Science Skepticism

It seems to me….

Anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that ‘my ignorance is just as good as your knowledge’.” ~ Isaac Asimov[1].

Tribalism and anti-intellectualism seems to be triumphing over facts and reason. Moving forward will require understanding the cultural and psychological reasons why people reject scientific thinking. Science denial is basically anti-intellectualism. It’s a thread that has run though American society for decades, possibly even centuries.

The problem people have with science is never about the actual science. People have a problem with the implications of science for their worldview and, even more important, for their ideology. When anti-intellectualism rises to the surface, it’s due to new, urgent results coming out of the scientific community that challenge the perspective and status quo of people with power.

Admitting to a certain amount of skepticism about almost everything does not exclude believing generally accepted scientific “facts”: facts remain valid regardless of one’s personal beliefs. Many do not seem to understand that science is a method for producing incrementally useful approximations to reality. There never can be anything that should be construed as constituting an absolute or universal truth, certainty, or exactness. No theory can ever be declared totally correct or complete; good theories always continue to evolve and embed innovation.

Some people skeptically distrust scientific pronouncements. Many others have difficulty understanding this rejection of scientific facts. Facts are facts: end of discussion. Skeptics however, place their trust in political or religious beliefs, cultural identity, or personally intuitive inborn theories. Some people will believe the unbelievable simply because they want to, not because the arguments for it somehow out weigh those against it. Everyone wants certainty and predictability; no one is comfortable with uncertainty.

As everyone who has studied any formal logic is aware, logic is just one of the ways of knowing about the world – and it is insufficient (e.g., consider Gödel’s[2] Incompleteness Theorem). The best method of establishing the validity of a claim, especially in science, is to compare the claim with observation and then to replicate it through experimentation. This frequently even involves testing of alternate possibilities disproven by independent researchers. The scientific community never accepts any claim or result that has not been independently verified.

Universal truth, specifically in the realms of science, advances upon the shoulders of those who have preceded but to what extent is any of it actually true? Advances are only accepted somewhat generationally with the demise of those responsible for, and in which they have a personal vested interest, “inventing” the currently popular religiously accepted dogma of putative facts. But those who popularized the past still exert control over the present. It is their version of the truth that is generally accepted as the foundation upon which the next edifice is constructed. How is anything really known to be true or to having not actually been invented dependent on other supposedly proven theories of knowledge?

Just as the resistance to new ideas frequently restrict the development of knowledge, the very unquestioned existence of what is accepted as an elementa commemorare fundamentalia (fundamental fact) forms the basic foundation for future research and interpretation of experimental results. Experimental methodologies and testing could therefore conceivably be flawed by the prejudicial biases of the researcher – a fragile house of cards constructed upon a possibly flawed foundation.

An experiment might challenge a prevailing idea – and if the experiment is confirmed, the older idea is supposedly either replaced or updated. In many instances, the prevailing belief is simply modified as slightly as possible to incorporate the desirable results. Unless the framework becomes totally unusable, the familiar theory is retained to avoid revolution.

But who can actually determine truth especially in fields not lending themselves to experimental decisiveness? It is difficult to challenge a prevailing concept. Scientists can be surprisingly quick to adopt novel theories if those theories are well supported but in fields where results are not totally clear, prevailing beliefs can be extremely persistent. While some new theories replace old ones, some new ideas seemingly take their place only in what was previously unexplained or in what might be considered a vacuum devoid of theory.

There never can be a totally objective truth in science with a reality independent of scientific claims. While some theories are absolutely true, others are dependent upon initial conditions severely limiting their objectivity. E.g., duplication of medical science trials can be difficult due to individual gene expression differences.

Science is all about measuring rather than seeing as what frequently is observed is skewed by our preconceived ideas, post-conceived notions, and outright biases. Changes to scientific theories does not necessarily totally eliminate error but is the integration of new information or recognized connections into what is understood.

In some fields, such as the social sciences, simple explanations are insufficient for they are based upon rational principles or scientific understanding of human behavior. There are essentially no equations in psychology or sociology. The universe and everything in it is complex and most easier questions have already been answered.

Part of the problem is not that the people who do not believe in climate change, who choose to not vaccinate their children, or who deny evolution by natural selection are necessarily uninformed. It is that regardless of overwhelming evidence, they refuse to adjust or abandon their erroneous beliefs.

Because climate solutions appear to challenge the ideology of the right-hand side of the political spectrum, it has become one of the most polarized issues in the U.S. We’ve become so tribal that if you’re on the left, it’s like a statement of faith to say climate change is real. And if you’re on the right, it’s a basic tenet to say climate change is not real.

Climate change, of course, is also a tragedy of the commons and requires communal action. Yet the U.S. is the number-one most individualistic country in the world founded on a revolt against big government and taxes. 20 years’ worth of studies indicate that scientists systematically underestimate the rate and speed of change.

It does not help that the White House and Congress have lost their way when it comes to science. Notions unsupported by evidence are used in forming decisions about environmental policy and other areas of national interest including public health, food safety, mental health, and biomedical research. Congressional committees that craft legislation on these matters do not even have formal designated science advisers. The House Committee on Science, Space, and Technology’s leader, Republican Representative Lamar Smith of Texas, clearly misunderstands the scientific process which includes assessment by independent peer reviewers prior to publication. The result has been a nakedly anti-science agenda.

Elected officials, especially the heads of Congressional science committees, should not be allowed to interfere with the scientific process, harass researchers, or deny facts that fit poorly with their political beliefs. Both the House and Senate science committees should create independent groups of impartial researchers and policy specialists to advise them on science and technology issues including those related to energy, genetically modified foods, and clean air and water.

Congress used to have a body of this kind: the widely respected Office of Technology Assessment (OTA). The OTA was an office of Congress created in 1972 serving members and committees overseen by a bipartisan board of senators and representatives. The OTA created reports on scientific issues ranging from alternative fuels to cancer and presented Congress with options it could pursue to reach different goals. A conservative controlled Congress eliminated its funding during budget reductions in 1995. Many have since advocated for the OTA’s return.

Stupidity is not a lack of knowledge, education, skill, or savvy[3]. It is not the same as ignorance, incompetence, or folly (although it often leads to foolish behavior). Stupidity is a kind of intellectual stubbornness where people have access to all the information necessary to make an appropriate judgment, to come up with a set of reasonable and justified beliefs, and yet fail to do so – they believe only what they want to believe. Not only do they not have any good reason for thinking that what they believe is true, there often are very good reasons for knowing that what they believe is false. They are not acting in a rational manner.

Facts remain facts regardless of beliefs to the contrary. Failure to accept those facts when provided proof of correctness constitutes irrational stupidity.

That’s what I think, what about you?

[1] Isaac Asimov was an American writer and professor of biochemistry at Boston University known primarily for his works of science fiction and popular science. A prolific writer, he wrote or edited more than 500 books and an estimated 90,000 letters and postcards. His books have been published in 9 of the 10 major categories of the Dewey Decimal Classification.

[2] Gödel’s Incompleteness Theorems, Wikipedia, https://en.wikipedia.org/wiki/Gödel%27s_incompleteness_theorems.

[3] Nadler, Steven. How to Fix American Stupidity, Time, http://time.com/4937675/how-to-fix-american-stupidity/?utm_source=time.com&utm_medium=email&utm_campaign=the-brief&utm_content=2017091317pm&xid=newsletter-brief, 12 September 2017.

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Posted in Beliefs, Climate Change, Denial, Environment, Facts, Gödel, Incompleteness Theorem, Intellectualism, Kurt Gödel, Lamar Smith, Office of Technology Assessment, OTA, Personal, Religious, Science, Septicism | Tagged , , , , , , , , , , , , , , , , | Leave a comment

Effects of Economic Inequality

It seems to me….

Ill fares the land, to hastening ills a prey,
Where wealth accumulates, and men decay
.” ~ Oliver Goldsmith[1].

Every previous civilization has been destroyed by the unequal distribution of wealth and power. The more advanced the community, the greater the intensity. Wages and interest fall while rents rise. The rich get richer, the poor grow helpless, the middleclass is swept away.

The U.S. has become a society in which a growing share of income and wealth is concentrated in the hands of a small number of people and these people have huge political influence. Inequality has risen in most advanced economies but is most pronounced in the U.S. Economists have listed many causes for the rise of inequality: technology, education, globalization, decline of unions, a falling minimum wage… but changes in culture and values have also played a major role. Economies are more successful when there is only minimal gap between rich and poor and growth is broadly based. A successful economy also depends on meaningful opportunities for work for everyone who wants a job.

Trend lines indicate a clear direction in which our economy is moving – a direction resulting in an increasingly bifurcated economy where educational attainment closely correlates with income: higher education, higher income; less education, less income.

A fundamental insight gained from the Industrial Revolution is that when education fails to keep pace with technology, the result is inequality – without the skills to stay useful as innovations arrive, workers suffer. The combination of education and innovation has led to prosperity but now robotics and artificial intelligence call for another education revolution where people must be able to acquire new skills throughout their careers.

We as a nation have chosen to prioritize tax shelters over minimum wages, subsidies for private jets over robust services for children to break the cycle of poverty. And the political conversation is often not about free rides by corporations but about free rides by the impoverished.

It is unfortunate that some commentators still write as if poverty were simply a matter of values, as if the poor just make bad choices; that all would be well if they adopted middleclass values; that the poor cause their own poverty and could easily escape if only they acted like members of the upper middleclass. That might have been a sustainable argument four decades ago but, at this point, it should be obvious that middleclass values only flourish in an economy that offers middleclass jobs.

The high U.S. Gini coefficient (about 0.81 – the highest among industrialized nations), which has continued to climb over the past few years, should be a warning of rising dissatisfaction among those disaffected. The U.S. middleclass has been decimated in recent years providing those less well-off with little prospect of self-improvement. It is unfortunate that in our bifurcated economy that the people responsible for change are insulated from the effects of their poor policy decisions. The cost of our recent economic recovery following the last recession is that while gains from growth, low inflation, and technological productivity have been broadly spread across our entire population, the jobs lost and wages reduced are concentrated among a smaller lower-income group of our country.

When individual incomes are flat or declining, wealth inequality becomes politically divisive. Preferably, that dissatisfaction brings about political change but if the political system responds only to the benefit of the wealthy, it can become a direct threat to political stability. Those perceiving themselves to be excluded may resort to non-political remedies or candidates posing a threat to liberal democracy. The recent increase in alcohol and drug addiction and suicide especially among non-Hispanic middle-aged Caucasians in all probability is at least partly attributable to a perceived decline in social and wealth opportunity.

When the disparity of conditions increases, democratic elections make it easy for populists to seize the source of power. Many feel no connection with the conduct of government. Embittered by poverty, they are ready to sell their votes to the highest bidder or follow the most blatant demagogue. Unequal distribution of wealth inevitably transforms popular government into despotism[2]. It is the voices of these people who are understandably angry who are primarily responsible for electing Trump.

That’s what I think, what about you?

[1] Oliver Goldsmith was an 18th century Anglo-Irish essayist, poet, novelist, dramatist, and eccentric.

[2] George, Henry. Progress and Poverty, Published 1879.

Posted in AI, Artificial Intelligence, Automation, Automation, Caucasian, Demagogue, Economics, Economist, Economy, Education, Elections, Employment, Employment, employment, Gini Coefficient, Income, Income, Industrial Revolution, Inequality, Jobs, Jobs, middleclass, Non-Hispanic, Populism, Poverty, Robotics, Technology, Trump, Unemployment, Unemployment, Wages, Wealth | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

U.S.-Iranian Relations

It seems to me….

Iran rejects weapons of mass destruction based on its belief system, its religious belief system, as well as well as its ethical standpoint.” ~ Hassan Rouhani[1].

The nuclear agreement signed with Iran on 14 July 2015, called the Joint Comprehensive Plan of Action (JCPOA), formally went into effect on 18 October 2015 though as it was never ratified as a treaty by the U.S. Senate, its legal applicability under Trump is questionable.

Political relations between Persia (Iran) and the U.S. began when the Shah of Persia, Nassereddin Shah Qajar, officially dispatched Persia’s first ambassador, Mirza Abolhasan Shirazi, to Washington D.C. in 1856. (The naming convention changed from Persia to Iran, the country’s actual name in Persian, in 1935.) In 1883, Samuel G. W. Benjamin was appointed by the U.S. as the first official diplomatic envoy to Iran however ambassadorial relations were not formally established until 1944.

A biblical verse “As ye sow, so shall ye reap” in many ways applies to the U.S.’s relationship with Iran. It is time for the U.S. to be more honest regarding the two nation’s relationship – including the nuclear treaty. Many hawkish U.S. politicians are outspoken in their contempt and skepticism of Iran’s goals and motivation but perhaps they should consider relations between the U.S. and Iran from a more historical perspective. No one likes to be critical of their own country and tries to attribute it with only idealistic motivations but the U.S. has provided Iran with ample justification not only for suspicion but hostile towards us.

The U.S. CIA in 1953 orchestrated a coup d’état against the popular, democratically elected prime minister of Iran, Mohammad Mosaddegh, who wanted to nationalize Iran’s oil production so that more of the profit remained in the country. Then, beginning in 1980, the U.S. backed Iraq in their war with Iran, a war costing many hundreds of thousands of Iranian lives. For the last 36 years, the U.S. government has attempted to overthrow the Islamic Republic. Hundreds of millions of dollars are spent every year in what the U.S. government calls democracy promotion which is just another term for regime change.

Many Americans have a very erroneous image of Iran considering it rather backward and primitive. Most do not realize that Iranians (as well as the people of Turkey) are not Arab. It has a population of over 80 million, over half of whom are under 35 years of age. About 13 million live in Tehran, its conurbations, and “commuter” towns and is a large modern city similar to most comparable locations in the U.S. While the vast majority are Muslim, it also has Baha’i, Jewish, Christian, and other minorities.

It is the world’s 18th largest economy by purchasing power parity and 29th by nominal gross domestic product. The country is a member of Next Eleven[2] because of its high development potential. A unique feature of Iran’s economy is the presence of large religious foundations called bonyad whose combined budgets represent more than 30 percent of central government spending.

Iran has a mixed transition economy with a large public sector; some 60 percent of the economy still remains centrally planned and dominated by oil and gas production. There are over 40 industries directly involved in the Tehran Stock Exchange, one of the best performing exchanges in the world over the past decade. With 10 percent of the world’s proven oil reserves and 15 percent of its gas reserves, Iran is considered an “energy superpower”.

Price controls and subsidies, particularly on food and energy, are a burden on the economy. Contraband, administrative controls, widespread corruption, and other restrictive factors undermine private sector-led growth. Its legislature in late 2009 passed a subsidy reform plan which is the most extensive economic reform since the government implemented gasoline rationing in 2007.

Most of the country’s exports are oil and gas, which in 2010 accounted for a majority of government revenue enabling Iran to amass well over $100 billion in foreign exchange reserves. Iran ranked first in scientific growth in the world in 2011 and is experiencing rapid growth in global telecommunications.

Due to its relative isolation from global financial markets, Iran was initially able to avoid recession in the aftermath of the 2008 global financial crisis. However, following new sanctions related to Iran’s nuclear program, the Iranian rial fell to a record low of 23,900 to the U.S. dollar in September 2012.

Exports support self-sufficiency and domestic investment though double-digit unemployment and inflation still remain problematic. Iran’s educated population, high human development, constrained economy, and insufficient foreign and domestic investment has prompted an increasing number of Iranians to seek overseas employment resulting in a significant “brain drain”.

The JCPOA was a significantly worse agreement for Iran than it anticipated[3]. The Islamic Republic became serious about negotiating and signed an interim agreement in 2013 when oil was hovering around $100 a barrel. Iran’s major rival, Saudi Arabia, was thriving with an economy that had grown about 6 percent in 2012. Spending lavishly at home and abroad, the Saudi 2013 budget increased by 19 percent.

Iran, meanwhile, was isolated with a shrinking economy. The real motivation for Tehran’s acceptance of the JCPOA was not the return of its funds frozen in banks in Asia and Europe due to international sanctions (about $100 billion), it was finally getting back into the markets as the second largest oil producer in the Middle East and reaping the riches of the boom. In 2010, Iranian officials were predicting that by 2015, Iran’s oil and gas revenue could reach $250 billion annually. These were significant justifications for agreement to JCPOA concessions.

Iran’s oil has begun flowing into the marketplace but with prices of less than $30 a barrel. Bloomberg News calculated that the country is making only about $2.35 billion a month on its oil sales – not quite the prize the Islamic Republic was expecting for giving up its nuclear program.

Still, Iran will probably be able to handle the oil bust better than many other petro-states. Its economy has diversified to some degree and, because of sanctions, there is great resilience in both the economy and society as Moody’s and other financial firms have pointed out. This is not the case for several other large countries negatively impacted by falling oil prices.

Iran has actively attempted to destabilize Mediterranean Gulf States by providing assistance to militants in these countries and attempting to replace existing governments in that area with Iran-like regimes. Many members of the international community have accused it of funding, providing equipment, weapons, training, and giving sanctuary to terrorists. A consideration, however, is that according to the Global Terrorism Database, the majority of deaths (94 percent) attributed to Islamic terrorism since 2001 were perpetrated by Sunni extremists supported by Saudi Arabia rather than Shias backed by Iran.

Still, there are numerous terrorist incidents targeted against the U.S. or U.S. interests directly attributable to Iran or extremist groups backed and financed by them including the 1998 U.S. embassy bombings in Kenya and Tanzania, the 2000 bombing of the USS Cole, the 2003 Riyadh compound bombing, and attempted assassination of the Saudi ambassador to the U.S. and bombings of the Israeli and Saudi embassies in Washington, D.C. in 2011.

While many Iranians, especially those younger, have a positive view of the U.S. and favor engagement, they also do not understand U.S. accusations of Iranian terrorism when it has been the U.S. that has been involved in wars and violence all over the world.

There is an idiom “Better the devil you know than the devil you don’t know” and this seems applicable to U.S. relations with Iran. The U.S. has supported Saudi Arabia over Iran though the Saudis have been a major exporter of religious extremism through their extensive financial backing of extremist Wahhabi and Salafist sects responsible for numerous attacks directed against the U.S. and western nations. Now, given the election of more moderate and centrist candidates to both the Iranian Parliament and the Assembly of Experts, might be a good time for improved U.S./Iran relations allaying antagonism and suspicion of the U.S. among Iranian hardliners.

The aim of sanctions was to isolate Iran. The Iranian government has met the terms of the JCPOA and it is time to lift these sanctions permitting Iran to have normal open relations with the outside world. While not the fully democratic government the U.S. might prefer, Iran’s government is actually elected by the Iranian people. Entente would lend support to moderates possibly resulting in de-escalation of state-sponsored terrorist activities. While the outcome is by no means certain, if the U.S. does not politically engage with Iran, Iran will be forced to align with Russia and China and this opportunity will be lost.

That’s what I think, what about you?

[1] Hassan Rouhani is a lawyer, academic, former diplomat, Islamic cleric, and the 7th  Iranian President. He has been a member of Iran’s Assembly of Experts, member of the Expediency Council, and a member of the Supreme National Security Council.

[2] The Next Eleven (or N-11) are eleven countries – Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, and Vietnam – anticipated to become some of the world’s largest economies in the 21st century.

[3] Zakaria, Fareed. Free-Falling Countries, Washington Post, http://fareedzakaria.com/2016/02/04/free-falling-countries/, 4 February 2016.

Posted in Ambassador, Assembly of Experts, Baha’i, Bloomberg News, Bonyad, China, Christian, CIA, Energy, Envoy, Global Terrorism Database, Iran, Iran, Iraq, Iraq, Islam, Israel, JCPOA, Jewish, Joint Comprehensive Plan of Action, Kenya, Middle-East, Mirza Abolhasan Shirazi, Mohammad Mosaddegh, Nassereddin Shah Qajar, Nuclear Agreement, Parliament, Persia, Petroleum, Prime Minister, Recession, Rial, Rouhani, Russia, Samuel G. W. Benjamin, Sanctions, Saudi Arabia, Saudi Arabia, Shah, Shi’ite, Sunni, Tanzania, Tehran, Tehran Stock Exchange, Turkey, USS Cole, Wahhabi, Wahhabi Salafism | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

IoT Implementation

It seems to me….

As the Internet of Things advances, the very notion of a clear dividing line between reality and virtual reality becomes blurred, sometimes in creative ways.” ~ Geoff Mulgan[1].

Today, in 2017, 49 percent of the world’s population is connected online and an estimated 8.4 billion connected “things” are in use worldwide. There are now more things connected to the Internet than there are people on Earth and the number of IP-enabled (Internet Protocol) devices is predicted to reach 212 billion installed devices by 2020. This expanding collection of connected things goes mostly unnoticed by the public – sensors, actuators, and other items completing tasks behind the scenes in day-to-day operations of businesses and government, most of them abetted by machine-to-machine artificial-intelligence-enhanced communications.

Advances in artificial intelligence (AI) will enable increasing amounts of data to be used for all types of purposes, many currently unimaginable. Despite wide concern about cyberattacks, outages, and privacy violations, most experts believe the Internet of Things (IoT) will continue to expand over the next few years, linking machines to machines and people to valuable resources, services, and opportunities[2]. Everything that can be connected to the Web will be. While cyber threats might reduce some personal applications, economic interests will mandate corporate exploitation of its associated benefits regardless of possible threats.

Security concerns about the developing IoT technology are becoming extremely imperative as its availability could become the primary security threat to information processing. The IoT consists of common IP-enabled devices that can communicate over the Internet and transmit what could be very important and confidential data. These devices will form networks, communicate with other devices, and share data.

The primary concern is privacy regulation of the data collected by devices and how it is used and shared which requires the cooperation of enterprises, governments, and standards organizations before the full potential of IoT can be exploited. The enormous number of devices; coupled with the sheer volume, velocity, and structure of IoT data; creates challenges particularly in the areas of security, data, storage management, servers, and the datacenter network.

There are two classes of data in the industrial Internet: internal and external. Internal data covers what the vendor needs to deliver the product or service to the customer. External data is what’s useful to customers and the broader market. With internal data, data from a supposedly personal control system belongs to the seller even if it is generated at the customer’s site. It’s not something that would typically be revealed to a customer. The seller wants to keep that internal product data from being surveilled, even by the customer. If it is external data that’s being produced by a robot or smart transformer, then customers are free to use that data however they please and since it’s their data, they are free to share it with whomever they like.

End users normally do not accept they do not actually have ownership rights to data gathered by off-the-shelf systems they have installed. For example, that all the details about when a smart home set-up they installed switched on their lights or opened their garage might belong to the provider and not the owner. With the IoT still relatively early in its adoption curve, companies are attempting to reach mutually acceptable agreements for handling customer data. There is considerable potential for IoT systems to reveal personal information about individuals and businesses resulting from systems IoT deployments being set up incorrectly.

Consumers currently have no reasonable way to judge whether the devices they buy are designed and concur with common security practices, whether and how they are being tested, or how security-related bugs are addressed and for how long after purchase. Nor do they generally know what kind of data the vendor stores where, shares with whom and for how long, and whether those systems are regularly tested by independent third parties. For higher-risk devices that can either do physical harm (cars), can cause significant loss of privacy (in-home cameras), or endanger physical safety (door locks), some kind of certification that does not just consist of ten pages of disclaimers is absolutely necessary. There will be poorly designed products and applications that might initially achieve marketing success but will quickly be rejected by consumers when deficiencies become better known.

Data that customers elect to share with their providers should only be shared in an aggregated or anonymized form. Providers should guarantee not to use data fusion to reverse engineer information about their customers without their explicit consent. For example, if the customer has several systems all made by a single supplier, the supplier could offer to merge those systems to give better insight into how the combination of those systems is working. Most people are willing to exchange the currency of personal data and privacy to get the most value from the products possible. If customers are willing to share personal data, they may be offered additional services such as data on industrial equipment usage that could optimize or service the equipment. The value of that exchange where both parties are getting something has to be clear however.

Anything that is connected is susceptible to attack or misuse; the very connectedness of the IoT leaves it open to security and safety vulnerabilities. All of this has prompted concern among Internet security experts. As billions of additional everyday objects are connected in the IoT, they are sending and receiving data that enhances local, national, and global systems as well as individuals’ lives but such connectedness also creates exploitable vulnerabilities.

The primary application for IoT is in the commercial environment, not in consumer products though consumer products will increasingly be dependent upon connectivity. Those corporate-specific applications will remain vulnerable to security attacks longer than those available to consumers. It will be necessary for commercially available products to adhere to standards. Rather than individually developing applications, corporations will utilize open-source modules from locations such as GitHub[3].

Risk, however, is part of life and the benefits of being connected outweigh the risks. The IoT will be accepted, despite risks as most people believe the worst-case scenario will never happen to them. Defects and vulnerabilities are a natural part of quickly evolving networks and software, hardware, and security responses are always a step behind. Not only will the trend toward greater connectivity of people and objects continue, it will continue to change boundaries and dynamics whether personal, social, moral, political.… Given time, human ingenuity and risk-mitigation strategies will make the IoT more safe. Though the dangers are real, security and civil liberties issues are magnified by its current rapid adoption.

If anything forces people off new technology, it will be the security measures, not the potential criminality. All devices will become connected by default and require specific effort to disconnect. Even in the case of a major attack, it will not alter the rate of long term connectivity increase. Any impact will only be temporary as online security is basically only an illusion.

There are overwhelming economic incentives for commercial enterprises to develop connectedness: efficiency, information…. Those failing to fully exploit the IoT will be at a significant competitive disadvantage.

Society reaps benefits from connected infrastructure and objects from transportation, communications, business, and industrial systems to individual products and services. People will remain largely unaware of the degree of connectedness present in the products they select and will merely pick products and services based on personal preferences for comfort, convenience, monetary value, etc. They will value today’s convenience over possible future negative outcomes. From primitive Man to the present, we have almost always favored and pursued increased connectivity. This time will most likely not be any different.

That’s what I think, what about you?

[1] Geoff Mulligan is an American computer scientist who developed embedded Internet technology. He is a consultant on the Internet of Things and in 2013 was appointed a Presidential Innovation Fellow.

[2] Rainie, Lee, Janna Anderson. The Internet of Things Connectivity Binge: What Are the Implications?, Pew Research Center, http://www.pewinternet.org/2017/06/06/the-internet-of-things-connectivity-binge-what-are-the-implications/?utm_source=Pew+Research+Center&utm_campaign=ea9bab96ec-EMAIL_CAMPAIGN_INTERNET_JUNE2017&utm_medium=email&utm_term=0_3e953b9b70-ea9bab96ec-400092341, 6 June 2017.

[3] GitHub is a Web-based version control repository hosting service for tracking changes in computer files and coordinating work on those files among multiple people.

Posted in AI, AI, Artificial Intelligence, Artificial Intelligence, Communications, data, Data, Information, Intelligence, Internet, Internet of Things, Internet of Things, IoT, IoT, IP, Privacy, Protocol, Risks, Security, Server, Server, Storage, Threats | Tagged , , , , , , , , , , , , , , , | Leave a comment

Living With Immigration

It seems to me….

Ours is an open and accepting society and has historically provided an avenue for lawful immigration to all those willing to accept the responsibilities of citizenship.” ~ Spencer Bachus[1].

The entire world is in an age of mass migration. As the percentage of immigrants approaches approximately 22 percent, the percentage of right-wing populist voters has risen to 50 percent. Hostility to immigration has become a core theme of every populist political party.

In the past three or four decades, western societies have seen large influxes of people from different lands and cultures. In 1970, foreign-born residents composed less than 5 percent of the U.S. population; today they are about 14 percent. The rise is even sharper in most European countries, home to 76 million international migrants who most recently have come from Africa and the Middle East. Austria, for example, took in almost 100,000 immigrants adding 1 percent to its population in 2015 alone.

This migration became a refugee crisis in 2016[2] as, worldwide, nearly 1 in 100 people were displaced from their homes, the highest level since following World War II. 34,000 people are forcibly displaced everyday due to conflict and persecution with 54 percent of refugees worldwide coming from only three countries: Afghanistan, Somalia, and Syria. About 6 in 10 Syrians, an estimated 2.5 million people, are currently displaced. Children make up more than half of all refuges resulting in half of all primary-age refugee children not being in school. In just the past two years, 1.3 million people fleeing conflict and persecution have traveled through Greece in search of safety in Europe with some 62,000 of those refugees currently remaining stranded in that country.

It also must be considered that while a refugee almost always can be an immigrant, an immigrant is not necessarily a refugee. It is difficult to understand how anyone cannot be sympathetic and accepting to someone fearing for their and their family’s safety; fleeing their homes to escape persecution or death, leaving behind all they possess and everyone they knew. The insensitivity and lack of empathy of those wanting to shut the door to those in such need is beyond understanding.

Change can be unsettling. For most of human history, people have lived, worked, and died within a few miles of the place where they were born but, in recent decades, hundreds of millions of people from poorer countries have moved to wealthier ones. This reflects an economic reality. Rich countries have declining birthrates and need labor; poor countries have millions who seek better lives. But this produces anxiety, unease, and a cultural backlash apparent across the entire Western world.

Migration tends to be beneficial for both origin and destination societies and refugees should not be seen as a burden but as a potential resource[3]. It is the immigrant that as a percentage is the greater engine of change providing a high dynamic of innovation.  Possessing a different perspective, immigrants frequently are able to pursue a different direction than the native-born. Diversity always results in advances.

Most migration policies are, in fact, quite effective and immigration policies have become more liberal for most migrant groups over past decades. Immigration is not a flow that can be turned on and off like a tap. Modern immigration policies aim to influence the selection and timing of migration rather than volumes of migration. It is, however, often overestimated what migration policies can achieve as migration is driven by processes of economic development and social change – in both the origin and destination societies – that lie beyond the reach of those policies.

Economic migration is strongly driven by labor demand defying popular beliefs that it is an uncontrolled phenomenon largely driven by poverty and violence in origin countries. The idea that climate change will lead to mass migration to the West is equally unrealistic. Economic growth and improved education typically increases people’s capacities and aspirations to migrate. With many developing countries facing increasing levels of unemployment among university graduates, it is therefore no coincidence that prominent emigrant countries such as Mexico, Morocco, and Turkey are middle-income countries.

There is an urgent need to see migration as an intrinsic part of economic growth and societal change rather than primarily as a problem. Studies have shown it is predominantly businesses, the wealthy, and the upper-middle classes who benefit from migration – apart from the migrants themselves. Most migrants do jobs that local populations shun or for which they lack the skills. Contrary to generally unsupported ideological beliefs, several studies indicate that while migration’s effect on economic growth is rather small, it tends to be positive.

The magnitude of migration is far too low to offset the effects of population aging. The actual problem might therefore not be so much how to prevent migrants from coming but how to attract them.

Countries such as Turkey, Pakistan, Lebanon, Iran, Ethiopia, and Jordan currently host the largest refugee populations. Western societies, by contrast, receive a comparatively low number of refugees – and that percentage has declined in recent years.

One of the paradoxes of liberalization is that the political desire for less migration is fundamentally incompatible with the trend towards economic liberalization and the desire to maximize economic growth. The erosion of labor rights, the rise of flexible work, and the privatization of formerly state-owned companies in recent decades have significantly increased the demand for migrant labor in Europe. The heated migration debates in Britain and the U.S. – both strongly liberalized market economies facing persistently high levels of immigration – are powerful illustrations of this liberalization paradox.

Immigrants are important for a very important reason: jobs. Immigrants create companies at a much higher rate than native Americans; e.g., most Silicon Valley companies had at least one immigrant as their founder. The majority of refugees (and I’m intentionally differentiating between refugees and immigrants) are women and children fleeing to escape death and persecution – anyone with compassion and empathy would want to open our doors to these people. For Christians, it is not an option – it is something they should consider to be a moral imperative.

The U.S. has more immigrants than any other country in the world[4]. Today, more than 40 million people living in the U.S., about 13.4 percent of the U.S. population, were born in another country accounting for about one-fifth of the world’s migrants in 2015. Today’s immigrant share however remains below the record 14.8 percent in 1890 when 9.2 million immigrants lived in the U.S.

Roughly half (46 percent) of the nation’s 43.2 million immigrants live in just three states: California (25 percent), Texas (11 percent), and New York (10 percent). California had the largest immigrant population of any state in 2015, at 10.7 million. Texas and New York had about 4.5 million immigrants each.

Most immigrants (76 percent) are legally in the country. In 2015, 44 percent were naturalized U.S. citizens, 27 percent of immigrants were permanent residents, and 5 percent were temporary residents. Another 24 percent of all immigrants were undocumented immigrants. Mexican unauthorized immigrants are more likely to be long-term residents of the U.S. As of 2014, 78 percent had lived in the U.S. for 10 years or more while only 7 percent had been in the country for less than five years.

The number of apprehensions at the U.S.-Mexico border has sharply decreased over the past decade from more than 1 million in fiscal 2006 to 408,870 in fiscal 2016. Specific concerns over Mexican undocumented immigrants is equally unfounded as the number leaving in recent years has exceeded the number arriving. In fiscal year 2016, more non-Mexicans than Mexicans were apprehended at U.S. borders with apprehensions of Central Americans at the border exceeding that of Mexicans for only the second time on record.

Dispelling any ideological biases, undocumented immigrants are younger and consequently have lower medical expenses than native Americans. The majority are single males so educational expenses are less. Many pay into Social Security but are not eligible to receive any payments. They have a much lower crime rate than native Americans as they know they will be deported if even questioned by the police. There have been several studies showing they are a significant financial benefit to our economy. The need for border security to prevent smuggling and other criminal activity is unquestioned but Trump’s wall is totally pointless. Money for his wall would be much better spent on higher priority items such as infrastructure or environment.

A majority of Americans have positive views about immigrants. Six-in-ten Americans (63 percent) say immigrants strengthen the country “because of their hard work and talents”, while just over a quarter (27 percent) say immigrants burden the country by taking jobs, housing, and health care. Nearly two-thirds of Americans (64 percent) say an increasing number of people from different races, ethnic groups, and nationalities in the U.S. make the country a better place in which to live; fewer (29 percent) think growing diversity in the country does not make much difference, and just 5 percent think it makes it worse[5].

In October 2016, 54 percent of registered voters said the U.S. does not have a responsibility to accept refugees from Syria while 41 percent believe it does. Nearly three-quarters of Republicans (74 percent) view the refugee exodus leaving countries such as Iraq and Syria as a major threat to the well-being of the U.S compared to just 40 percent of Democrats with similar views. Among Democratic voters in the 2016 Presidential election, just 40 percent of Clinton supporters and 34 percent of Sanders supporters viewed refugee migration as a major threat.

The Trump administration has a politically motivated anti-immigration agenda. In addition to ending the Deferred Action for Childhood Arrivals (DACA) program for undocumented young people who came to the U.S. as children, it also is terminating the Temporary Protected Status program for many temporary immigrates who have legally lived in the U.S. for extended periods, many of whom have deep roots in this country, have children who are citizens, are well integrated into society, and are essential workers in critical industries. The administration’s apparent misguided intent is to slash legal immigration, drive out all current immigrants, keep out refugees, and ban Muslims.

Eventually, Western societies will be able to adjust to this new feature of globalization. The majority of young people in both Europe and the U.S. deeply value the benefits of diversity and seek to live in an open and connected world. Unfortunately, this perspective is not shared by many older entrenched conservatives. Hopefully, the many advantages from a positive immigration policy will be recognized and the nation’s doors opened in welcome.

That’s what I think, what about you?

[1] Spencer Thomas Bachus III is a former U.S. Representative for the state of Alabama who served as a ranking member and chairman of the House Financial Services Committee.

[2] Karakoulaki, Marianna. A Refugee for Hope, On Wisconsin, Volume 118, Number 2, p27.

[3] de Haas, Hein. Myths of Migration: Much of What We Think We Know Is Wrong, Der Spiegel, http://www.spiegel.de/international/world/eight-myths-about-migration-and-refugees-explained-a-1138053.html, 21 March 2017.

[4] López, Gustavo, and Kristen Bialik. Key Findings About U.S. Immigrants, Pew Research Center, http://www.pewresearch.org/fact-tank/2017/05/03/key-findings-about-u-s-immigrants/?utm_source=Pew+Research+Center&utm_campaign=be5de05165-EMAIL_CAMPAIGN_2017_05_04&utm_medium=email&utm_term=0_3e953b9b70-be5de05165-400092341, 3 May 2017.

[5]In First Month, Views of Trump Are Already Strongly Felt, Deeply Polarized, Pew Research, http://www.people-press.org/2017/02/16/in-first-month-views-of-trump-are-already-strongly-felt-deeply-polarized/, 16 February, 2017.

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Trump Just Doesn’t Get It

It seems to me….

We must speak our minds openly, debate our disagreements honestly, but always pursue solidarity.” ~ Donald Trump[1].

I have avoided directly commenting on Trump’s performance as U.S. President for quite some time. While believing his actions are totally inappropriate and unbecoming for someone occupying that office, my remarks were becoming an all-too-frequent harangue rather than contributing to any critical review of his performance. Several of his remaining supporters also argued that he should be provided more time (something conservatives NEVER provided President Obama vowing from the day following his election to oppose everything he proposed).

It is now over a year since his election but he still has not said or proposed one thing with which I can agree. It is doubtful that the U.S. has ever had such a totally unqualified – in both temperament and experience – President. He narcissistically attempts to humiliate anyone who disagrees or criticizes him through verbal harassment. He is a master of the malodorous tweet using that media as a put-down of his opponents, whether actual or only perceived, attaching scurrilous adjectives to characters in his personal psychodrama: Lying Ted, Crooked Hillary, Crazy Bernie, Little Marco…. His behavior, constantly spewing vitriolic comments, is totally unprofessional.

The U.S. has always been disciplined and cautious; previous Presidents reacted with sobriety to the bellicose statements of other world leaders but Trump seems determined to have the last insult. He likes to be seen as the tough guy.

Perhaps the most important personal characteristics of anyone elected to such a high office are honesty and integrity. Trump possesses neither. We expect honesty, not only from family and friends, but also in all aspects of life: especially from our President. This is not a new concept – in the 1st century BCE the Roman poet Virgil wrote “Evil is nourished and grows by concealment” regarding the values for which he wanted Rome to stand. Most parents strive to instill honesty in their children but somehow Donald Trump’s were obviously unsuccessful. He has repeatedly demonstrated himself to be a pathological liar apparently incapable of distinguishing between fact and what he would prefer to be the truth. Whether compulsive or impulsive, he lies on a regular basis seemingly unable to control what he says despite being aware of the inevitable negative consequences or ultimate disclosure of those lies.

The fact of Russian meddling in our 2016 Presidential election is strongly denied by Trump who refuses to accept such assertions from all U.S. intelligence agencies. He openly admires Putin and accepts his avowals of non-involvement. Regardless of whether Trump colluded with Russia – and his continual attempts to interfere with ongoing investigations only provides credulousness to such charges, he exemplifies a Manchurian candidate. Due to his intransigence, very little is apparently being done to prevent such interference in future U.S. elections.

Allegations of sexual misconduct against powerful men in recent weeks have drawn wide public support and prompted quick response; Trump’s numerous female accusers who came forward with claims of harassment during the presidential race should not be forgotten. Their claims were both substantiated and credible – especially given his multiple live radio conversations with Howard Stern and very public bragging on video about his ability to get away with sexual assault. Trump deserves to be held as accountable as anyone else similarly accused.

Trump claims that he judges people “based on their capability, honesty, and merit” and so should he be judged. Attendees at Trump rallies witlessly accept that “He tells it like it is” which is the farthest from the truth from what he does but the repetitive simplicity of his short assertions and their insistent certainty are effective, especially with more educationally limited audiences.

It is almost impossible to change the minds of followers of authoritarian figures. Research shows they frequently are highly ethnocentric and highly inclined to see the world as their in-group versus everyone else, highly fearful of a dangerous world, highly self-righteous, aggressive, highly prejudiced against racial and ethnic majorities – non-heterosexuals and women in general. They reason poorly, are highly dogmatic, and very dependent on social reinforcement of their beliefs. As they severely limit their exposure to different people and ideas, they also vastly overestimate the extent to which other people agree with them.

The U.S. was extremely fortunate to have a President like Obama who was considerate, compassionate, rigorously intelligent, and reveled in the achievements of others. Now we have a President who stands in stark contrast to everything Obama worked for and achieved during his eight years in office. Where Obama brought optimism and hope, Trump paints a dark and despondent view of our world. I much prefer to live where light and happiness reign.

After the most severe financial crisis since the Depression, a broad-based economic upswing begun under President Obama is underway. In the U.S., Europe, Asia, and the emerging markets, all economies are once again showing progress – but the political mood is sour. A populist rebellion, nurtured by years of sluggish growth, is still spreading: globalization is out of favor and an economic nationalist sits in the White House.

This dissonance is dangerous. If populist politicians win credit for a more buoyant economy, their policies will gain credence but only with potentially devastating effects. An upswing might lift spirits and spread confidence but at what cost?

The upswing has nothing to do with Trump’s “America First” economic nationalism[2]. If anything, the global upswing vindicates the Keynesian economics that today’s populists often decry. Economists have long argued that recoveries from financial crashes take considerable time: research into 100 banking crises by Carmen Reinhart and Kenneth Rogoff of Harvard University suggests that, on average, incomes recover to pre-crisis levels only after about eight years. Most economists also argue that the best way to recover after a debt crisis is to clean up balance-sheets quickly, keep monetary policy loose, and apply fiscal stimulus wherever prudently possible.

An endorsement for populist economics would favor the wrong policies. Trump’s proposed tax cuts would pump up the economy that now least needs support and complicate the Federal Reserve’s task. Fortified by misplaced belief in their own world view, the administration’s protectionists might urge Trump to rip up the infrastructure of globalization (e.g., bypassing the World Trade Organization in pursuing grievances against China) risking a trade war. A fiscal splurge at home and a stronger dollar would widen the U.S.’s trade deficit which may strengthen their hand. Populists deserve no credit for the upsurge but they could yet snuff it out.

The U.S.’s loss of faith in politics did not start with Trump. For decades, voters have complained about the gridlock in Washington and the growing influence of lobbyists. Trump has only fueled that mistrust. He has correctly identified areas where the U.S. needs reform but failed in his response – partly because of his own incontinent ego.

Donald Trump is not only a symptom of the U.S.’s political division but also a cause of it[3]. He was elected partly because he spoke for voters who felt that the system was working against them. He promised that by dredging Washington of the elites and lobbyists insufficiently intelligent or self-serving to act for the whole nation, he would fix U.S. politics. These, for the most part, are the very people he has chosen to fill prominent positions.

The Trump presidency has been plagued by poor judgment and missed opportunities and the strain is beginning to show in every aspect of government. Trump is hardly our first bad president. Given the erosion in his approval ratings, he hopefully will be around for only four years – if that.

His attempt to reform this “administrative state” is wrecking the machinery the government needs to function. Trump’s hostility has already undermined the courts, the intelligence services, the state department, and the U.S.’s environmental watchdog. He wants deep budget cuts and has failed to fill many critical Presidential appointments.

Suspicion and mistrust corrode all they touch. The rising monopoly power of companies has gone unchallenged. Schools and training fall short even as automation and artificial intelligence are about to transform the nature of work.

Dangers are already clear in foreign policy. By pandering to the belief that Washington elites sell the U.S. short, Trump is doing enduring harm to U.S. leadership. The Trans-Pacific Partnership would have entrenched the U.S.’s concept of free markets in Asia and shored up its military alliances. His rejection of the Paris climate accord showed that he sees the world not as a forum where countries work together to solve problems but as an arena where they compete for advantage.

His erratic decision-making and his intimacy with autocrats lead his allies to wonder if they can depend on him in a crisis. One of the most dismaying findings is that the decreasing international regard for the U.S. goes well beyond Trump. Sixty-four percent of the people surveyed expressed a favorable view of the U.S. at the end of the Obama presidency. That has now fallen to 49 percent. Even when U.S. foreign policy was unpopular, people around the world still believed in the U.S. – the place, the idea. This is less true today.

When we need empathy for those unfortunate and struggling, he has turned his back on them. When we need concern for those without, he has created greater burdens for them to bear. When the Earth is stressed from pollution and misuse, he has denied the problem and is allowing it to worsen. He wants to impose a ban on starving Syrian children to protect U.S. citizens but apparently approves of paranoid schizophrenics buying semiautomatic weapons.

Trump frequently is critical of what he calls “fake news” – when the news media honestly and truthfully reports fallacious administrative claims. Our nation has a serious problem but it is not with fake news; it is with a fake President.

There may be no previous instance in modern American history when deal breaking has been so central to an administration’s posture in the world. His approval both in this country as well as around the world continues to plummet. He is a total embarrassment to the office and our nation – the only question now is how much more are his Republican colleagues willing to tolerate.

There have been other Presidents I did not care for but Trump is the first I consider extremely frightening; as a populist President, there are too many parallels to the rise of Fascism. I haven’t any doubt that the U.S. will survive but we will pay a high price. My hope is Congress will see fit to foreshorten his elected four-year term in office. It once again is time for all of us to speak up for the restoration of national sanity.

That’s what I think, what about you?

[1] Donald John Trump is the 45th U.S. President. Before entering politics, he was a businessman and television personality.

[2] The Global Economy Enjoys A Synchronised Upswing, The Economist, http://www.economist.com/news/leaders/21718868-past-decade-has-been-marked-series-false-economic-dawns-time-really-does-feel, 18 March 2017.

[3] Donald Trump’s Washington Is Paralysed, The Economist, http://www.economist.com/news/leaders/21724392-and-man-oval-office-making-bad-situation-worse-donald-trumps-washington, 1 July 2017.

Posted in AI, AI, Artificial Intelligence, Asia, Automation, Barack Hussein Obama II, Bernie Sanders, Budget, Carmen Reinhart, China, China, Climate, Clinton, Deficit, Deficit, Donald Trump, Economy, Elections, Employment, Environment, Federal Reserve, Global Warming, Globalization, Globalization, Harassment, Harvard, Hillary Clinton, Homosexual, Honesty, Howard Stern, Immigrant, Immigration, Inequality, Intelligence Agencies, John Maynard Keynes, Kenneth Rogoff, Keynes, Less-Educated, Lies, Lies, Manchurian candidate, Marco Rubio, Mental Health, Minorities, Muslim, News, Obama, Paranoia, Populism, President Vladimir Putin, Putin, Recession, Refugee, Russia, Russia, Schizophrenia, Sex, Sexual Assault, Sexual Misconduct, Taxes, Technology, Ted Cruz, trade, Trans-Pacific Partnership, Trump, Virgil, Voters, World Trade Organization, World Trade Organization, World Trade Organization, WTO | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Tax Reform

It seems to me….

Tax reform is taking the taxes off things that have been taxed in the past and putting taxes on things that haven’t been taxed before.” ~ Art Buchwald[1].

There currently is considerable discussion regarding tax reform – a Trump campaign promise. Under consideration are many conflicting perspectives regarding taxes in general and many of them if approved rather than being beneficial, would adversely affect both current assessment allocations and the national deficit. There is considerable latitude for improvement but reform is being proposed by elected representatives with little knowledge of economics – many apparently unfamiliar with even basic ECON-101 – who are formulating recommendations primarily on ideology rather than advise from economists.

Taxes actually are the way individuals are able to purchase necessities; e.g., security (military, police, fire…), infrastructure (roads, bridges…), utilities (power, water, sewer…), education (schools, colleges…), healthcare (hospitals, research…), etc.; collectively which we otherwise would be unable to afford individually. There is little disagreement as to the need for these expenditures but considerably less on the amount and burden allocation. Additionally, there is very little understanding of who actually pays the majority of those taxes.

When most people discuss taxes, they tend to talk about them ideologically[2]. The right claims taxes are too high for everyone; the left worries that the rich do not pay their fair share. But facts do not support either position. Contrary to prevalent rightwing claims, the U.S. has one of the lowest tax burdens in the industrialized world (but there is little probability of that changing except in the wrong direction). The U.S. federal government derives most of its revenue from the income tax and 70 percent of those taxes are paid by the top 10 percent of Americans.

There are two somewhat conflicting principles regarding the fairness of taxes: the Benefits Principle and Ability-To-Pay Principle. The Benefits Principle is that those benefiting should bear the burden of a tax paying for that benefit – a “consumption” tax. The Ability-To-Pay Principle requires those with higher incomes to pay a larger percentage – a “progressive” tax. Many countries impose a tax on consumption rather than income called a Value-Added Tax (VAT) – a sales tax, often as high as 25 percent – that hits everyone equally. A consumption tax has high administrative costs and is difficult to make progressive.

Any tax, especially a consumption tax (sales tax, excise tax, highway tolls…), decreases unit demand (unless that demand is totally inelastic) as resulting costs must increase if the payer is to receive the same unit compensation as without a tax. Any increase in unit cost, depending upon price elasticity, is most likely to result in decreased unit demand. Taxes therefore always result in deadweight losses due to market inefficiency as some mutually beneficial transactions never occur.

The U.S. has the most progressive income, payroll, wealth, and property taxes of any developed country. There always are incentive concerns associated with taxes that are highly progressive and always trade-offs in a tax system between equity and efficiency.

The simplest comprehensive way to judge a country’s tax burden is to look at its tax revenue from all levels of government as a percentage of gross domestic product. With a tax burden of 25 percent, the U.S. has the fourth-lowest burden in the industrialized world, ranking 31st out of 34 countries in the Organization for Economic Cooperation and Development (OECD), and well below the overall average of 34 percent[3]. It ranked 17th out of 29 industrialized countries when it came to tax revenue per capita according to the OECD and its marginal effective tax rate was second to France among industrialized nations according to an analysis by the Tax Foundation[4].

The U.S.’s percentage is actually lower today than it was in 2000 while the OECD average is about the same ranking below all measured countries except Korea, Chile, and Mexico.

Trump and other Republicans are right about one aspect of U.S. taxes, however. When it comes to taxing corporate profits, at 35 percent the U.S. does indeed have one of the highest nominal maximum corporate tax rates among industrialized nations.

One thing that the U.S. does have is the world’s longest tax code. Even though the U.S. is generally more competitive than other rich countries, its taxation is much more complicated and inefficient. All the small additions and exemptions to the tax code that have accumulated over the years are adverse economically. They divert business activity into areas that might not make economic sense but provide tax benefits. They are expensive and reward people and businesses for activities they might have done anyway. And most damaging of all, they are hidden and often eternal, not requiring reauthorization. By providing a complicated tax credit, it ensures that no one realizes how much cash is being given to a company or industry. If Congress wants to fund something, it should do so openly by giving grants.

Corporations exploit research and developments conducted using public funding and employ workers educated and trained in U.S. universities but contribute a decreasing share of associated costs. Contrary to what some critics claim, while possibly detrimental to U.S. interests, this is just good corporate management. While many multinational corporations were started and incorporated in the U.S., they now include many non-U.S. personnel in their management who do not share any personal allegiance to the U.S. Any criticism should be levied at Congress for failing to cut and simplify the U.S. tax code rather than at those corporations.

U.S. corporations hoard around $2 trillion in profits overseas rationalizing that the U.S. tax rate of 35 percent is excessive even though Fortune 500 companies on average pay only 19.4 percent and a third of them pay less than 10 percent. Congress has repeatedly awarded corporations numerous loopholes over the years so that our tax code now resembles a block of Swiss cheese. Consequently, U.S. corporations are making record profits yet contributing a lower share of overall U.S. federal financing than in previous decades.

Conservatives continue to shout the mantra that reducing taxes on the wealthy results in economic growth even though the opposite has repeatedly been shown to be true. Bill Clinton raised taxes: the result was economic growth; Bush cut taxes: recession. Obama raised taxes: economic growth; Kansas cut taxes: budget crisis. California raised taxes: economic growth…. The results have been consistent. Even when a tax reduction did result in economic growth such as under President Reagan, that growth was only very moderate compared to what was experienced under either Clinton and Obama.

A national sales tax, favored by the wealthy, is the most regressive of all taxes as it impacts the middle and lower classes much harder than the wealthy. The U.S. economy has been hyper-inflated by credit-fueled consumerism. A national sales tax, however, could have at least one positive effect: anything that encourages a healthier rate of saving and investment, which a sales tax would indirectly accomplish, can’t be totally bad.

There never will be universal agreement on any issue as contentious as tax reform but any attempt at reform drafted without bipartisan support will only serve to further widen the political chasm currently dividing us. While tax reform, especially simplification, is necessary, it should be accomplished based on fundamental economic principles and bipartisan agreement rather than political ideology.

That’s what I think, what about you?

[1] Arthur “Art” Buchwald was an American humorist who primarily focused on political satire and commentary.

[2] Zakaria, Fareed. Trump’s Real Charitable Gift: Exposing The Corruption Of The U.S. Tax Code, The Washington Post, https://fareedzakaria.com/2016/10/06/trumps-real-charitable-gift-exposing-the-corruption-of-the-u-s-tax-code/, 6 October 2016.

[3] Jarass , Lorenz J., Anthony E. Tokman , Mark L. J. Wright. The Burden of Taxation in the United States and Germany, Federal Reserve Bank of Chicago, https://www.chicagofed.org/publications/chicago-fed-letter/2017/382#ftn7,

[4] Mintz, Jack and Duanjie Chen. U.S. Corporate Taxation: Prime for Reform, Tax Foundation, http://taxfoundation.org/article/us-corporate-taxation-prime-reform, 4 February 2015.

Posted in Ability-To-Pay Principle, Benefits Principle, Burden, Bush, California, Chile, Clinton, Consumption Tax, Deadweight Losses, Deficit, Deficit, ECON-101, Economics, economics, Economist, Education, Excise Tax, France, France, Healthcare, Highway Tolls, Income, Income Tax, Infrastructure, Kansas, Korea, Market Inefficiency, Mexico, Obama, OECD, Organization for Economic Cooperation and Development, Payroll Tax, Price Elasticity, Progressive Tax, Property Tax, Reagan, Sales Tax, Security, Tax, Tax Code, Tax Reform, Taxes, Taxes, Taxes, Transactions, Value-Added Tax, VAT, Wealth Tax | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment