Marijuana Has Gone To Pot

October 22, 2019

According to a fascinating feature in Forbes, the major legal marijuana companies are in terrible trouble — because they are growing more weed than anyone could smoke in several lifetimes.

“In just a year after Canada’s historic pot legalization, pot producers built up a massive surplus of pot. In fact, only 4% of pot produced in Canada in July has been sold!”

This has caused the business market to crash.  Aurora Cannabis is “Canada’s largest cannabis producer and one of the most popular pot stocks on earth. In fact, this stock has recently topped Apple as the favorite stock among American Millennials.” But that hasn’t saved the company stock price:

“If you look at Aurora Cannabis’s most recent financial report, you’ll see its revenue grew 52% in the last fiscal quarter, compared to the previous quarter. That sounds good… but it’s hiding a dirty secret.   Aurora Cannabis is actually dumping part of its harvest into “wholesale,” which means it is selling it for cheap… according to a line buried deep in the company’s Q4 financials.  Last fiscal quarter, the company dumped $20 million worth of pot, a 869% increase from the previous quarter. It is doing this because there’s not enough demand from consumers.”

 

The Forbes article likens this to the situation in American agriculture in the 1930s when an overabundance of product caused crops to be burned just to maintain prices at a floor level. They also suggest that the situation is likely to get worse as most large marijuana producers have invested heavily to increase production in the future.

No wonder then that in Canada, street (illegal) prices have fallen while legal dispensaries have to charge much more to meet regulatory stipulations, and thus the number of legal stores has not grown as expected and government revenues are not as they had hoped.

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Democracy In Chains

October 8, 2019

There are plenty more libertarian role models available in our culture than there are anarchistic ones; and given the apparent similarities between the two concepts of individual liberty, I occasionally have to remind myself why I am an anarchist and not a libertarian. It’s the economy, stupid, and everything that flows from that.

  • Libertarians believe in the exploitation of the capitalist system (stripped of State-imposed rules and regulations) and the supreme sanctity of private property no matter how acquired; many have a tendency toward exclusionary -isms (racism, sexism, nationalism, fascism); they believe in no government other than that which protects their interests and assets (police, army, judiciary; jails);
  • Anarchists conceive of a non-exploitative production/consumption system and have a strong tendency toward inclusive community building; they believe in autonomous self-government by individuals and consensual groupings only.

We are currently living through an experiment in which the Libertarian fringe has taken control of the central government.  Earlier this year, I was read an article about how the GOP in Missouri were working to overturn a state constitutional amendment improving ethical governance that passed overwhelmingly by popular vote just a month ago. They noted:

“the Republican Party’s newfound disdain for democracy. Republican leaders across the country have tried to make voting more difficult; to keep some Americans from voting; to interrupt vote counts before they are complete; to gerrymander in the extreme; and now, in Missouri, to repudiate a constitutional amendment approved by 62 percent of the state’s voters.”

Everything in that paragraph is true, except that the Republican’s dislike for genuine democracy is hardly “newfound.” I have been reminded of this most recently through reading Nancy MacLean‘s vital Democracy In Chains: The Deep History of the Radical Right;s Stealth Plan For America. which is a book that every resister needs to read to understand what it is we are facing.  The thesis of the book is that current libertarian bent of the far rights financiers (a la Koch brothers and too many others) is fuelled and driven by the political-economic theories propounded by James M. Buchanan who was awarded the Nobel Prize for economics in 1986.  Buchanan developed his theories in the 1950s and 1960s when the current wave of capitalist barons were being educated.  [Page number references are to this volume).

“Buchanan believed that “majority rule, under modern conditions, had created … a risk to capitalism … The goal of the cause, Buchanan announced … must shift from who rules to changing the rules … the cause must figure out how to put [constitutional] shackles on public officials.”  [pages xxv-xxvi]  “A government based in the naked principle that the majority ought to govern, Calhoun [had] warned, was sure to filch other men’s property and violate their liberty.”  “The power to tax is the power to destroy,” wrote F.A. Harper. Democratic government was increasing “the power of certain persons to destroy other persons.” [6, 132]  Buchanan said modern rules fail to establish ironclad rules for “curbing the appetites of majority coalitions … There are relatively few effective limits on the fiscal exploitation of minorities through orderly democratic procedures.”  [150]  “The project must aim toward the practical ‘removal of the sacrosanct status assigned to majority rule’.”  [184]

Buchanan first made his name opposing taxes to pay for schools.  If a constitution enabled what Buchanan would call socialism — “which in Virginia’s case meant requiring a system of public schools — it would be nearly impossible [to achieve] his vision of radical transformation, without changing the constitution.” [72]  An important supporter, Oliver Hill, NAACP lawyer opposed to tax-paid vouchers for private schools, opined that: “No one in a democratic society has a right to have his private prejudices financed at public expense.” [69]  This group of thinkers were often opposed to educating the masses at all. As Gordon Tullock put it: “we may be producing a positively dangerous class situation” by raising their sights. [106]

More broadly, Buchanan criticised modern economics and its value system

“because the very idea that inequality was a bad thing led to looking for remedies, which in turn led the discipline toward an applied ‘mathematics of social engineering’.” [96-97].  He  “wanted not just to rein in taxation and regulation, but also to dethrone the dominant paradigm of Keynsian econonics that was the core of the mid-century social contract.”  [136]  A later disciple, Paul Ryan said “public provision for popular needs not only violates the liberty of the taxpayers whose earnings are transferred to others, but also violates the recipients’ spiritual need to earn their own sustenance.” [213]  Liberty Fund economist Gary M. Anderson alleges that public health is nothing more than “a device use by organized interest groups to redistribute wealth to themselves.”  [214]

And Buchanan’s theories began to enter the realm of social conservatism.  A Virginia petition of the early 1960s was very clear about its position:  “Individual liberty is a higher good than racial equality.”  [94]  The Goldwater campaign of 1964 openly attacked the Civil Rights Act on Buchananite-libertarian grounds, complaining

“that it used coercive means to make all conform to the values of the majority, in violation of the liberty of the white minority that opposed it.” [84]

Buchanan eventually came to believe that

despotism may be the only organizational alternative ... There was no glossing over it anymore: democracy was inimical to economic freedom” [151-152]  Charles Koch called Greenspan and others “sellouts”  because they sought “to make government work more efficiently when the true libertarian should be tearing it out at the root.” [135]  Buchanan “valued economic liberty so much more than political freedom that he simply did not care about the invitation to abuse inherent [as in Chile] in giving nearly unchecked power to an alliance of capital and the armed forces.”  [165]  He wrote in 2005 that those who fail to save for their future needs “are to be treated as subordinate members of the species, akin to … animals who are dependent’.”  [214]

Given the static two-party system in the US, it came as no surprise that Buchananite disciples discovered the Republican Party as a ready-made vehicle for political advancement.

“But while these radicals of the right operate within the Republican Party … the cadre’s loyalty is not to the Grand Old Party … Their loyalty is to their revolutionary cause … The Republican Party is now in the control of a group of true believers for whom compromise is a dirty word”  [xxvii-xxvii]

Political theorist S.M. Amadae says Buchanan “was mapping a social contract based on ‘unremitting coercive bargaining’ in which individuals treated one another as instruments towards their own ends, not fellow beings of intrinsic value.”  [151]

*****

This is a significant addition to our knowledge of how the elites run our lives and what they have in store for us.  Well worth the read.

 


Reforming Corporate Governance

September 14, 2019

This is the third in a series of discussions about changes that need to be made to modern capitalism to protect the mass of humanity in advance of a full and revolutionary change to mutual aid and co-operativism. In the first, I proposed new taxation rules for corporations and in the second, I suggested changes in structure for banks; here I discuss corporate governance in more general terms.   I note once again that these are just notes, eager for debate and adjustment.

The key to the improvements required for corporate governance is a constitutional amendment (or similar, depending on each national situation) stating specifically that corporations do not have the same rights as human beings; they have only the specific and particular rights granted to them by legislative or executive action.

More specific changes would include a ban on quarterly reporting and forecasting; possibly the half-yearly reports, too.  This will enable a new cadre of senior executives to concentrate on managing their companies for the long-term rather than for short-term stock market speculation. The CEO of the world’s largest investment management firm, Larry Fink of BlackRock agrees that CEOs should “focus on creating long-term value instead of emphasizing quarterly targets.”  This is such a fundamental and important priority that I would impose severe penalties (including mandatory jail time) on CEOs for any breach.

Loans from the taxpayer would be permissible (see the recent Bombardier requests) but indulgence of this kind in state socialism would trigger a specific set of rules of governance. Until the loan has been completely repaid:

  • no dividends or similar may be paid to shareholders;
  • no share buy-backs or similar schemes are permitted;
  • no increase in executive emoluments (of any and all kinds);
  • no executive bonuses of any form.

Lay-offs totalling 5% or more of company personnel in any two-year period trigger the same rules as loans for a period of two years; this sanction shall not be concurrent with the loans’ rules. The two-year sanction for any breach of maximum lay-offs will be imposed at the end of any loan repayment.

Corporations may pay unlimited salaries and bonuses to executives, subject to sanctions not being in place. However, the portion of any emolument exceeding thirty (30) times the average non-executive wage or salary shall not be a deductible expense for purposes of determining the corporation’s taxes (in a corporation income tax situation), or shall be added to aggregate revenues (in the license scheme proposed earlier). This will assist the system to return to the Eisenhower days (for example) when profits from increased productivity were shared more equitably among all workers. Currently, CEO pay and benefits are on average more than 300+ times that of the average employee.

Bankruptcy rules for corporations must be changed to ensure that non-executive wages, salaries, and pensions are first in line for payment. Labour should not be a risk proposition. If you work, you must be paid. I believe trade suppliers should be paid next. Banks, other lenders, and investors have to bear the risks that their rewards and “free enterprise” suggests.

Finally, no corporation should be allowed to make political donations (in cash, in kind, through third-parties, etc. without limitation) without the express consent in advance of sixty percent (60%) of all shareholders both as to amount to be contributed, and to whom donated. This rule will stay in place until we rid ourselves of political donations altogether.

If we put these rules in place, then we will mitigate some of the worst excesses of modern capitalism. If they stay in place long enough, these changes will tend to lean us in the direction of mutual aid and co-operativism, which should be the ultimate aim.


Wise Words on Immigration

June 9, 2019


Capitalism = Inequality

April 9, 2019

 

“This is a truly staggering fact: Wall Street bonuses totaled $27.5 billion last year, which is 3 times more than the combined annual earnings of *all* American workers employed full-time at the federal minimum wage.” — Robert Reich.

That is a sentence that needs to be read over several times, really slowly, to let the meaning sink in.

I have written how I would deal with banks.

 

 


Voluntary Taxation

April 3, 2019

It is tax time again.  And yet again I make my pitch for an all-voluntary tax system.

Way back in June 2002, I proposed doing away with all non-voluntary taxation by replacing income and all other taxes with a consumption tax. This is what I wrote in 2002, and I still see little need to change the basic structure proposed:

The basic principles for a new tax scheme are that it should be essentially voluntary, and concerned with ensuring equal opportunities for all. Therefore, I would propose the elimination of all personal and corporate income taxes as they violate by their very nature the voluntary aspect of taxation. I propose to replace the revenue with an all-inclusive sales tax on goods and services with a few, well-defined exceptions (the figures below represent Vancouver costs of living and could be adjusted as required):

• all foods
• shelter (to $24,000/year rent or the first $700,000 of purchase)
• all non-cosmetic medical, dental and optical-health services
• all educational services
• financial services (bank charges etc) to $500/year
• legal services to $2,500/year

The sales tax should be a single percentage across all categories of goods and services in order to reduce accounting and bureaucratic requirements.

The use of the sales tax for the bulk of government revenues brings a great deal of volunteerism to the matter. The exceptions provide an important and necessary break for those goods and services which can be described as the necessities of life; above that, the more I choose to buy, the more taxes I choose to pay.  Rampant consumerism therefore becomes a tax liability.

On the other side of the ledger, also to the good, the simplicity of the scheme allows for huge bureaucratic savings in administration and zero non-compliance. The tax would also be levied on all capital transfers outside the jurisdiction. It will oblige tens of thousands of “tax lawyers” to find genuine productive employment.

All government activity should be categorized into line items that can be shown to have a direct bearing on the level of the sales tax. In this way, the people are enabled to make decisions about what sections of government can be further cut to reduce the level of taxation. Conversely, any additional work to be performed by the government can be readily calculated as an addition to the sales tax.

In other words, the cost of a government service will be immediately and directly calculable — and the people can make their judgments on whether to go ahead with it on that basis. It is one thing to say that a government program costs $600 million — an abstraction at best; it is quite another to say that program x will cause a rise in the sales tax by 1%.

In a capitalist system where the government bureaucracy acts as a nanny on so many issues, taxation of some sort is inevitable, as will be resistance to such taxation. The sales tax that I propose will allow the taxation system to operate on a voluntary basis, thus achieving considerably greater support and compliance.

It might be claimed that rich folks will simply remove their money from Canada to avoid the sales tax.  Possibly true, but in my scheme, the sales tax would apply to all such financial transfers from the moment the scheme is announced.

Finally, I believe that many political types concern themselves far too much with how much money people make. If we concentrate on the input (salaries, bonuses etc) there will always be those who can play fast and loose with the rules.  However, if you apply taxation to outputs (purchases, transfers etc), the returns will always be progressive: the more they spend, the more they’ll pay.


And The Rich Get Richer….

March 15, 2019

Back in January, I reported on an Author’s Guild report that showed the average income for a full time writer in the US in 2017 was just $20,300.  Of course, averages are a function of the highest and the lowest figures available.

Literary Hub has compiled a list of the high numbers over the last ten years. These are the estimated incomes of the top writers since 2008:

1. James Patterson : $836 million
2. J. K. Rowling : $546 million
3. Stephen King : $259 million
4. Danielle Steel : $231 million
5. John Grisham : $192 million
6. Jeff Kinney : $165 million
7. E. L. James (Tie) : $153 million
7. Janet Evanovich (Tie) : $153 million
9. Nora Roberts : $128 million
10. Suzanne Collins : $114 million
11. Dan Brown : $111 million
12. Dean Koontz : $101 million
13. Rick Riordan : $91.5 million
14. Stephenie Meyer : $75 million
15. Ken Follett : $68 million
16. George R. R. Martin : $60.5 million
17. Veronica Roth (Tie) : $52 million
18. Bill O’Reilly (Tie) : $52 million
19. Nicholas Sparks : $46 million
20. John Green : $45 million
21. Tom Clancy : $35 million
22. David Baldacci : $26 million
23. Paula Hawkins : $23 million
24. Gillian Flynn : $22 million
25. Michael Wolff : $13 million

Extraordinary numbers, I think. They prove the power of TV and movies to vastly expand the earning capacity of the novels, especially those in series.

And they show, as if we needed more evidence, that the inequality of rewards inherent in capitalism are just as prevalent in cultural industries as in any other.