In what we trust

This is something I’ve been thinking about for a while. It’s long. I hope it’s worth it to you. If you really like it- or hate it- tell 5 friends.

The recent financial market meltdown started me thinking about what makes civilized society possible. It’s not the form of government, even a dictator can make the trains run on time. It’s not the economic system, although, some do seem to work better than others. It’s not based on a religion, or a shared heritage or culture- it’s one thing, and one thing only: Trust.

Trust must be pretty important, since it’s right on our money: “In God we trust”- although in reality, God has nothing to do with it- unless God is an abbreviation for Government Organized Democratically and the Democratically part is a euphemism for equal participation (which we should know is a fallacy by now, although original intentions were good).

We use many factors to measure the success of countries and political subdivisions including:
Wealth, education, productivity, health, population and even “happiness factors”- but for people to live together synergistically and successfully, the most important index we should pay attention to is our collective trust factor.
For all the differences, for civilization to work, for an economy to function, for people to have hope, it all comes down to Trust.

Do we trust:

  • Each other: to be free from fear of crimes against us or our property.
  • Our institutions: to provide for the basic health and welfare for the greater good.
  • Our systems: for providing a framework for commerce and a level playing field.
  • Our government: to be fair and responsible.

Without trust, chaos gets a toe-hold. Chaos is the antithesis of civilization. It grows like a cancer- quickly, in an uncontrolled death spiral, and unless radical procedures are implemented quickly and deftly, there will be no recovery.

Watching the powers that be, at all levels- from global to local, we’ve seen reactive measures aimed at propping back up things that have already failed the trust test:

  • Banks have failed, because we trusted them to make good loans and invest wisely.
  • Insurance companies have failed because they decided to insure things that couldn’t possibly be insured like credit default swaps.
  • Wall Street has failed because we allowed it to become a casino instead of remaining a financial market.
  • The American automotive industry failed to build vehicles that would be desirable when gas prices hit $4 a gallon.
  • The oil companies failed to realize that consumers could only afford their car based lifestyle when gas prices remained stable- and that people would find ways to cut consumption to make ends meet when prices became speculative.
  • And, lastly, our Government is failing- because we’ve lost trust in our “representatives” to make good laws and regulations. It’s becomes obvious that we now have the best politicians money can buy.

When the cancer of the deregulated financial systems struck, our government didn’t do anything (other than outlaw naked short selling) to change the fundamental ways we conduct business. Their best answer has been to throw money at the problem, instead of trying to heal the system through radical surgery.

In less than 30 days, we will have a new president, who has promised change, yet he has surrounded himself with hardened politicians and political operatives who were all a part of the current problem. If we’re looking for a cure for this systemic failure, it’s not going to come from anyone who has “made it” inside the current system. They’ve already been infected by the cancer and are fighting their own battles for self preservation. Karl Marx wasn’t part of the establishment of his time, neither were Plato or Socrates. In fact, revolutionary ideas seldom come from the establishment- hence we must rise up and demand, through revolutionary rhetoric, systemic changes if we want to have civilization continue.

This country was founded by revolutionaries who got it pretty close to right with the US Constitution. Unfortunately, we’ve travelled a long way from those ideals and have become placated cogs in a machine that no longer seems to care about those who it was built to support.

At every turn, what should be basic rights, have been taken over by corporations that get to act like people- with sociopathic tendencies.

We’ve created a system where a company can play god with your health care decisions, yet, you can’t choose how to manage your own end of life scenario.

We’ve created a system where it costs billions to elect a man to a job that only pays $400,000 a year- and holds his finger on a nuclear arsenal, yet, others can make billions (literally, in one year) by playing games with financial instruments without being held personally liable.

We’ve created a system that says it’s ok to be paid millions while shuttering factories that have had tax dollars invested in them, to “guarantee jobs” for communities- only to see the rug pulled out from under those same communities.

It’s time to look at these cancers to our economic health and reassess the system. It’s time to put new rules in place, not to re-distribute wealth, but to restore both a level playing field and trust back into a system where the rules of common sense no longer seem to apply.

It’s time to start evaluating all of our policies based on will they instill or dilute trust into our systems.

If we want to restore health, the first thing we’ll have to do is bring sanity to our election process. It can’t take 2 years to run for an office that only sits for 4 years at a time. We have to shorten the election cycle, totally revise the way that campaigns are funded, and build a new system from the ground up- to include voting by mail.

Once we have leaders who represent us, we may be able to start looking at rebuilding trust in our institutions and systems.
If we cut out the middleman that adds 35% overhead to health care costs for those that are insured- we may make a good start toward universal coverage.

It’s become apparent that what happens on Wall Street is directly connected to what happens on Main Street. Reducing volatility by requiring all investments over $50K in any company to be held for at least a year. Any corporation that uses stock options for compensation, must require that at no time is stock issued if the company cuts employment. It’s time to also create pay ratios. At no time may any public company pay anyone more than 100x the lowest paid salary. If you want to make the big money, you have to own the company, or have a controlling interest owned by a majority of the employees.

It’s also time to stop corporate welfare by government in the name of economic development. No more tax breaks for relocation, investment or job creation. While the next administration is talking about huge investments in green energy as a savior, the real key is energy independence through less consumption. Considerably less consumption. The only tax break should be for employees able to walk to work or take public transit to work.

A massive refocus on walkable communities, with the best, efficient public transit systems would be one of the best things we could invest in now. Task Detroit with building electric trains, trolleys and buses. Build high-speed rail between metropolitan areas. Invest in a complete rewiring of our info backbone, moving to gigabit speeds into every home- allowing more people to telecommute when possible.

We also need to simplify our taxation system and make it easier for small businesses to start and operate. The process of starting and running a business should be as simple as getting a drivers license- complete with a basic training course, a test and a license with special authorizations for specific skills. Small business is the engine that really drives our economy and employees the most people- yet, their voices are drowned out by the behemoths that get all the attention. If you want to really see the economy flourish, give private employers tax credits for each person they employee based on their salary as a percentage of the owners salary. Make it worth the small business persons energy to employ and train workers of tomorrow, with extra credits available for taking interns and recent graduates.

To address areas of historic poverty and under-investment, we need to incentivize investment in new ways. I had proposed long ago to allow unlimited H1B visas for employees who live and work within these federally designated “HUBzones.” In addition, we need to look to re-balancing populations, giving preference to States that have been losing population to entice new blood back to old cities.

Our education system has had a funding problem for years before the current financial meltdown. To move both our education system forward, and to level the playing field for retail, it’s time to introduce an Internet sales tax that is collected federally and disbursed locally per student. By simplifying the collection and distribution, and eliminating local tax levy’s, we may have enough money to properly fund our future leaders education. It’s also time to provide laptops for every student in the country, complete with open source operating systems and open source software as well as open source coursework. We need to move away from textbook based education- and proprietary standards for the greater good and to teach the value of shared knowledge as a basic human right.

These are radical systemic changes for a revolutionary rebirth of the United States of America in a time where nothing less than revolutionary change will work.

If we want to regain our position as a world power, instead of a debtor nation of consumers, we have to learn the old adage “You have to give up power to get power.”

It’s time to provide power back to the people- through a system we can trust again. One that puts basic, individual human rights ahead of the government, ahead of the corporations and is built on a platform so that it’s not in God we trust, but in US we trust. That would be change we can believe in.

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16 Responses

  1. ShortWest Rick December 26, 2008 / 10:20 pm
    David, I agree with almost everything you said and not to nitpick but I have to take issue with the internet sales tax, it’s uncollectable with the current mode of thought. First we have to realize I can’t buy anything on the internet with a fifty dollar bill, the currency is plastic card. Said, there is nothing in place to collect sales tax from offshore retailers, and personally I don’t trust the federal government to collect a sales tax and distribute it equitably to the states anyway.

    We have traditionally put the responsibility of collecting sales tax on the retailer and forwarding it to the IRS, lets consider putting sales tax collection on the new currency provider, visa, mc and amex who can’t do business without incurring an electronic record and could impose sales tax based on the card holder’s zip code. Just my two cents, charge it to my debit card.

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  2. Gene December 26, 2008 / 10:33 pm
    People have power with money – therefore, stop taxing people. That power shall be slowly restored.

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  3. ShortWest Rick December 26, 2008 / 10:50 pm
    The first to be considered is the influence of foreign trade. Hitherto we have confined our studies of price levels to an isolated community, having no trade relation with other communities. In the modern world, however, no such community exists, and it is important to observe that international trade gives present-day problems of money and of the price level an international character.

    http://www.econlib.org/library/YPDBooks/Fisher/fshPPM6.html

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  4. David Lauri December 27, 2008 / 12:01 am
    @ShortWest Rick: If you want to spend cash on the Internet, use a service like PayPal. Sure, you can’t send a $50 bill over the Intertubes, but you can have $50 taken out of your checking or savings account, no MasterCard, Visa or Amex involved.

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  5. Rick Pletcher December 27, 2008 / 12:48 am
    David,

    I very much agree with your positions here. We do need a revolution in this country. We need to bring our manufacturing sector back and clean out the crooks and theives in corporate America. I left Dayton in 1984. I have only been back once, and it is a shame as to what the leadership has done and what they allowed to happen. Let us band together and raise not only our voices but also our efforts bring the strength and power back to this land. Thanks for your courage to speak up.

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  6. Gary December 27, 2008 / 1:32 am
    David,

    When our forefathers established our government, they did not intend political positions to be careers. They were positions of service or duty. Todays politicians are career oriented and won’t do what is right because that would put them out of work. Here is an interesting quote on leadership.

    “Leadership must be based on goodwill. Goodwill does not mean posturing and, least of all, pandering to the mob. It means obvious and wholehearted commitment to helping followers. We are tired of leaders we fear, tired of leaders we love, and of tired of leaders who let us take liberties with them. What we need for leaders are men of the heart who are so helpful that they, in effect, do away with the need of their jobs. But leaders like that are never out of a job, never out of followers. Strange as it sounds, great leaders gain authority by giving it away.”

    — Admiral James B. Stockdale

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  7. ShortWest Rick December 27, 2008 / 1:53 am
    Thanks David Lauri but I have a PayPal account, the plastic card is blue, the number starts with 5581, it has a MasterCard logo at the bottom right… ummm…

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  8. David Lauri December 27, 2008 / 2:08 am
    You don’t have to get a PayPal credit card to use PayPal. You don’t have to have a credit card at all, just a checking or savings account.

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  9. ShortWest Rick December 27, 2008 / 2:28 am
    I know I know, David L… point being even PayPal transactions are recorded electronically… unlike cash transactions… to impose a collectable sales tax on internet purchases scrap the law that says the buyer or retailer is required to report it and make the currency provider collect and convey it, they already take a cut from the retailer and buyer anyway… what am I missing?

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  10. Gene December 27, 2008 / 9:54 am
    My favorite is the small business training stuff…….. like getting a divers license. Whatever. If you want to really change our society, for the better, you would require people to get licenses to have kids, not to start small businesses. Once again you prove that government is just in the f*cking way – let me keep more money and I will do better with it than any frickin government.

    I don’t think you should get a license to have kids or to start a business. You would be better off in our society if you do the following: 1. stop spending money on crap or stuff. Save your money. 2. graduate high school, get a job, do not leave that job until you have another job setup, and if you want further education and training take night courses and pay for it yourself. 3. avoid debt, with the exception of a house. A house may not be a great investment, but the fact is you have to live somewhere and you should get a lot of the money back you put into it. 4. Don’t have kids until you are married, or emotionally or financially ready. They cost a lot of money. 5. when you have kids it is YOUR job to make sure that they are educated, that they can read BEFORE kindergarten. It is not the job of the schools. They offer lessons, if your kid can’t keep up it is because they are not prepared, therefore it is the parents fault. You had the kid, now act like an adult and make sure they are prepared to learn. 6. stop blaming people. If you are poor it is bc you failed somewhere in life. Get over it and get back on the horse. Nothing in this country is handed to you, unless you are on welfare and paid to have more kids.

    Follow these simple rules for 15 years and you will see a big change. All of these changes deal with the number one person you can control in your life, YOU. I did not mention change this or change that – like frickin government. Even though there has to be change it is easiest if we all make the best for ourselves, bc this will translate into the other change to come.

    Everyone thinks about changing the world but no one thinks about changing themselves.

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  11. Gene December 27, 2008 / 11:16 am
    Not to rain on your parade, but compare us to many countries that have no food, no jobs, and the government keeps them down. We have it slightly better than that, maybe would should be grateful for that.

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  12. David Lauri December 27, 2008 / 12:08 pm
    What you’re missing, ShortWest Rick, is that not all automated debits from checking and savings accounts are for Internet sales for which a sales tax should be deducted. If I have my mortgage payment deducted from my checking account, I shouldn’t have to pay sales tax on it.

    What you’re also missing is that if you have $100 in your checking account and make an Internet purchase of $99, then you’d be overdrawn if your bank then tried to take out another $6.44. Actually, come to think of it, banks would love that. They’d try to take out the sales tax and then would ding you $30 for being overdrawn.

    Sure, banks could theoretically set up their systems so that they could tell the difference between bill payment and Internet purchases. But it wouldn’t necessarily be simple, nor would it necessarily be a better solution than having sellers do the job of collecting sales tax.

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  13. David Lauri December 27, 2008 / 12:11 pm
    Gene, the idea of requiring people to get licenses to have kids is a great one, albeit on that of course would never be passable. For all the crying that conservatives do about how queers are threatening the family, it’s heterosexuals who beget the most unwanted children, the most abused children, the most neglected children.

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  14. Greg Hunter December 27, 2008 / 1:17 pm
    David we are all attempting to create a utopia, but some of the conditions you desire are inherently consumptive, which is part of the problem. I agree with making rails, reducing the foot print of cities and generally making the hierarchy of needs a social safety net. While this kind of net would be desirable it would also exacerbate the endemic problem of population, so how do we encourage fruitfulness in child bearing. My guess would be to increase taxes for each child over one and provide a tax break for those that never have any.

    The people in power fail to recognize that the human is tied intrinsically to the earth and no amount of printing money will make food appear, tainted water clear and enough energy to live in the system we have created. Either people have to go and our way of life has to change.

    I was at the Farmers Market discussing the potential impact that the financial crisis will have on the farmers and prognosis is not good, but do any of the local elected officials care about quality healthful food? Not that I can see, they only care about Wal Mart, Tommy Danis, Premier Health Partners. Let’s be fair, Americans do not care, so why should the politicians. The media has promoted that bigger is better and that business as usual may continue, but this is fallacy.

    David I think the revolution will come, but it will be like all the others, blood shed and strife because the people in power will not give it up or say they led us down the wrong path.

    Bright Shining City on the Hill BS.

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  15. David Esrati December 27, 2008 / 2:08 pm

    @rick-
    Large businesses already have to collect sales tax on Internet purchases- if they have a physical presence in the State. Therefore- Apple does, Amazon does not in Ohio.
    You are supposed to “voluntarily” pay sales tax on your own (yeah, right) to make up for this. With Ohio having different sales taxes for each of 88 counties- it makes it even harder for retailers to collect the correct amount.
    As to Gene- licenses for business- it’s not the regulatory part I’m looking for- it’s making the government realize that all their bureaucracy is overwhelming. If they had to teach you- give you a license- there can’t be any more of this “well you were supposed to know about the 2 forms you have to fill out with every hire- and the requirements for collecting tax on only the first $9000 of earnings” and other stupid regulations that hinder and catch small business people in a trap.

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  16. Gene December 27, 2008 / 4:40 pm
    It seems to me, on the small business level, that government is the problem. They should be there to collect taxes on every level, big guys and small fries, and police business, by they should get out of the way to conduct business. Our Wall Street collapse and other like bs is bc they did not do their jobs – they knew what was happening, but our government, our elected politicians were too busy padding their pockets and getting kick backs for them to put their foot down. Police it, and get rid of all other govt bs, and lower taxes. Keep the money in the hands of the people. Govt just screws thing up. They can police it and nail them to the cross when the break the law, otherwise get out of the way. I don’t need them, but they want my money.

    Make yourself better and you make society better – we should stop trying to make others better when they don’t care to help themselves. And gay men and woman should be encouraged to adopt and raise kids, bc lord knows the GD rednecks and thieves love to f*ck but don’t actually like to “raise” their kids.

    Make yourself the best YOU can be before pointing fingers at others. And Americans do not care about make the environment better, they just want to consume but not actually partake in making the world a cleaner place. It nonsense to think otherwise.

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