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Friday, February 25, 2005
 Getting a grip on Social Security: The flaw in the system

Topic: Facts and Figures
The Social Security issue fascinates me because it encompasses so many issues: macroeconomics, the media, presidential deception, public beliefs, fundamental economic ideology, and more.

Overall I think that President Bush's attempt to promote private accounts for Social Security has been great because it has caused many people, including myself, to learn a lot more about this system, and the more I learn the more I see how good a system it really is.

There is a core fundamental issue that has created the so-called "crisis" in the Social Security system, and I just figured out exactly what it is and how it works. As I have mentioned in my two articles on Social Security:

Social Security: Bush's Lies vs. Reality

The Truth About Social Security

General income disparity and wage income disparity have increased dramatically since 1980 in America. This is a major factor in how the "crisis" has come into being. The exact way in which wage disparity has led to "the crisis" (which isn't really a crisis at all as we will see) is this:

  • The Social Security tax, or really the OASDI tax, is levied on wages up to a certain point. That point is currently $90,000. Wages above that point are not taxed by OASDI.
  • Social Security benefits are adjusted yearly according to WAGE INDEXING. Wage Indexing is based on AVERAGE WAGES.
  • Over the past 25 years, average wages have increased and are projected to continue to increase, well above the rate of inflation.
  • Over the past 35 years, MEDIAN wages have remained relatively flat, which is to say roughly equal to the rate of inflation.

The result of this is that the scheduled benefits to be paid out to average workers in 2050 are 40% higher than the benefits paid out to current retirees in real terms.

Basically, even though the income of the average worker (median income) in America has barely increased in real terms since 1973, the average income of the country has gone up significantly because the wages of the top 10% have pulled it up. Since the adjustments to benefits are made based on average wages, that means that the benefits being paid out to beneficiaries have been going up at a rate higher than the incomes being taxed to pay into the system.

Wage Difference

The above graph shows the percentage by which the average wage is higher than the median wage, over time. As you can see, there has been a 10% increase in the difference between the average and median wage since 1974.

This is a problem because of the wage cap. The high incomes at the top end of the pay scale have pulled the level of scheduled benefits up, but those high incomes are not taxed by the Social Security system, so we have benefits going out that are adjusted by a different factor than what is used to bring payments in. In short, the middle class and poor are being called on to meet the spending requirements set by the wealthy.

I have not yet heard anyone explicitly address this issue. I did not understand it completely until just now. I understood that wage disparity and the wage cap were problems, but I wasn't sure exactly in what way it was causing the problem.

Now that the problem has been defined, solutions become quite easy.

Of course I will continue to contend that wage disparity is the real problem in the first place, but I'll assume that fixing wage disparity is beyond the scope of fixing Social Security. Therefore, there are various ways to fix this specific problem, which would also fix the Social Security problem as it exists today in general. The following are independent steps that could be taken to solve the problem:

  • Base the benefit adjustment schedule on inflation indexing instead of wage indexing
  • Base the wage index on median wages instead of average wages
  • Remove the wage cap completely

Doing any one of these things should alleviate the problem, while Bush's privatization plan actually makes the problem worse.

The problem actually exists in the way that benefits have been calculated since the 1970s, but it has become more noticable with time because of the massive increases in wage disparity. This problem would actually exist with or without the baby boom generation. Wage discrepancy, and a calculation that doesn't take wage discrepancy into consideration, is the source of the problem. The reason that it wasn't an issue in the past is because there was lower wage discrepancy in the 1940s-1970s.

In fact, I now argue that the middle-class and poor have been significantly over taxed since 1983, when the payroll tax was overhauled, due to this calculation error, which is exactly what this is, an error. Regardless of whatever else is done, this error HAS to be corrected. It's like a bug in a computer program; it is a flaw pure and simple. We have, as far as I am concerned, been overpaying beneficiaries for the past 10-20 years and are currently scheduled to continue doing so. The amount of overpayment has probably been small thus far, I would guess a matter of less than $100 per check, but with so many checks it all adds up.

The working-class, with 30+ years of stagnant wages, cannot continue to pay a tax based on the rise in wages for the top 10% of wage receivers. Of course, the best solution here would be for the working-class to fight for increased wages in the first place and for wage disparity to be reduced, but we can't wait that long to fix this problem, which is actually the product of a flawed algorithm.

What could be the very best solution overall would be to eliminate the wage cap and change over to using median wage indexing. This should both make the system indefinately solvent, and actually provide enough of a boon to allow the OASDI tax to be reduced by 1% to 2%. There is your "privatization", just reduce the tax and let people keep more of their money in the first place.

Please write to your Senator, or to all Senators, and urge that this issue be acknowledged and addressed:
US Senators


Posted by rationalrevolution.net at 11:57 AM EST | Post Comment | View Comments (6) | Permalink
Updated: Wednesday, March 9, 2005 9:32 AM EST
Thursday, February 24, 2005
 Move over Gingrich, Frank Luntz is the new Goebbels

Topic: Facts and Figures
Back in the 1996 Newt Gingrich put together an outline for the Republican Party on how to frame issues by using language called Language: A Key Mechanism of Control. He had a list of positive words that Republicans should use when describing their own policies, and a list of negative words to use for describing Democrats and their policies. The purpose was to get all Republicans framing issues in the same way, and ensure that all of the Republican politicians were using their words in the most "persuasive" and "effective" way.

Now Dr. Frank Luntz is taking Republican propaganda to the next level. Who is Dr. Luntz? Dr. Luntz is founder of Luntz Research Companies, an organization that advises corporations and "conservative" politicians on how to frame issues and select words. Luntz conducts polls and does other forms of market research to determine how the public views issues and assess the dominant public beliefs. Luntz then advises clientele on how to play to existing perceptions/misperceptions.

For Luntz it is not about determining facts, it's about determining perception. It is about playing to beliefs.

An internal document produced by Luntz Research Companies for the Republican Party was leaked onto the Internet and has been making its way around the blog circuit. Right click on the following link: Luntz Document and select "Save As" to save a copy of the file.

This propaganda coaching document covers many topics, and is well worth a full read in order to see the tactics behind the Republican machine: you will be impressed with how closely Republican rhetoric over the past 3 or 4 months follows these guidelines.

Of the many topics covered by the document, I'd like to focus on Social Security.

Some of the major suggestions made by Luntz are to:
  • Use the word personalize instead of privatize
  • Replace the idea of Social Security with the idea of Retirement Security
  • Reinforce the idea that the government cannot be trusted with Social Security funds
  • Appeal to people's emotions instead of using facts
  • Associate the President's plan with financial security
  • State that the government has taken this money from tax payers and Republicans want to return it to them
  • Appeal to the children. Talk as much as possible about children and grandchildren
  • Drive home that the system is going bankrupt
  • Appeal to bipartisanship. Claim that the Republicans want to work on a bipartisan basis

There are so many issues to discuss about this that it's hard to know where to begin, but first I'd like to make a connection to demonstrate just how this document has been put to use.

Regarding the term "privatization" Luntz states:

DMUP the word "privatize" from your lexicon forever, but always link reform options to the success of programs like the Federal Thrift Savings Plan, IRAs and 401(K) plans.

In fact, as it now stands, 48% of Americans believe that people retiring before they do will benefit the most from Social Security, while only 17% believe that they personally will benefit the most. That's why it is so important to replace the word "privatize" with the word "personalize."

Personalizing Social Security has a 17% higher favorability rating than privatizing it. That is, 51% of Americans believe personalizing the program is a good idea, while only 34% believe privatizing is.

41% of Americans prefer a PERSONAL retirement account to an INDIVIDUAL retirement account.

If necessary do what I do, and institute a strict policy among your staff that anytime someone uses either "privatize" or "individual" in the context of Social Security they must pay you $50. It works.

Now, having seen the way in which Republicans as a whole have been instructed to tailor their language, watch the following clip of US Senator Rick Santorum as he is questioned during a "town hall" meeting on February 22, 2005. Click the image below to view the clip.

Rick Santorum

As you can see, the lexicon is both in effect and receives applause. Interestingly, the Senator stated that "no corporation is taking over this money" and that "you are going to hold this money". That's interesting because I thought that all investment was a means of giving money to someone else to hold. I think that Wall Street would be interested to learn how people can invest in stocks without corporations "taking over the money". If what the Senator says is true then it puts our entire investment system into question, because after all, the act of purchasing an initial offering of stock is indeed the act of transferring funds to a corporation for them to use as they see fit.

If "we are going to hold this money" that would imply that its going to be under our bed in a shoebox getting zero interest.

At any rate, that's beside the point. The point is that its both interesting and somewhat scary to see these tactics at work, and this is just one example, but this isn't simply advice given to the President, this is a total party-wide system of verbal coaching, coordination and propaganda. These memos aren't designed to advise the President, they are designed to advise every Republican member of the House and Senate on how to "speak with one voice" and, more importantly, "tell the people what they want to hear".

Now to move to some other quotes from the document:

One of the really interesting approaches that Luntz suggests is to use the following type of statement when addressing the public:

I ask you to focus on the facts, study the issue, and then make up your own mind. When it comes to financial literacy and Social Security, the more you know, the better off we'll be.

This is interesting because in fact Luntz advises Republicans not to get too involved in the facts, but rather to appeal to people's emotions. Basically, the tactic here is for the Republicans not to present facts, but rather to tell people that they want them to independently research the information for themselves.

This does a number of things. First of all, the reason that the Republicans shouldn't present facts is because they don't have many real facts in their favor. By telling people to research it themselves, it gives the impression that the Republicans are confident that the facts support their case, but in reality they mostly rely on the fact that most people won't actually take the time to really research and understand the facts. Additionally, this can put people who try to present facts at a disadvantage. A common Republican tactic for years has been to accuse Democrats and "liberals" of being "intellectual elitists", such that when they do try to present facts, which can be a daunting task sometimes, the Republicans can then accuse them of intellectual elitism and trying to misrepresent reality with complex numbers. Presenting facts can sometimes lead people to feel as though they are being talked down to. Republicans rely on this by not presenting facts, telling people that they should come to their own conclusions, and then appealing to emotion. As soon as other people try to present facts to that same audience, many will then feel talked down to or will simply be disinterested in the more technical aspects of analyzing the situation. It's an attempt to setup a no-win situation for anyone presenting factual information.

The Overview of the section on Social Security starts out:

Those who define the issue determine the outcome

This chapter is unlike any language text I have ever written because Social Security is unlike any other government program. Sure, you will find the traditional "words that work" boxes sprinkled throughout the document and helpful hints about what phrases to emphasize and what language to avoid. But this is a much more conversational document because Social Security is so personal and so much a part of the American psyche that it simply can't be dealt with in the traditional manner. It is not enough to say the right words. You need to feel it as well.

A "truism" that Luntz states should be the core of the Republican message is:

It's YOUR money. YOU earned it. YOU sacrificed for it. The government TOOK it from you. Now its YOUR chance to take control of YOUR retirement. Remember, its YOUR future. It's YOUR life. And from now on it should be YOUR Social Security.

A suggested "Perfect Statement":

Under the current system, people who are just entering the work force today will earn almost no interest on the money they put in over their lifetimes. That's right, almost no interest. And even workers in their forties will receive a paltry two percent return on their Social Security benefits. That's less than the inflation rate.... Our nation's workers deserve better.

As I will show in other examples, this document doesn't even present factually correct talking points to Republicans, and thus it's no wonder that they have been making no many misstatements.

The reality is that there is no real way to calculate a "rate of return" on Social Security at all, because its not a traditional investment system, it's an insurance system. The "rate of return" for Social Security is like the "rate of return" on your home insurance. If you never file a claim then you have a negative rate of return. If your house burns down then you have a high rate of return. The rate of return is totally dependant on what services from Social Security you use, how long you live, and what your income levels were when you were working. People with a lower income get higher relative benefits once they retire, so poor people get a higher "rate of return" than the rich. More on this will be addressed shortly.

Although Luntz does advise Republicans to rely on emotional appeals, there is obviously a need for at least some facts. Luntz suggests to stick to "four straightforward facts":

First, when Social Security was first created, men made up the vast majority of the workforce and had a life expectancy not much more than 60 years. Today, in a majority of households, both men a women are working, and our life expectancy has risen more than 10 years. We are living longer, healthier, more productive lives and that trend is going to accelerate as we continue to lead the world in medical breakthroughs. But while that is great for us here today, that's not great for an antiquated Social Security system.

There are a number of problems here. First of all, the fact that more women work today actually helps the Social Security system, it doesn't hurt it. Women were still able to draw retirement benefits from their husbands when they died in the past, which meant you had more people drawing benefits that didn't pay in than is the case today. Secondly, living more productive lives should alleviate problems with Social Security, not make them worse. The real problem is that while we are leading more productive lives, the pay for the bottom 85% of the population hasn't increased one bit since 1970 in inflation adjusted terms, while pay for the top 1% has sky rocketed. The reality is that: yes, we are all more productive, but we aren't seeing those gains, hence the Social Security funding problems in the first place. And lastly, the US is declining in its role of leading the world in medical breakthroughs.

Second, it is a fact that in the 1950s Social Security had about 16 workers paid in for every person drawing out. Today, the ratio is just 3 to 1, and when our kids retire, it will be down to two workers for each beneficiary. The burden we will be placing on the workforce is unimaginable, and it's getting worse. Think you taxes are too high now? Imagine what they will be in the future if we don't make the necessary changes in the present.

This is a highly misleading statement for reasons that I have demonstrated in other articles on this website:

Social Security: Bush's Lies vs. Reality

The Truth About Social Security

The truth is that the ratio of workers to beneficiaries has been 3 to 1 for more than 30 years.

Third, it is a fact that the expansive Baby Boomer generation continues to age- and the oldest of them turn 60 next year. Because of that, the number of workers in America has increased since the 1950s, but the number of retirees has increased much faster.

I'm not even sure that this statement makes sense or what it's point is supposed to be. Its actually a let down considering this guy is supposed to be a propaganda master.

And fourth, it is a fact that the return on your Social Security dollars is a paltry two percent (actually 1.6%). That's it - two percent. That's not even more than inflation! That's not enough to retire with a nest egg. That's not enough to retire with a sense of security. To me, depending on a two-percent rate of return over the lifetime of paying into Social Security is more of a risk then trying an alternative approach.

This statement is a complete farce. First of all, as has been stated, its impossible truly calculate a "rate of return" for Social Security, but there have been calculations done that show what some averages are.

According to The Hill:

A Treasury Department paper written in 1995 looked at data from Social Security beneficiaries and concluded, "Social Security net returns are strongly progressive." For working males, the rate of return was 5.5 percent. Social Security's rate of return for lower-income males was 6.17 percent and for higher income males, 5.04 percent.

In June 2001, Social Security economists and actuaries wrote a paper, referred to as Note 144, on rates of return for hypothetical workers. They concluded that low-income "two earner couples" born in 1955 will earn a 3.2 percent rate of return, a medium income bracket would earn just a 2.15 percent rate of return, and a high income bracket couple would earn just 1.49 percent.

Note 144 also states that making rate-of-return comparisons with private investment plans is inadequate because Social Security offers benefits that most private plans do not, such as guaranteed cost-of-living adjustments based on the consumer price index and benefits for life in the event of disability.

Even the extremely low hypothetical "rates of return" mentioned by Luntz are already adjusted for inflation, yet he claims otherwise.

Furthermore, the Social Security Commission explicitly states that trying to calculate a "rate of return" for Social Security is really mostly meaningless:

In September 1998, the General Accounting Office reported that there was substantial disagreement about whether it is appropriate to apply the rate of return concept to the Social Security program. The GAO report said:

Supporters of such an application point out that a rate of return would provide individuals information about the return they receive on their contributions to the program. However, others contend that it is inappropriate to use rate of return estimates for Social Security because the program is designed to pursue social insurance goals, such as ensuring that low-wage earners have adequate income in their old age or that dependent survivors are adequately provided for. In addition, calculations for rates of return rely on a number of assumptions that affect the resulting estimates. For individuals, the actual rates of return can vary substantially from the estimates due to various uncertainties, such as a worker's actual retirement age and future earnings.

SSA strongly agrees that it is inappropriate to apply individual rate of return estimates to Social Security. Social Security, like other social insurance programs such as Medicare, is not designed in a way that it could be appropriately evaluated by individual rate of return estimates. The program is designed to provide adequate income for workers and their families when the worker retires, becomes disabled, or dies. Historically, the program has been judged by the extent to which benefits replace pre-retirement earnings and how much those benefits help reduce poverty, not by estimates of the individual rate of return on contributions.

Furthermore, the program's full value cannot be accounted for when using individual rate of return estimates. Social Security is more than a social insurance program that protects people when they retire. It also protects workers against other risks over which they have little control. Almost 3 in 10 of today's 20 year-olds will become disabled before age 67 and 1 in 6 Americans will die before reaching age 67. Individuals benefit from Social Security not just through their own worker benefits but through the protection provided to workers' families against these risks. Currently millions of Americans are directly benefiting from that protection: about 1 in 3 beneficiaries is not a retiree but a disabled worker, dependent of a disabled worker or a survivor of a worker who has died.

Our ability to inform workers of the rate of return on their Social Security contributions is limited for several reasons. For example, the Social Security program is a family program that, generally, provides greater benefits to workers with larger families. But our records do not include family linkages until benefit applications have been filed. Similarly, replacement rates for lower income workers are greater than for workers with higher incomes. Without knowing lifetime average earnings or the size of a worker's family, any information provided in the Social Security Statement could significantly misstate many workers' actual rate of return. Moreover, any rate of return estimate would be extremely sensitive to periods of unemployment and other related factors.

So, interestingly, right now, Social Security is an extremely family friendly program that helps low income large families the most. More to the point, Social Security isn't a retirement system! No one has ever claimed that people should rely on Social Security as their only means of retirement. Its a SECURITY SYSTEM, not a retirement system.

I found this next quote to be a particularly nice gem:

Let's face it - seniors love to talk about their kids and grandkids, so talk about them. Tell them about the opportunity America has to insure their retirement security. This point, though simple, is extraordinarily powerful, ESPECIALLY with older women... It is the ONLY way that you can sell them on this proposal.

I think that speaks for itself.

The last example that I'm going to highlight touches on a very fundamental issue, that of the ability to pass your "personal Social Security" investments on to your heirs. As an example of "words that works", Luntz puts forward the following:

It's their money but the problem is the federal government has spent it. Now we need a tangible asset alongside Social Security so people can point to it and say "that's MINE, and if I don't live to collect my Social Security that's inheritable wealth". It's something that they can depend upon in their old age.

Actually, the fact that the current system is a collective pooling system is exactly what makes it superior for its intended purpose, which is caring for the elderly and disabled. Part of the way that Social Security works, as has been said, is like an insurance program, where everyone pays into the pot, and only those that survive to collect benefits get paid out of it. That means that a part of the funding comes from the fact that not everyone collects. Removing that aspect from it significantly reduces the viability of the program and the amount of money in the pot to pay the benefits of seniors. Right now Social Security can be collected by dependants in the event of a death, such that if you die your children under 18 would get your benefit, or your wife could get your benefit. By making it inheritable it guarantees that there will be less money per beneficiary, because some of the money is going to be taken out of the pot to be passed on to people who would ordinarily not be beneficiaries.

In short, like every insurance program, the strength of the system is that it pools risk. Exactly what is weak about the Bush proposal is that it individualizes risk.

Their proposal is the equivalent of saying that when you pay for your car insurance, that if you die in a non car related way that all the money you paid into the system would be paid back out to an heir. Okay.... that sounds nice...., but that would mean that the cost of insurance would either have to go up dramatically or else benefits would have to be reduced. Once you eliminate risk pooling, the whole system is shot.

That is also another reason why even making privatization optional hurts the entire overall system, because the more people pay in, the lower overall risk is and the greater that overall benefits can be. Once you start reducing the size of the pool the whole system becomes more problematic.

Well, that is enough analysis of this document in regard to Social Security. I highly recommend that you download the document and read it through yourself, then simply watch TV and read the news and you will see that on many issues, not just Social Security, the Republicans are speaking from this playbook in ways that have been devised to be intentionally deceptive.


Posted by rationalrevolution.net at 1:05 PM EST | Post Comment | Permalink
Updated: Thursday, February 24, 2005 3:20 PM EST
Tuesday, February 22, 2005
 Regarding No Place to Hide

Topic: Commentary
Robert O'Harrow's new publication, No Place to Hide, is causing a stir, but thus far no one seems to be putting all the pieces together. The issue of corporate data mining has been well known to me for a number of years, and has been a topic that I have followed as a part of the industry for the past 3 or 4 years.

Interestingly, in this country especially, everyone seems to be dreadfully scared of the government, while exceedingly flippant about the affairs of private industry, as if one manifestation of power and control is really any different than another.

The discussion put forward by O'Harrow continues this trend, even while acknowledging the fact that all the data mining is done by private industry.

To learn more about No Place to Hide see: No Place to Hide: Freedom and Identity

You can also hear an interview with O'Harrow from the Diane Rehm Show here: Robert O'Harrow: No Place to Hide

The fact is that virtually every electronic transaction that we engage in is stored in databases and used to build profiles of individuals. This is really just the beginning of the development of systems that will track, monitor, and analyze every person who participates in the digital economy, and even some who don't since many transactions take place outside of your direct involvement. For example, if you sign up for a magazine and pay by check, that information is still all stored in databases, even if you don't participate electronically yourself.

Every digital record about you has value, it is a commodity that is bought and sold on one of the fastest growing markets in the world today, the personal information market.

Since many issues about this technology have already been raised in the mainstream media, I will pass over those concerns (which you can familiarize yourself with my visiting the links I have provided) and get to my primary concern.

When asked how this technology could impact the average person on a daily bases, even O'Harrow missed the bigger picture. His comments have been that it causes a problem due to increased cases of identity theft and the potential for market segregation, whereby people who are more easily "exploited" will be given preferential treatment by industry because they part with their money more freely.

These are valid concerns, but my biggest concern is how this relates to employment and the labor market.

Right now there are many different trends taking place in the employment markets that are in the process of coming together to create extremely hostile labor conditions.

The use of hiring agencies and temp agencies is currently increasing rapidly. The percentage of people working for large corporations has been steadily increasing since the 1960s, and now over 50% of the population works for companies of 500 employees or more. American workers are facing stiff competition from foreign markets in Asia, where workers have few rights in places like China and Indonesia. The use of private data mining and more powerful technology is making the collection of information and the creation of profiles of individuals much more efficient and cheap. Employers are increasingly discriminating based on lifestyle and activities outside the workplace.

In relation to this last piece of the puzzle, much has recently been made about the company in Michigan, that has adopted a policy of not allowing any of its employees to smoke at all, even outside the workplace.

More on this can be seen here: Company trying to cut health care costs, but privacy, rights questions raised

Companies are also increasingly using credit reports, criminal background checks, and drug testing of employees as well, even when this information is not directly related to the job at hand.

What I believe we will see within the next 5 years is that individual profiles will become so cheap, because they can be produced purely by computers with no human interaction needed, that virtually every hiring agency will offer them as an additional service for employers when they screen candidates for positions. Employers will also use them directly as well.

Digital profiling is more than just tracking all of your digital interactions, such as what you read, watch, buy, the websites you visit on the internet, etc. Profiling goes beyond tracking these mere bits of information and uses that information to create personality profiles, political profiles, behavioral predictions, etc.

Within the next 5 years, being a regular visitor to this website could prevent you from getting hired. Having this website could easily prevent me from getting any jobs whatsoever.

How much porn do you view on the internet? Do you purchase porn via pay per view? Do you rent or buy porn using credit cards? Well, your employer is likely to know all that in a short number of years.

Do you read "leftist" media, or do you just watch FOX and sit on the couch when you come home? Most employers will favor those people who have few ambitions and simply accept day to day life and have the profile of people who go with the flow and don't think about bigger issues or complex social questions. Employers want followers, people who are likely to buy into whatever they tell them. People who are likely to put the interests of the organization over their own personal interests, or more specifically, people who have no personal interests that conflict the employer's interests.

There is no real right to privacy in America, privacy has only been afforded us due to the lack of ability of people to infringe on it. As the technology develops to infringe on our privacy we have few if any legal protections.

Ironically, despite the fact that Nazism and the Cold War gave generations of Americans a fear of government as "Big Brother", our government has many more restrictions placed on it as to how it accesses and uses private information. Precisely because of the fear of government in America we have created a relatively limited government, although the Bush administration has quickly moved to remove many of those limitations and increase the role of the Police-State in America. Despite that, private industry is the real "Big Brother" in America, and there are very few regulations on the type of access that private institutions have to your "personal" information.

Technology and industry are owned and controlled by a relative few, leaving "we the people" with virtually no control over our society, our culture, and now, not even over our personal lives.

For information about protecting your privacy on the internet visit StayInvisible or any other of a number of websites dedicated to free proxy servers.


Posted by rationalrevolution.net at 9:46 AM EST | Post Comment | View Comments (2) | Permalink
Updated: Tuesday, February 22, 2005 10:39 AM EST
Monday, February 21, 2005
 Regarding Bill Gates and other communists

Topic: Commentary
Over at CNET Richard Stillman recently called attention to a bit of rhetoic coming from the direction of Bill Gates:
Bill Gates and other communists - CNET News.com

Apparently the exact comment that Mr. Gates made was:

"I'd say that of the world's economies, there's more that believe in intellectual property today than ever. There are fewer communists in the world today than there were. There are some new modern-day sort of communists who want to get rid of the incentive for musicians and moviemakers and software makers under various guises. They don't think that those incentives should exist."

As a software developer, I myself am extremely worried about software patents and intellectual property. I'm worried that too many people do support these concepts to extremes that go way too far.

The patenting of processes and general concepts as used in software development is highly problematic, and I'm outright opposed to it. Not only this, but it's only a matter time before every new action and technique known to man can become patented and owned by law, and that's really what these people such as Bill Gates, who are pressing for stronger "intellectual property rights", are going for. The implications go way beyond the media industries however.

Think of the implication in something like the auto industry.

When Ford makes a new car, they could conceivably patent every process for putting the car together and taking it apart, thereby creating a monopoly on the ability to do any work on the cars, putting every independent mechanic out of business.

Think it won't happen? It certianly can.

When Ford, or any company, builds a car certain processes are needed to take any part of the car off and put it back on. Break line replacement, engine swap, changing the spark plugs. All they have to do is outline a unique set of steps, which they can engineer into the process through the design of the car, and then patent that process and then require anyone who does any work on their cars to either pay them a licensing fee, or face court.

This would effectively make it illegal to work on your own car.

This is already what is beginning to happen in the software industry. What has allowed software to develop so rapidly has been the extremely low barriers to entry into the marketplace, and the fact that anyone can sit and home and create products with almost no cost other than their own time and labor.

Software piracy is one issue, but what Mr. Gates has been involved in, and what this industry is now involved in as a whole, is the patenting of concepts just because someone thought of it, and applied for the patent, first, in an industry where the entire process is based on thinking of concepts. It's like the idea of a painter patenting a painting technique and then trying to collect licensing fees for everyone who moves their brush in a certain way.

So many people don't seem to understand where this yellow brick road is leading....


Posted by rationalrevolution.net at 9:27 AM EST | Post Comment | Permalink
Updated: Monday, February 21, 2005 10:15 AM EST
 Introducing the rationalrevolution.net blog

Topic: Announcements
Having started rationalrevolution.net before blogs became popular, it has taken me a while to develop a blog for the site.

In addition, I felt (and still feel) that the article format was superior to the blog format for the larger and more in-depth publications that I was putting together and will continue to put together.

There are many smaller comments and topics of discussion that I would like to address, however, which do not warrant the writing of a full article, and that is where the blog comes in.

Hopefully the addition of blogging to rationalrevolution.net will allow me to touch on more issues and to be more timely.

I will also post Announcements here when I publish new articles, which will allow readers to post comments back directly concerning each individual article. I am also going back and posting a blog entry for all of the existing articles as well in order to allow feedback. I still encourage the use of the feedback e-mail for general commentary about the website however.

One of the great results of the Internet has been the ability of people to communicate outside of the established channels. Internet news sources, commentary and analysis websites such as mine, and blogs are continuing to show what so many in America and around the world have known for so long, which is that journalists aren't paid to expose the news, they are paid to filter it.

Blogging and Internet media publication are also continuing to upset establishment media organizations and journalists because it is proving that "we the people" are better at informing ourselves and each other for free than many of these mouthpieces who are paid millions of dollars a year are.

Like the rest of rationalrevolution.net, this blog is, and will remain, advertisement-free, simple and content rich.

If you wish to have your link added to this website contact me at gp@rationalrevolution.net.

All external links are independent of rationalrevolution.net and do not necessarily reflect the views of rationalrevolution.net.

All views expressed at rationalrevolution.net are those of the author only and do not necessarily reflect the views of any linked or mentioned individuals or orgnaizations.

Thank you


Posted by rationalrevolution.net at 9:23 AM EST | Post Comment | Permalink
Updated: Thursday, February 24, 2005 8:13 AM EST
Friday, February 4, 2005
 Understanding Capitalism Part IV: Capitalism and Culture

Topic: Announcements
Understanding Capitalism Part IV: Capitalism and Culture


Posted by rationalrevolution.net at 12:01 AM EST | Post Comment | View Comments (19) | Permalink
Wednesday, February 2, 2005
 Social Security- Bush's Lies vs. Reality

Topic: Announcements
Social Security- Bush's Lies vs. Reality


Posted by rationalrevolution.net at 12:01 AM EST | Post Comment | View Comments (6) | Permalink
Tuesday, January 11, 2005
 Understanding Capitalism Part III: Wages and Labor Markets

Topic: Announcements
Understanding Capitalism Part III: Wages and Labor Markets


Posted by rationalrevolution.net at 12:01 AM EST | Post Comment | View Comments (3) | Permalink
Sunday, January 2, 2005
 The Truth About Social Security

Topic: Announcements
The Truth About Social Security


Posted by rationalrevolution.net at 12:01 AM EST | Post Comment | View Comments (7) | Permalink
Sunday, November 21, 2004
 Understanding Capitalism Part II: Personal Property, Money and Finance

Topic: Announcements
Understanding Capitalism Part II: Personal Property, Money and Finance


Posted by rationalrevolution.net at 12:01 AM EST | Post Comment | Permalink

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