More on Homelessness and Language

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A comment I received on Twitter regarding my earlier post suggested that the hippy days of travelling were merely a rite of passage. And a commenter here noted that the homeless hippy differs from the homeless we see in Vancouver today by virtue of choice. They are both correct to some extent. However, my original essay was not an attempt to suggest that the hippies of my day and the homeless of today shared an experience; it was, rather, thoughts on the use of language by outsiders to describe such experiences.

I am interested in following the idea that the hippy days were “a rite of passage”, which suggests that is part of a continuum of experiences undertaken by each generation. I’m not really sure that is accurate.

Thirty or thirty-five years before the hippies, economic circumstances around the world pushed hundreds of thousands of people (mostly men) out onto the road and obliged many of them to live in hobo jungles. They had little choice in the matter, and they were certainly NOT feeding into any “rite”.

My father’s generation, a decade or more later, were forced into a series of wars (World War 2, Korea, Malaya, etc) which often involved much traveling but, again, little in the way of choice.

And though my generation of travelers often considered ourselves to be the descendants of the hobo spirit, the economic circumstances were the exact opposite. The 1960s and early 1970s were a period of economic prosperity and full employment. We could go on the road without fear because we knew, consciously or otherwise, that whenever we returned to our point of origin there would be a job and money for us. In fact, my own hippy travels were broken up by periods when I “came home” and worked full time.

I don’t recall any similar movements in the 1980s or 1990s, until perhaps, later, for the Occupy movement. But they could trace their inspiration to the other side of 1960s hippydom which was the anti-war movement and before them to the Ban the Bomb marches of the 1950s and 60s.

The city homeless today have most affinity with the hobo jungles of the 1930s overlaid with the very modern problem of designer killer-drugs. It took a decade of make-work projects and then half a decade of war to “solve” the hobo problem. We can only hope that something less drastic can help us through the present dilemma.

On The Death of Karl Marx

It was 140 years ago today that Karl Marx died in London. In my opinion he got a bunch of stuff wrong, but he sure stirred the pot and made economics a lot more interesting.

Consumer Prices 2000-2020

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The always useful Visual Capitalist site has another great graph; this one showing the change in prices for various goods and services over the last two decades.

To quote the article:

“Even though essentials like education and heathcare have rocketed up, it’s not all bad news. Consumers have seen the price of some goods and services drop dramatically.

Flat screen televisions used to be a big ticket item. At the turn of the century, a flat screen TV would cost around 17% of the median income of the time ($42,148). In the early aughts though, prices began to fall quickly. Today, a new TV will cost less than 1% of the U.S. median income ($54,132).

Similarly, cellular services and software have gotten cheaper over the past two decades as well. Toys are another prime example. Not only are most toys manufactured overseas, the value proposition has changed as children have new digital options to entertain themselves with.

Over a long-term perspective, items like clothing and household furnishings have remained relatively flat in price, even after the most recent bout of inflation.”

I assume these are all US-based prices, but I think they are equally relevant to us here in Canada for the most part.

Dump The Banks

As anyone who has read the papers or seen the news in the last few years knows, banks around the world have broken numerous serious laws, have had to be bailed out with taxpayers money, and yet still pay millions of dollars to inept executives and billions more to stockholders.  It is estimated that Canadian banks will make $57 billion in profits this year, and pay out more than $19 billion in bonuses.

Many of the banks’ issues involve their connection to complex financial transactions that do nothing but make money for already-rich individuals. There has to be a better way, and there is.

I would oblige all banks to become credit unions and I would strictly limit their functionality.

Credit unions are not-for-profit institutions cooperatively owned by their members. They operate solely for the benefit of their members rather than for outside shareholders, of whom there would be none.  Their senior management is elected by the members and their policies are offered up for approval at regular meetings of the membership. Senior management remuneration would require members’ approval. The billions of dollars that are currently paid out in dividends to outsiders would be used to increase services and lower costs for the members. Any surplus could be re-paid to the members or added to the credit union’s capital.

Just this year’s profits alone would amount to a $1,700 payment for every Canadian, adult and child.

I would limit their functionality to the taking, managing and disbursement of members’ deposits, and to the issuance of personal loans (including credit cards) and personal mortgages.  Any member or corporation that required business loans, corporate mortgages, investments or insurance would turn to investment companies, mortgage brokers and insurance companies designed specifically for that function.

No one would be limited in their desire to engage in stock market or other investments.  But these would be handled entirely by companies separate from banks.   No longer would bank depositors’ cash be at risk in the marketplace for derivatives, for example.

Competition between credit unions, if such were needed, would become a function of service and accessibility.  I believe this would get us more branches on the streets and a more personalized service between member and bank.  It would bring banking back to the people, to a smaller scale that we can understand and control — after all, it is our money they are using.

An End To Tipping

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These days, it seems to me, that generally speaking only three types of people received (and/or demand) gratuities: restaurant staff (including delivery people), taxi drivers, and hairdressers. Why are they treated differently from others who give us service?

When I was a lad, we also used to give a Christmas “bonus” to the postman, the milkman, and the newspaper delivery boy: I don’t know that anyone does that anymore.

Once there may have been a good reason to give cash tips to those who gave service over and above what one might expect. However, in my seventy-plus years, I have noticed three glaring issues with that generous policy.

• One: tips are generally limited to restaurant servers, taxi drivers, and hairdressers, whereas the best service I ever get is from my pharmacy and from my supermarket, employees at which never expect or get tips.
• Second: servers, taxi drivers, and barbers now expect a tip even if their level of service is nothing special, and some get quite belligerent if they don’t get one.
• Three: their employers treat the fact their employees get gratuities as a way to pay them less as a regular wage.

It is also worth mentioning that the amount to tip a server, say, after a group meal often becomes the subject of heated and sometimes acrimonious debate.

I propose that gratuities (as a standard way of doing business) be prohibited, and I make the case that this will be better for the employees, can save customers money, and still cost the employer nothing.

Let us suggest that a nice meal out for two or three people carries a charge of $100. Under the current arrangement, most customers will then add a tip, say 20%, and the actual cost becomes $120. However, if under a no-tip policy, the servers are given a 15% wage increase and the business adds, say, 12.5% to its menu prices to cover the increase, then the customer will pay $112.50.

The employee benefits because their regular wage goes up. The customer benefits because their costs go down. The employer comes out even.

A win-win-win solution.

How To End Tipping

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Once there may have been a good reason to give cash tips to those who gave service over and above what one might expect. However, in my seventy-plus years, I have noticed three glaring issues with that generous policy.

• One: tips are generally limited to restaurant servers, taxi drivers, and hairdressers, whereas the best service I ever get is from my pharmacy and from my supermarket, employees at which never expect or get tips.
• Second: servers, taxi drivers, and barbers now expect a tip even if their level of service is nothing special, and some get quite belligerent if they don’t get one.
• Three: their employers treat the fact their employees get gratuities as a way to pay them less as a regular wage.

It is also worth mentioning that the amount to tip a server, say, after a group meal often becomes the subject of heated and sometimes acrimonious debate.

I propose that gratuities (as a standard way of doing business) be prohibited, and I make the case that this will be better for the employees, can save customers money, and still cost the employer nothing.

Let us suggest that a nice meal out for two or three people carries a charge of $100. Under the current arrangement, most customers will then add a tip, say 20%, and the actual cost becomes $120. However, if under a no-tip policy, the servers are given a 15% wage increase and the business adds, say, 12.5% to its menu prices to cover the increase, then the customer will pay $112.50.

The employee benefits because their regular wage goes up. The customer benefits because their costs go down. The employer comes out even.

A win-win-win solution.

Shop Local!

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Not everything found on Twitter is worth repeating, but this is:

Jobs In Demand

According to an article in Forbes magazine, these were the most in-demand jobs in 2021:

Dump The Banks

As anyone who has read the papers or seen the news in the last few years knows, banks around the world have broken numerous serious laws, have had to be bailed out with taxpayers money, and yet still pay millions of dollars to inept executives and billions more to stockholders.  It is estimated that Canadian banks will make $57 billion in profits this year, and pay out more than $19 billion in bonuses.

Many of the banks’ issues involve their connection to complex financial transactions that do nothing but make money for already-rich individuals. There has to be a better way, and there is.

I would oblige all banks to become credit unions and I would strictly limit their functionality.

Credit unions are not-for-profit institutions cooperatively owned by their members. They operate solely for the benefit of their members rather than for outside shareholders, of whom there would be none.  Their senior management is elected by the members and their policies are offered up for approval at regular meetings of the membership. Senior management remuneration would require members’ approval. The billions of dollars that are currently paid out in dividends to outsiders would be used to increase services and lower costs for the members. Any surplus could be re-paid to the members or added to the credit union’s capital.

Just this year’s profits alone would amount to a $1,700 payment for every Canadian, adult and child.

I would limit their functionality to the taking, managing and disbursement of members’ deposits, and to the issuance of personal loans (including credit cards) and personal mortgages.  Any member or corporation that required business loans, corporate mortgages, investments or insurance would turn to investment companies, mortgage brokers and insurance companies designed specifically for that function.

No one would be limited in their desire to engage in stock market or other investments.  But these would be handled entirely by companies separate from banks.   No longer would bank depositors’ cash be at risk in the marketplace for derivatives, for example.

Competition between credit unions, if such were needed, would become a function of service and accessibility.  I believe this would get us more branches on the streets and a more personalized service between member and bank.  It would bring banking back to the people, to a smaller scale that we can understand and control — after all, it is our money they are using.

Patterns of Inflation

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There has been much talk lately of rampant inflation and the potential repercussions. These graphs from the Economist show how different today’s inflation is when compared to the last occurrences in 1969 and 1984 when eggs and car insurance were primary components..

Graph: Economist

The Gig Economy

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A new report published in the Guardian shows that 15% of workers in Great Britain — 4.4 million people — are now employed in the gig economy, or what they call working for “platforms”. These are companies such as Uber, Deliveroo, and parts of the Amazon empire.

The growth in this kind of employment is staggering: 6% of workers in 2016, 12% in 2019, and 15% today.

“[T]he research indicated an especially strong rise in such employment among couriers and those doing other driving work, as well as in errand and odd jobs services. Almost a quarter of workers have done platform work at some point, up from one in 10 in 2016, the study found.

It sounds like an economic benefit for the workers but it has been shown that they often have to work multiple jobs, have low average incomes, and rarely have the financial and security benefits that more regular jobs would offer.

“[P]latforms including Deliveroo, Stuart and Amazon Flex say their workers are independent self-employed contractors without such basic rights.”

“Gig economy platforms are using new technologies to carry out the age-old practice of worker exploitation,” said [Frances] O’Grady [General Secretary of the Trades Union Congress]. “Too often gig workers are denied their rights and are treated like disposable labour.”

In Canada, the situation is similar, with 10% of the workforce in the gig economy. Payment issues seem to dominate the problems here:

“For one in five Canadian gig workers, it currently takes at least a couple of weeks to receive payment after their work is done. Moreover, the gig workers who do get paid on the same day that their contract is done are predominantly paid by cash (59 percent), which creates challenges in terms of traceability.”

It’s a changing world, sure enough. I’m all for individual freedom of choice, for flexibility, for the kind of independence that the gig economy should be able to supply. I do however worry that certain protections we take for granted may be lost in the process, and within a capitalist economy is it hard to see how they can be replaced.

The Inequality Gap: Billionaires v. The Rest

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From the time the covid-19 pandemic began through to this week, billionaires in the United States increased their worth by $2.1 TRILLION to a total of $5 TRILLION.

This compares to the 89 million Americans who lost their jobs, the 45 million sickened by the virus, and the 724,000 who died from it.

The 745 billionaires in the US (up from 614 in March 2020) now own wealth almost double the $3 trillion estimated to be held by the lowest 50% of households.

As Inequality.org notes:

“Most of these huge billionaires’ gains will go untaxed under current rules and will disappear entirely for tax purposes when they’re passed onto the next generation … On average, billionaires pay an effective federal income tax rate of about 8 percent when the increased value of their stock is counted, according to the White House. This is a lower rate than that paid by many middle-income taxpayers, including teachers, nurses, and firefighters … The country’s 25 top billionaires paid a tax rate of just 3.4 percent on a $400 billion increase in their collective fortune between 2014-18.

Just the recent $2.1 TRILLION gain for these 745 individuals would pay for 60% of Biden’s 10-year economic recovery plan.

This is what modern finance capitalism brings us. It cannot be allowed to continue.

Inequality

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The graphic above is from the always interesting Visual Capitalist site.

The numbers speak for themselves: Poverty for the masses is a choice by the rich.

What Jobs?

The always useful Visual Capitalist site has come up with this interesting graphic to visualize how the job market may change over the next ten years:

Health care jobs seem to be the big winner; and that should be no surprise given the ageing population and the current fatuation with covid.

The Practical Alternative To Work

 

Credit:  found on Twitter

How Trickle Down Economics Works

 

 

I wish I had someone to credit for this illustration. Found it on twitter unattributed.

Turn Corporate Taxes Into Licenses

The new Trump tax code,

“lowered the U.S. corporate tax rate from 35% to 21%, but in practice large companies often pay far less than that because of deductions, tax breaks and other loopholes. In the first year of the law, the amount corporations paid in federal taxes on their incomes – their “effective rate” – was 11.3% on average, possibly its lowest level in more than three decades … [T]he new law introduced many new breaks and loopholes.”

Corporations around the world play the same tricks. Often they reside in tax havens and levy enough “corporate service charges” on their overseas subsidiaries to ensure that no taxes are paid.

And this all comes at a cost to the rest of us.  As corporate taxes fall and government deficits grow, there is increasing pressure to reduce those deficits by reducing spending on welfare services, health, and education.

Centre-right politicians have suggested that lowering corporate tax rates will encourage more companies to stay in-house as it were.  That is just an excuse to make the rich richer as the new Trump tax code proves.  There is a simpler and much more efficient way.

I suggest that corporate income taxes be eliminated completely. They should be replaced by a “license to operate” fee equal to, say, 10% of revenues earned in the country no matter where the head office is based. Simple to understand, simple to manage, and, I suspect, very difficult to get around.

Country of ownership becomes immediately irrelevant, and transfers to an offshore HQ will be pointless for tax purposes. Indeed, they may well create a double taxation situation in which those transfers become taxable revenue in the home country. It also gives corporations the right to NOT operate in any particular country if they choose to forgo the revenues.

Finally, I would make this tax law bullet-proof by including a provision that, should some smart accountant or lawyer find a loophole, then that loophole is closed retroactively to the dater of the law’s passage.

We should give this a try. It is a commonsense approach, eliminates the need for accountants, lawyers, and an army of regulators. It will produce fairness across the board.

Keeping Banks Safe For Our Money

As anyone who has read the papers or seen the news in the last few years knows, banks around the world have broken numerous serious laws, have had to be bailed out with taxpayers money, and yet still pay millions of dollars to inept executives and billions more to stockholders. Many of their problems involve their connection to complex financial transactions that do nothing but make money for already-rich individuals. There has to be a better way, and there is.  The economic melydown created by the covid-19 crisis seems a perfect time to reorganize the sector.

I would oblige all banks to become credit unions and I would strictly limit their functionality.

Credit unions are not-for-profit institutions cooperatively owned by their members. They operate solely for the benefit of their members rather than for outside shareholders, of whom there would be none.  Their senior management is elected by the members and their policies are offered up for approval at regular meetings of the membership. Senior management remuneration would require members’ approval. The billions of dollars that are currently paid out in dividends to outsiders would be used to increase services and lower costs for the members. Any surplus could be re-paid to the members or added to the credit union’s capital.

I would limit their functionality to the taking, managing and disbursement of members’ deposits, and to the issuance of personal loans (including credit cards) and personal mortgages.  Any member or corporation that required business loans, corporate mortgages, investments or insurance would turn to investment companies, mortgage brokers and insurance companies designed specifically for that function.

No one would be limited in their desire to engage in stock market or other investments.  But these would be handled entirely by companies separate from banks.   No longer would bank depositors’ cash be at risk in the marketplace for derivatives, for example.

Competition between credit unions, if such were needed, would become a function of service and accessibility.  I believe this would get us more branches on the streets and a more personalized service between member and bank.  It would bring banking back to the people, to a smaller scale that we can understand and control — after all, it is our money they are using.

 

Conspicuous Inequality

If you were ever to wonder what drives the revolutionary urge to throw capitalism from its arrogant throne, look no further than this single graph:

How anyone can possibly justify this in terms of equity or humanity or even efficiency escapes me.

This data is from a valuable article entitled “Five Undeniable Long Term Trends Shaping Society’s Future” at the always interesting Visual Capitalist.

Fast Food Doing Well?

We read and hear a lot about the damage the corona virus pandemic and the associated restrictions are having on the hospitality industry including restaurants. For example, as the Commercial Drive BIA reported at the last GWAC meeting, revenue for local bars and restaurants is down 50-75% this year over last. However, random headlines would also suggest that fast food franchises are thriving.

Every once in a while I find myself perusing the news at Nation’s Restaurant News (mainly to look at fascinating new menu options) and just today I saw the following four stories being reported.

• Jack in the Box Restaurants increased sales by 12.2% and are planning on expanding;
• A franchise called Torchy’s Tacos just found $400 million in new financing;
• The restaurant arm of a California venture capital company just expanded their holdings to add 37 new Pizza Hut locations; and
• In-N-Out Burgers‘ new location in Colorado caused a 12-hour wait and miles of traffic jams.

And that was just a quick look today.

Clearly that sector — perhaps because of their long history of drive-through contactless pickups — is doing OK during the pandemic.