Progressive Taxation vs Monopoly

I think I'm what could be called a "Market Socialist".  I strongly believe that free, competitive markets drive innovation and successful response to changing circumstances.  I also believe regulation is strongly necessary for markets to be truly competitive and not subject to a variety of "market failures".  This include monopoly and various forms of near monopoly, "race to the bottom" enshitification, and several more.   This regulation has a cost and unfortunately, some of the solutions require replacement of an entire market area by government-operated business, which of course costs some money.

There are a few areas that history has shown the free market cannot work:  The first is the military.   Some humans are prone to aggressive acts, and occasionally are charismatic enough to get others to support them.   We need military and police forces to keep these in check, and history has shown, over and over, that if these things are operated by private enterprise, societal collapse is inevitable.   The cops and soldiers must be strongly controlled by highly democratic institutions that are only motivated by the public good: something, whether it's strong ethics rules, public transparency, or something else, keeps them from using the power that these agencies give them for selfish or destructive goals. 

 The list of these necessarily public services is long: the court system, the roads, the postal service, communications networks, health care, many more.  We can argue about exactly how to nationalize these systems: for example, the Bell System was a for-profit company that held a virtual monopoly on phone service in the US from early in the 20th century until 1984, and it worked.  Bell was strongly regulated, both that their prices and services they were required to provide were publicly regulated, and that they were required to keep advancing the technology.    Changing technologies, many of which had been created by Bell Labs, convinced regulators and the courts that it was no longer possible to do this.  This was a disaster for society, in many ways.  It created a bunch of new billionaires, but it created lots of what could be called "parallel monopolies", each of which has all the bad properties of the old monopolies, but there are more of them that we must deal with.

 We must fix this.  Ultimately, we need to set things up so that no functional monopoly is allowed to exist without regulation that prevents enshitification.    As a fan of markets, I believe the best way would be to enforce rules that prevent any market from having too few competitors to keep it really free.  I cannot think of a circumstance where this is fewer than a dozen roughly equal competitors,  and probably more.  There are also circumstances--and the phone company of old is a perfect example, where there are huge structural advantages to having a monopoly.  That monopoly needs to be regulated so that it provides a comfortable income for its workers and shareholders, but its growth is limited.  This would not inherently disallow competition: GTE competed with Bell in the old days.  I think the modern version would be a small number of tightly regulated collaborating companies providing the coax, optical fiber, microwave and cellular networks, with service providers licensing these carriers to provide specific services.  The carrier companies would be required to cover every place and everybody for the same price and service quality, and allow "roaming" at no cost--you shouldn't need to know which carrier you're using, or need to be in some special place.

 Of course, doing this massive regulation, and in many cases, massive government-run operations, would require taxation.  During the time that most people think America was at its greatest: 1933-1980, taxation was extremely progressive, and the same attitude that led to that led to competent monopoly enforcement.   Income over $400K was taxed at 91% marginal rate for much of the 1950s, and it worked extremely well.  Today, the top marginal rate is about 1/3rd of that.  And the billionaires are running amok--the worst of them are monopolies (including the host of this blog...).  We must stop this.

 I say: we need a progressive tax rate that creates a lot of revenue for public sector without hurting people who can't afford it.  Here;s my thinking:

income less than 2/3rds of median income ($50K):  0% tax

income between 2/3ds and double median ($150K): 10% marginal tax

various rates in the middle here, which I'll leave blank for the moment.

income over 25M: 70% marginal tax

income over $1B: 95% marginal tax

All income should be taxed, with NO mechanism for diverting income into lower-taxed brackets, such as carried interest, borrowing against assets, dividends, long term capital gains, allowed.  The top brackets may seem punitive, and to some degree they are.  Billionaires hurt society.  There are a few who do good things with their money, but too many use their money for bad.

There are ways for $billion earners to avoid taxes:  put large dollar values into actual charitable causes, like building schools, subsidizing food programs, etc, and they deserve a deduction for this. 

  

 

Recession and Inflation by president

This data is from St Louis Federal Reserve's "FRED" data.  Numbers are computed annually. 

Nixon1  1 recession 5.8%  peak inflation, 4.7% average, inherited 4.3%

Nixon2 1 recession, 11.1% peak inflation, 8.6% average, inherited 3.3%

Ford    0 recessions, 7.6% peak inflation 7.4% average, inherited 5.7%

Carter    1 recession, 13.5% peak inflation, 9.7% average, inherited 5.7%

Reagan11 recession  10.3% peak inflation, 5.7% average, inherited 13.5 

Reagan2 0 recessions 4.1% peak inflation, 3.3% average inherited 3.5%

Bush    1 recession, 5.4% peak inflation, 4.4% average, inherited 4.0

Clinton1    0 recessions, 2.9% peak inflation, 2.8% average, inherited 3.0%

Clinton2 0 recessions, 3.4% peak inflation, 2.4% average, inherited 2.9%

Bush1    1 recession, 3.4% peak inflation, 2.4% average, inherited 3.8%

Bush2    1 recession, 3.8% peak inflation, 3.3% average, inherited 2.6%

Obama1    0 recessions, 3.1% peak inflation, 1.4% average, inherited 3.8%

Obama2    0 recessions, 1.6% inflation, 1.1% average, inherited 2%

Trump1    1 recession, 2.4% peak inflation, 1.9% average, inherited 1.2%

Biden    0 recessions, 8% peak inflation, 4.9% average, inherited 4.6%

The Nixon, Carter, Reagan inflation was all very directly related to the OPEC crisis:
In October 1973, several Arab countries did a surprise attack on Israel, which, unlike the '67 attack, took a few months for Israel to push back.  Nixon threw his support wholeheartedly behind Israel, and the Arab countries formed an organization they called "the Organization of Petroleum Exporting Countries" and sharply reduced supplies to the US and other countries that had supported Israel.  OPEC continued to blockade oil until well into the 1980s, with the result of 3 recessions and a decade of high inflation.   All US presidents carefully kowtowed to OPEC since then.

 

 

Serenity Lies to Us.

My favorite TV show is 2002's martyred Firefly.  It was presented out-of-order, in the Friday Night Death Slot, by a network that clearly didn't understand what it had, but did let the show's writers and producers do a competent job.  Nearly all of the actors have gone on to have long and successful careers.  It was killed just as it was beginning to develop a following in spite of the horrible support the network had given, and that following quickly grew--sufficiently that the showrunners were given a chance to make a feature film 3 years later.   My thesis is that feature film, as likeable as it is, does not make sense in the context of the rest of the show.

 Almost everything in here is a spoiler.  If you haven't watched the show or the movie, and I urge that you do, don't read this essay until you have.

 There are a number of big screwups--killing off two of the main characters being the least of it.  Another is that the writers seemed to feel that a lot of the movie's viewers would not have seen the TV show.   That resulted in a lot of valuable movie time being spent in exposition.  But the most important is that the central plot element--the origin story of the Reavers and River Tam's connection to it, makes no sense.   As two separate stories, it makes perfect sense, but tying them together as they tried to was simply a mistake.

 I regard the entire movie as Retcon: Retroactive Continuity, meaning, in this case, significantly rewriting the story so that two unrelated back stories share a single plotline.  This was a mistake. 

The alliance, and most likely their corporate benefactors, especially the Blue Sun Corporation, have done and will continue to do a lot of shady things, and they have a staff of secret agents to defend them.   Some version of this is likely true of most powerful governments in our world too, and lots of good stories can be written about them.  They need talented operatives to do this work, and the unnamed "operative" is one of them.  I am virtually certain that River was being recruited and trained to be one too.  I'm pretty sure that Reverend Book was also an operative during the war, although perhaps not as high-level as the Chiwetel or River characters are.

 Similarly, I am comfortable with the story that the Alliance accidentally created the Reavers.    It makes sense, especially since we're aware that they've been learning how to fiddle with people's attitudes and self control with chemistry.  I find it profoundly unlikely that River had anything to do with this, or that The Operative did either.  It does make sense that those who are guilty of creating the Reavers would like to cover up their involvement, and might even use an operative or two to interfere with word getting out.   But I am profoundly skeptical that they would have gone so far as to bury a secret codeword into a trainee operative.

Why do they want River so much?  This secret is sold to us as the central premise of the movie.  They don't want the secret leaking.  Why would they give the secret to a not-yet-fully-trained operative?   I can't think of a single reason, and I can think of lots not to.  If you need for her to know for some reason, there's no reason not to wait until she's been sufficiently brainwashed to be as loyal as the Chiwetel character.   It's mission-specific info.  When the Chiwetel character learns the truth and realizes that he's been brainwashed, he flips.  "No longer their man" as he puts it.   

The answer is that they accidentally put a senior member of the Alliance in a room with River, and she apparently read his mind and found out about Miranda.

That said, central to the show is the message that the Alliance is incompetent.  They are massive, powerful, and most of all boring, and over and over they prove that one part of the administrative state has no idea what other parts are doing.   The operative has figured this out.  But he is

It is tragic that the show was cancelled when it was.  A decade later, the internet was advanced enough that rebooting a show like this would have been easy.  I put forth the example of "The Expanse", which was cancelled by SciFi, but brought back to life a few years later because Jeff Bezos personally liked it.  The actors were mostly all still available and pretty much looked as they had earlier.  Similarly, Serenity was released only 4 years after the show was cancelled.  They had to build a new set, and improved CG and budget made a real difference--and Summer and Jewell were both under 25.  But ten years after the movie, one of the actors had died, and the two that were purportedly teen-agers could no longer pull that off.    The story would have to explain the passage of so much time.

 Animation makes it much more possible to play these games.  Voices change almost as much as physical appearance, but AI voices are getting so good I think this could be faked now.   I hope the new show can pull it off.  I say: put it into the timeline between the show and the movie.  I think there are as many as three plausible years in there. 

Ranking Episodes of Firefly

 My favorite TV show is 2002's martyred "Firefly".  They did 14 episodes, one of them a double-length Pilot, and a feature movie.  The movie was good, albeit disappointing.

 If you haven't watched the show, do it.  Watch the episodes in order, most importantly the Pilot first.  Fox aired them out of order, and that was one of the things that damaged the show's popularity.  There are several spoilers in here.

 

Best Episode: Out of Gas.  This episode was full of flashbacks, many of which explained who members of the crew are and how they came to be part of Serenity's crew.  It's only best by a tiny bit.   The one real error is that Wash set up a call back button, but Mal never uses it.  The plot would make more sense if he had pressed it, and only a few lines would have to change.

Pilot: The initial, double-length episode is only in second place by a nose: it's also one of the best.   It's actual name is the same as the ship: Serentity.  It has several scenes from the battle that gave the ship its name.  We meet everybody, including several of the baddies.  Reverend Book, now aware that he's on a pirate ship rather than the Tramp Steamer that he thought he was boarding, expresses misgivings, which are completely gone by the next episode.

Ariel: Inara needs to go to a central planet for her annual medical certification, and Doctor Tam comes up with a job for the crew to do at that site.   We learn a lot about Jayne, a really lot about River and "The hands of blue".

Objects in Space: a Bounty Hunter attempts to capture River, but River turns the tables on him.  The bounty hunter was a terrific character, and River and Simon are at their best.  River goes from being a character that made the rest of the crew nervous, to being a full fledged part of the crew, that everybody loves--almost as much as they all love Kaylee.

 

The Train Job.   The "second pilot".  It was written quickly, over a weekend, and the network foolishly ran it instead of the real pilot.  It's a pretty good episode, but it fails to do a lot of the exposition that the pilot did so brilliant.  It has a bunch of very likable scenes, such as when the goon is pushed into the running engine and when the captain realizes that he's doing his theft right under the noses of a whole troop of Alliance soldiers.

Safe.   The doctor and River are kidnapped by hill people, who need a doctor.  I really like the world building that this episode does.   It almost ranks with the best episodes.

 Shindig.  while trying to make a deal for some goods to transport, Captain Reynolds gets crosswise with a local oligarch and is forced to fight him.  There's a lot to like about this episode, but it's in the bottom half only because there are others that are significantly better.

Jaynestown.  We learn a little about Jayne and his history.  While he is mostly a crude, money grubbing thug, he does care about things.   We see a lot of the character of various characters.

War Stories.  A great episode in a lot of ways.  Niska, from the earlier Train Job episode, is back and he's angry.  River is starting to recover, presumably with the aid of the treatment the Doctor was able to devise following the episode in Ariel, and we start seeing a little of what the alliance wanted to turn her into. 

Our Mrs Reynolds.  Christina Hendricks plays an interesting character--who seems like an incredibly naive young woman but turns out to be a highly cynical and skilled thief.

Trash.  Christina Hendrick's character is back.   It's a more straightforward episode and it does a little world-building, and it is a great episode overall, but it's definitely in the bottom half.

The Message: Mal and Zoey's army buddy shows up with a secret.    It's got a fulfilling but very sad ending, compounded with the fact that the actors had just been informed that the show had been cancelled

Heart of Gold:  Inara's old friend hires the crew to deal with a thug.   The plot shares a lot with the Clint Eastwood movie "Unforgiven".   It's the archetypical horses and spaceships in the same scene episode, although there are others.  Mal goes full Indiana Jones and chases down a hovercar with a horse.  

Bushwacked.  This is probably the most disappointing episode.   The crew comes upon a colony ship that had been attacked by Reavers, leaving behind a virus that infects the Serenity and the only survivor.  

----

 I rank the movie in the bottom half of this list.  It's a good movie, and it explains some important stuff, but I regard a lot of the plot as inappropriate Retcon.  I'd rank it above "The Message" and below the YoSaffBridge episodes.   I wish they had told more or less the same story with three or four regular episodes, and not tried to do the exposition: most of the audience were already fans, and at least 1/3rd of the movie was wasted on that.  River is now almost a human being, as well as being something considerably more, Simon and Kaylee end up together, and it looks like the Captain and Inara are right on the edge of the same thing.   Wash and the Preacher were killed, only because the authors felt the movie needed the weight of that, not because it added to the story.  Mr Universe is a character that should have either been left out, or had a stronger story arc.  The Operative is a great character and I think his arc was just about right--but should have been spread over three or four episodes.

 

Bison and the Dust Bowl

Did the massacre of the American Bison Cause the dust bowl?   It doesn't appear to be the only cause, but it's clearly a contributing factor.

 The Dust Bowl was an ecological disaster in the early 20th century that devastated American agriculture, and was one of the major causes of the Great Depression.  Millions of new settlers flooded into the Great Plains states after the Civil War, using farming techniques that were appropriate for smaller farms in wetter climates.  Where they had come from, they had not needed to irrigate their fields, and they arrived in the Plains ignorant of the methods.  To some extent, they benefited from a rare wet spell, and to a larger degree, from the immense Aquifer (the Ogallala Aquifer) reaches from South Dakota to Texas.  They drilled thousands of wells into the aquifer and captured much of the few rivers that flowed across it.  They believed a widespread myth that "Rain follows the plow", which was promoted by land speculators and others that profited from their settlement, but did not pay for the consequences of being wrong.   When the wet spell ended in the 1920s, a lot of the land dried up and blew away.  A lot of the landholders had mortgaged their farms, to buy equipment or other advances, which were now in arrears--a million or more "Okies" were forced to give up their farms, which had become the property of the bankers that had lended to them, and which were sold to Agribusinesses for very little.

At the same time, there was an effort to suppress the previous inhabitants of the land, called "Indians" and force them to live on reservations, leaving the best land for the new settlers.  The army killed a lot of indians directly, but probably more indirectly, largely by the mass slaughter of their primary food source, the American Bison.  Around 60 million Bison (sometimes called Buffalo) were killed and by 1889, there were just 541 bison left in the US.  Active conservation has allowed these numbers to rebound to as many as 500,000 today, but the giant herds are gone, and existing agriculture is unlikely to allow them to return.

The Bison, it turns out, do a bunch of unique things that other large Ruminants do not.  They tend to not stay in one place--they eat their favorite grasses down to where they're a little harder to reach, and then move on.  One of the consequences of this is that the seeds from these preferred grasses adhere to the animals fur, and often pass through their guts, but survive and with a nice dollop of fresh fertilizer, are replanted in the new place that the Bison is feeding.  This causes the preferred grasses to spread, and where possible, interbreed with whatever was already there, improving the quality of both.  The great herds would trample the grass...this broke up the ground, and drove the seed below the surface where it was most likely to germinate.  And perhaps most importantly, the Bison like to "Wallow", where they lie on their side and roll around, which digs great pits.   This apparently helps to clean their fur, and helps them scratch itches.  They also like to scratch against trees--they are huge animals and it's amazing to see a tree with the bark missing from one side, up to 9 feet high.

But the wallows have a wonderful secondary effect in the plains.  They catch rainfall.  Left to its own devices, or to regular cattle, any irregularities will tend to get flattened, and rainfall will flow downstream.  Since a lot of this land is clay, it doesn't percolate well, and the water quickly runs off.  But if millions of bison are creating millions of wallow pits every day, a lot of this water catches in the pits, and stays there until it evaporates or percolates in.  That is probably a big part of how the Ogallala got to be there, and we almost completely removed this source in the late 1800s.

 Can the the restoration of the Bison restore the Ogallala?  Since the present population is less than 1% of what it was before the great slaughter, probably not.  But it might go a long way toward helping. 

2026 Electricity Cost, by Source

These are the fully burdened costs of each electricity source, counting capitalization, construction, maintenance, fuel depreciation, etc., as of today

Coal                        .092 to .23 per kWh

Natural Gas            .065 to .10 per kWh

Hydro                     .02 to .06 per kWh

Nuclear                    .037 per kWh

Utility Scale Solar  .03 to .05 per kWh

Residential Solar    .14 to .18 per kWh

Wind                       .024 to .075 per kWh

 

The bottom line: as of today (a couple of years ago, actually), utility scale solar was cheapest and shows signs of continuing to come down.  Hydro is #2, where you can get it, and that price has been stable for some time.  Wind is #3.  Nuclear is potentially competitive, but there are a lot of complicated externalities which make the cost in the table nearly impossible to achieve.  The recent standby, Natural Gas, is now close to the bottom of the heap, and the old standby, Coal, is significantly more expensive.

There are very few externalities from Solar.  The initial cost of the panels, once very large, is approaching trivial and the cost of the land is dominant.  They have very few environmental consequences. (although not zero: the shade changes hunting patterns for predators, for example, and productivity of farmland is somewhat reduced).   The panels last for decades, although recycling them when they eventually do wear out is a small problem.

There are more externalities for wind.  Perhaps the worst is that they interfere with the flight of some birds.   They make a noise which can be annoying if you're close, and some people find them unsightly.  They last 10-20 years, and most of them can be recycled into new windmills when the time comes.

Hydroelectric power has a very high upfront cost, and a theoretical lifetime of about a century, but the production costs are extremely low.  They turn out to have had a much more profound impact than was at first realized, especially on wildlife, such as fisheries.  Fish ladders had seemed to work, but a lot of them were defective and only a tiny fraction of the fish got through, for example.

 Natural Gas, mostly produced in the US as a byproduct of oil drilling, or hydraulic fracturing, has come on line quite strongly in the last couple of decades.  The fuel is comparatively cheap, and produces less CO2 and other pollution per kWh than burning coal or liquid fuel, such as gasoline.  But still quite a lot.  Another useful technology has been Combined Cycle turbines, which pair an internal combustion gas turbine with a steam turbine that exploits the waste heat.  They're able to get 60% or more efficiency, while conventional turbines struggle to get 40%.  But perhaps the biggest advantage is that an individual turbine can be throttled, to match demand, without much efficiency loss.  This makes it incredibly useful as a variable power source that's easily adapted to rapidly changing situations.

Coal is a historic fuel.   Because it was easily available in most of the places to industrialize early (e.g. Scotland, northern Germany, much of the US, China), it was a convenient energy source, and in a very real way, powered the industrial revolution.   It is difficult to throttle power generation to match demand, and all of the ways cost a lot of efficiency.  Moreover, it's dirty, inefficient and has lot of nasty externalities, such as open pit mining and mountaintop removal.  It's been the most expensive of the leading ways to produce energy for about 3 decades and has been rapidly declining in popularity.

Sustainable Ponzi Schemes

https://en.wikipedia.org/wiki/File:Ponzi1920.jpg Charles Ponzi, 1882-1949 was a swindler who made $millions in the 1920s by promising investors huge  returns if they would send him money to invest.  They did, and early investors did get these huge returns: Ponzi was giving early investors money from later investors.   He didn't invent the swindle that today bears his name, but he was an effective publicist who got caught.  Many people have tried it, both before and after.  Such swindles cannot work over the long term, because eventually you will run out of investors, but they certainly can in the short term.

 Many people have pointed out that US Social Security is such a Ponzi scheme.  Well, yes and no.  If the scheme is set up so that it can never run out of investors, it can run indefinitely, and by doing so, it can generate a lot of value for people in the mean time by using the float wisely.  The stock market, and ultimately, the entire economy are also such schemes.   The trick to success is providing enough of a win that most people agree it's a good idea, while not really hurting anybody in the process.  In other words: truly giving value for money to the investors while not screwing anybody.

 Social Security works because as long as new people keep being born, and retirees eventually die, there is an indefinite supply of new investors to keep up with the growing pool of retirees.  The managers need to keep a positive balance, and to date, they always have.   As I write this, they'll be forced to reduce payments after 2034, but by increasing income a small amount, they'll be able to extend this easily.  Historically, they've mostly done this by increasing the cap on payroll deductions.  It's presently $184,500.  20 years ago, it was $94,200.  CPI over that time grew from 201 to 335, so this is faster than baseline inflation (which would have it at $157K), but not much.

The stock market is also such a "swindle".  Stock shares are ultimately worthless, but because investors have a chance to profit, through dividends, in the success of the underlying company, they'll buy in.  So many people have done this that there's a significant market for companies that do not pay dividends, called "growth stocks", which is entirely supported by speculation in the stock shares themselves.   At present time, the value of these shares (called market capitalization) of the world stock markets is about double GDP for the entire world (called Gross World Product or GWP).    Is this sustainable?  Probably not.  Most billionaires (possibly all) and a lot of millionaires are that wealthy solely because they own stock with that much market capitalization, and for a lot of them, their net worth would be highly negative if they were forced to live on the actual profits of the businesses they own.  This is especially true for businesses like "Private Equity" and "Hedge Funds".     E.g.: Tesla/SpaceX owner Elon Musk owns a $trillion in market cap, but these businesses all together brought in around $8B in profit last year.  And these are companies that are actually producing something.  Elon owns less than 15% of Tesla and 42% of SpaceX, so his actual value is well under $1B.  Hedge funds are even worse:  they produce nothing but the financial return.

 With all this market cap, owners are able to borrow against the asset to buy things, so without actually spending the asset, they are able to buy other things, such as yachts, broadcasting networks, sports teams, etc.  Every time they do this, they dilute the real value of both the shares they own and the things they're buying.   Dilution is very bad for the overall economy, because the people who actually do produce things: the workers, have a smaller and smaller share of the total money supply.  Eventually, there will be a comeuppance, and I don't see it being anything other than very ugly.    Millions will probably die, as died in previous "corrections", such as the English and US civil wars, WWI and II, various revolutions, etc.   

 We need to get this thing in balance.  The Wealth Tax, as proposed by Elizabeth Warren, is one way, but it taxes in a way that's uncontrollable, which can cause unintended harm.   I think income taxes should be very much higher on high incomes (presently capital gains are taxed at less than half what earned income is), and there should be a high tax on borrowing against appreciated assets over some high amount.   (presently it's actually a tax exemption).