like Math

Q. How do you define a myth?

A. Basically a myth is a belief system that explains any given process or phenomenon.

Q. What comes to mind are the stories of Greek mythology where phenomena in nature are personified.

A. Yes, God is personified as the ultimate father figure, Zeus, and the Earth is personified as the mother figure, Juno. And there are many others like Aphrodite who embodies sexuality, or Mars who stands for war.

Q. So myth is the means for humans to understand the world. Could one say that myth is an essential element of religion?

A. Yes, it is. But it is not limited to religion. In the Judeo-Christian context, a central belief that can be classified as myth is "Obey the ten commandments and you will be rewarded." In the domain of commerce there are myths like "you cannot go wrong buying real estate", or "in the long run you are always best off investing in the stock market rather than staying in cash."

Q. Don't you think it might be a bit offensive to many religious people to refer to the Ten Commandments as myth?

A. Yes, but only if you use the term myth to imply something is untrue or worthless. No myth is in and of itself true or untrue. Like formulas in math, myths designate abstract elements and their relationships to one another. The truth contained in math may indeed be something untouchable. It is possible to prove the correctness of an algebraic equation within the domain of mathematical relationships. But the question of a formula's validity comes up when applied to situations in the physical world.

Q. I don't quite get it?

A. Take the example of two engaged in a conflict. One has a team of twenty-five lawyers and his opponent has only himself and his partner. According to arithmetic, the one with a team of two has no chance against a team of twenty-five. But while the truth of math that 25 is "more" than 2 is unimpeachable, when the formula is applied to a given reality, the result of the interaction may appear to invalidate the underlying mathematical principle.

Q. But it does not really!

A. You are right. The mathematical statement assumes that any one of the numbers is exactly the same as any other, but when applied to reality each individual unit is in some way different from any other unit.

Q. Okay, that's math. What about myth?

A. Let's stay away from religion for the moment.

Q. Why?

A. Because with religion it is impossible for most people to think analytically. Let's take an example from money and markets. Let's take the myth "you can't go wrong buying real estate in the long run." The myth may be true as long as the reality it is applied to is in an economically stable world, but even here a follower of the myth may fail terribly. An easy example might be that of someone buying an office complex in a tsunami-prone area or within the range of the lava of an exploding volcano.

Q. Okay, what about "the Last Judgment?" Isn't that a myth?

A. Absolutely not if you are a fundamentalist Christian for whom the Bible has one and only one meaning. But you cannot deny that whatever is told as a story is a story, and stories are myth. And when stories are told, people add and subtract whatever they imagine.

Q. You mean like on judgment day when all sinners are being cast into hell where they will burn forever?

A. This is not the time to argue about details, but you have to admit if you ask individuals, each one will see a somewhat different picture. While the myth will have a basic structure, there are as many realities as there are persons. So anyone or no one will know what judgment day will really be like.

Q. But you are not going to deny that there will be a judgment day?

A. Well, if you are a fundamentalist Christian, judgment day is an indisputable truth because this truth comes from God. The myth is not just a myth; it is gospel truth.

Q. Not to be argumentative, isn't it possible for what has been announced as gospel truth not to become reality?

A. It is only impossible if someone's god cannot change his mind. But as the God of the Judeo-Christian-Islamic tradition is a living deity and an all-powerful that deity one, He has the capacity to change His mind at any time.

Q. So there might not be a judgment day?

A. There might be or there might not...

Animals, Dervishes and Souls

From the point of view of empirical science it is as yet impossible to prove or disprove that there is such a thing as a "soul." Assuming that souls do in fact exist, it would be interesting to ask if not just humans but also animals have them. A couple of weeks ago I saw the documentary, "The Cove." One of the main points of the film is that dolphins have the intelligence and sense of ethics equivalent to that of humans, and they deserve the same basic respect as humankind. Is it fair to be dismissive of animals just because they see and act in ways that don't make sense to us humans?

Whether observing animals or humans, one should be careful about rejecting as bizarre any behavior that seems to make no sense. Today I saw a youtube video of whirling dervishes, men who spin around in a circle in order to attain spiritual enlightenment. Isn't it unfair to be dismissive of strange behavior simply because we initially perceive it to be pointless or silly?

I believe it is proper to extend the courtesy of not just panning another's misunderstood ways even if that other is an animal. If, for example, we see a dog chasing its tail, can one be ever so sure that in the universe of that dog his spinning in a circle is not some kind of a spiritual quest? According to principles of karma, someone laughing at a dog chasing its tail may find himself being reborn in another life as a whirling dog...

How Oligarchs Grab What is Yours

You may use points from this dialog to explain how oligarchs operate and how they become very comfortable enriching themselves at the expense of the poor and middle class.

Q. Times are getting tougher. European Central Bank economists have called for austerity measures around the world. Why?

A. The story goes, because governments around the world are in the red they cannot do what is expected of them: Things like rescues from natural disasters, law enforcement, keeping up the infrastructure, and last but not least, making sure that the poorest of the poor, even though they may not be entitled to shelter, have enough food to survive.

Q. So it would mean that governments, if they want to remain in existence, need to cut services. A sudden stoppage of all the services would be too much of a shock for any given country. If for example, roads would no longer be repaired, laws no longer enforced, fire fighting no longer available etc., even some of the very wealthiest would be unhappy because if a fire went out of control in a middle class area, the fire might spread to the more upscale neighborhood. So, where can governments cut?

A. As perhaps a majority of the wealthy would not want any cuts on any service that might affect them personally--an example might be the elimination of air traffic control because it would effect the flying safety of private jets--the areas that could be cut are the so-called entitlements...

Q. Like what?

A. Anything that would benefit people of middle and lower income. Food stamps and shelters for the very poor, aid to schools and universities, health care, subsidies to Amtrak, infrastructure grants to small and large communities etc.

Q. Are you trying to say that "entitlements" are services that the wealthy think those with less money are not entitled to?

A. Exactly.

Q. Why? What's the philosophy behind that?

A. It is a philosophy that says the wealthy deserve what they get and that they merit their fortune by being "chosen." As evidence that this is so they assume that people with low net worth are simply not worth as much as human beings and therefore are not entitled to "entitlements."

Q. They don't actually say that?

A. No, but they act it. Even though many of the wealthy have never ever produced anything of value, they assume that they have earned all they own.

Q. You are not being clear.

A. Take, for example, executives in the banking sector. They may have made good decisions in their lending or investments benefiting their institution, or they may have made decisions that ran their bank into bankruptcy. At the end of a year they still collect millions in salary and bonuses, simply because they have made arrangements that as corporate officers they will get paid, not for performance, but for the position they have assumed in the corporation.

Q. Who makes the decisions about how much money executives get and how do the decision makers justify giving high compensations to non-performers?

A. It is the board of directors who decides. Board members also get paid without having to perform. As to giving huge bonuses to non-performing executives, they claim it is necessary to pay such high compensations so that they can compete for top level talent with other corporations.

Q. Doesn't sound too logical to me. Why would they want executives with ever higher compensations to run companies into the ground?

A. Because in today's financial world there is money to be made whether the value of a company goes up or down.

Q. This does not make any sense at all.

A. It makes sense when you begin to understand how derivatives work. Derivatives work like insurance policies. If you take out an insurance policy on a house and that house burns down, you break even when the policy pays off. But if you buy several insurance policies on the same house and it burns to the ground, you win by however many policies you have bought. So where your property value was that of one house, you now have a property value of five houses if you bought five policies.

Q. So holders of the right derivatives make out when sectors of the economy collapse?

A. Yup, and they get away with it because people don't know how derivatives work...