Tuesday, July 09, 2019

Born on the Fourth of July: the Declaration of Independence as an indictment


Every 4th of July, my father, a World War II veteran, recites the Declaration of Independence at a gathering in the senior facility where he lives.

And every year, as a dutiful son, I have ignored his one-man show of principle. Till now.

This year, I finally heeded my old man’s call and read the Declaration in full. There was much in it I knew, from the soaring statement “that all men are created equal, that they are endowed by their Creator with certain inalienable rights, that among these are Life, Liberty and the pursuit of Happiness” to the famous prescription “that whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it.”

But I had forgotten that the rest of the document signed by John Hancock and 55 other brave souls is essentially a list of grievances against King George III, who ruled England and the thirteen colonies at the time.

As I read through the accusations laid out in the Declaration, I realized that, 243 years on, the great founding document of the United States of America could serve as an indictment of President Trump and the entire Republican Party. Consider the charges:
  • He has refused his Assent to Laws, the most wholesome and necessary for the public good.
Think of President Trump’s continuing attempts to destroy Obamacare. Think of his decision to hold the so-called Dreamers – kids who were brought to the U.S. as infants and know no other home and who have come forward voluntarily to get a path toward citizenship – hostage to his desire to build a wall on our nation’s southern border.
  • He has forbidden his Governors to pass Laws of immediate and pressing importance.
This could apply to Trump’s efforts, together with Mitch McConnell and the Republican leadership in the Senate, to stymie almost all bi-partisan efforts to legislate.
  • He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature.
This seems a clear reference to Republican efforts to gerrymander local districts and to create voter ID laws that block African-Americans and others who tend to vote Democratic from exercising their legal rights.
  • He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of foreigners; refusing to pass others to encourage their migrations hither.
Think immigration, the Muslim ban, the family separation policy, the appalling camps – whatever label you want to put on them – at the border.
  • He has made judges dependent on his will alone
Think of the President’s tweets targeting judges who issue decisions he doesn't like.
  • He has kept among us, in times of peace, standing armies without the consent of our legislatures
A clear reference to the nation’s 20,000 border patrol agents and 20,000 Immigration and Customs Enforcement (ICE) employees whose powers have become increasingly broad and whose actions have become increasingly harsh and punitive
  • For taking away our Charters, abolishing our most valuable laws, and altering fundamentally the Forms of our Governments
Think of how Trump, acting through executive orders and administrative rule changes, has been gutting the nation’s environmental laws, and cutting the powers of other federal regulatory agencies. Think also of how he pulled the country out of the Iran nuclear deal and the Paris agreement on climate change. And how the President is now trying to find a way around the court decision regarding putting a citizenship question in the census.
  • He has abdicated government here by declaring us out of his Protection, and waging War against us.
An unmistakable reference to the administration’s vow to target Sanctuary Cities – most of which are in regions that did not support the President in the last election, and also to his accusation that those who report critically about his maneuvers are enemies of the people.

On and on, through the Declaration, the parallels are clear. Here’s the bottom line:
  • A Prince, whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.
Congress doesn’t need to impeach the President -- because the Declaration of Independence already has. All the House of Representatives has to do is vote to reaffirm our oldest and most revered political document and it will have handed up the most effective indictment possible against the current president and the party that has embraced him.

Monday, April 15, 2019

my life as a functionless investor

I became a functionless investor without knowing it.

A bunch of decades ago, when I was a kid, my father, being wise to the way of the world, bought shares in two companies. One was a bank and the other an oil company. He held these shares in trust for me – meaning that they would become mine when I became an adult.

As I went through my cavity-prone years, then off to college, then into community organizing and writing, the two companies grew and split and sold themselves and changed their names. In fact, they grew far more impressively than I did.

When I turned 21, I started receiving checks every three months. These were dividends – the cash these companies paid me for the right to use this money that my father had shelled out so many years before. Over time, the payout approached $1,000 a month. Generally, without thinking, I spent it.

And every April 15th, I had to pay money I no longer had to cover the taxes on the money I did nothing to earn.

Then came the Bush tax cuts of 2003. Suddenly the dividends I had been receiving as a functionless investor got renamed. They were now called “qualified dividends.”

Qualified for what?


For the past ten years, if you, like me, are in the lower tax brackets – that is, if your taxable income is less than approximately $39,000 ($52,000 if you’re head of a household, $77,000 if you're married and filing jointly) – your qualified dividends go straight into your pocket, tax-free. If you’re a bigger earner, you pay only about half of what you would have paid if you had earned the same amount from your job. Long term capital gains – the money investors make if they sell shares they’ve owned for more than a year – get a similar tax reduction. Multi-millionaire hedge fund managers, too, exploit a parallel dodge to halve the taxes they pay.

So my functionless income is frictionless. It arrives in my bank account each quarter, free from any social responsibility.

Then I read John Maynard Keynes, the economist whose prescription for governmental investment in society led to the three and a half boom decades between the end of World War II and the election of Ronald Reagan in 1980. In his magnum opus, The General Theory of Employment Interest and Money, published in 1936, Keynes said some hard things about people like me. He called for “the euthanasia of the rentier, of the functionless investor.”

Why did Keynes want to kill off people like me? To break what he called “the cumulative oppressive power of the capitalist to exploit the scarcity value of capital.”

In today’s terminology, Keynes wanted to break up the big banks – or at least to break up their politically-enforced stranglehold on the availability of money. He wanted cash to be abundant and accessible at minimal rates of interest. This way, corporations would no longer need to pay idiots like me for the use of our cash and there would no longer be any reason for me to receive dividends for doing absolutely nothing. This, Keynes asserted, offered capitalism a lifeline – the possibility of revolution without a revolution, a chance to make society more equal without overthrowing the system.

Of course, we haven’t taken Keynes up on this challenge. Instead, over the years, the government decided to reward us functionless investors. When I write an article like this one, I have to pay full taxes on what I earn. When I invest in a bank, I don’t.

The tax deals for functionless investors don’t appear on the 1040 form that all American taxpayers file to determine how much they owe. Rather, there’s a bunch of worksheets hidden in the instructions. That’s right: the government trusts us functionless investors so much that it lets us determine our own savings without even reporting them on our tax returns.

The dance of the functionless investor is inequality at work. Most Americans don’t own any stocks at all. And those who do tend to be well-off: 90 percent of all the stock shares in the US are held by the fortunate people who can count themselves among the wealthiest 20 percent of the nation. This gift from Uncle Sam to the functionless investors of the nation is a direct subsidy to the rich.

It's hard to give up easy money. But it’s time to put the jackpot I received from my father into doing things in the world, things I believe in, things that leave a legacy that is not just tax-free cash.

It’s time to kill the functionless investor inside me.