Material Analysis 2019

Historical Materialism was once all the rage. Freakonomics is historical materialism without Marx. I am giving an overview and then showing how Marx and basic questions about material conditions can enlighten.

Review of Marx

Wading through the invective and gossip of three or four volumes of Marx’s Capital to find the nuggets is tedious:

1. dictatorship of the proletariat
2. labor theory of value
3. class struggle
4. money isn’t capital
5. failure of colonialism
6. Centralization of production leads to unions.
7. business cycle
8. Competition drives down margins in investment and production. Profit requires disaster and  disruption.

You’re welcome. Sorry if I missed any. These ideas have been absorbed into common use. Occasionally an economist makes a living inveighing against or rediscovering one. Bernanke’s bad asset class or Tom Peter’s excellence, for instance. Here is a list of some other market issues:  

1. Winners change the rules.
2.  Parkinson’s Law
3.  Peter Principle
4.  Dilbert Principle
5.  treat vs cure
6. positive reinforcement frustrated by regression to the mean
7. products that create their markets

In fairness Communism is new and these issues also occur in markets:

1. People want things.
2. Some are more equal than others.
3. filthy factories
4. Aldi vs Target
5. responsibility for failure
6. excessive quality
7. standing committees

Socialism is treating constituents as donors. Socialism requires accommodation with Capital. Capital has no honor.  Lyndon Johnson was our socialist president. The few remnants of his programs stand against constant attack. The nature of accommodation defines the socialist. Are you a national socialist or an international socialist?

Where is the money?

Investors seek disruption and avoid disaster. One future disaster is described by the Council of Institutional Investors. The PDF on their website lists over one hundred companies that have unequal voting structure. These neutered shares form a large percentage of the market, indexes and funds.  Ask the Winklevoss brothers about Zuckerberg.

The obvious disruptor is China. The tax cut of 2019 releases capital to invest in China. Republicans were so anxious to free capital that they capped real estate taxes. Real estate taxes are noxious because they fund local services and thus encourage social segregation. The Republicans were following the age old schism between north and south. Southerners regard infrastructure as boondoggle. When the north got free after the civil war they were able to invest in light houses, canals, and railroads. Don John’s trade war with China backs up the boat so more investors can get on.

What is the Vote count?

Don John’s victory is attributed to racism, sexism, and jobs. Yes, but these terms lack content. It is asked why those who voted for Obama then voted for Don John. It wasn’t that many. Obama’s percentage of popular vote was not that great. It was the emergency room doctor; the guy comes to in the emergency room, looks up and says to himself:

-I hope he knows what he’s doing.

We were facing disaster. Stupid wasn’t working, maybe we should try smart. Considering how bad it was and the obvious disparity of ability, the percentage was pathetic. What surprised me was that after the guy got out of the hospital, he was so mad that he took the cast off with a hammer, was in such pain that he got drunk and then drove home.

Obama, from the same neighborhood, has Hugh Hefner's I can’t believe this smile. He is proud of being president and proud of the country for electing him. Like Tom Robinson, he felt compassion and tried to help. Like Tom Robinson this provoked their rage. If Obama cares about them, it means no one else does.

Sexism also lacks emphasis. Don John is a pimp. His entree to Manhattan was young girls and coke. The hospitality industry respects the auxiliary. We didn’t all come from the little house on the prairie, which wasn’t such a great deal either. Some of us came from the little shack by the railroad. The reason Miss Kitty had a heart of gold is because that was mom. Mom got beat on the street and Marshall Dillon walked by, or maybe it was the marshal beating her. Whoever, that was Dad. That’s why she kept you. Coming off the exit ramp you will see a gas station, fast food franchise and a motel.

Don John’s abuse of immigrants has an impact. The fruit rots on the trees. Restaurants have off days. The minimum wage has increased. This woke the Federal Reserve. The Fed sees inflation as wage inflation. Raising interest rates chokes off small business, the business that competes on wages. The reason the Fed has forborne is that they recognize a blip.

What should the Democratic Party do to win the 2020 presidency? Recognize demographics. There is no Hispanic voting bloc. There is no women’s voting bloc.  There is no youth vote. The middle class is tiny. There are only two voting blocs, those who vote their interest and candidates: racist and black. There are numerous triggers but only two actual segments. The black vote deserves more than smiling and playing the saxophone.

Who got paid?

Most presidents had foreign loyalties. When Kennedy said he was a jelly donut he was expressing a loyalty that he shared with his father. Hillary strikes me as an old fashioned French girl. The puzzle is Putin. I can understand the satisfaction of paying the US of us back for installing him. But this is dangerous. He is twisting our tail and he is the leader of a nation. Why would Putin think he is blessed? Putin got paid.

Who paid Putin? The likely candidate is the Health care industry. When Hillary proposed her fetcher bill the Saudis sat down and Ross Perot complained about the service. I haven’t seen that money since Nixon’s drug, I mean trade deal with China. There is such profit that it would be irresponsible for health care, drug and insurance, to let Hillary beat Don John. Electioneering doesn’t change minds, it works the edges, and it matters in tight elections. Why did health care off shore its electioneering? Don John is unreliable and Putin doesn’t report.