UPCOMING EVENTS
The next ORDC meeting will be Tuesday, 23 February 2010 at the Pizza Factory as usual. Our second public forum will discuss campaign finance in light of the recent Supreme Court ruling granting corporations unlimited ability to make political campaign contributions. The reasoning is that corporations, as legal persons, should have the same right of expression as individuals. Corporations gained the status of legal persons in 1886 in the decision Santa Clara County vs Southern Pacific Railroad. The 2010 decision relies on this idea and seems to me to be the legal crux of this decision. Bring history, data, anecdotal evidence, and political theory to support your positions. We will be adding a format change; Speaking will be limited to three minutes at a time until everyone who wishes to speak has and then can repeat, again limited to three minutes.
We will also discuss whether to have occasional meetings in Lone Pine and if we would like to put on a spring garage sale.
GRIDLOCK, PEAK OIL AND ZERO-SUM GAMES
As all of us have observed, the political process has become increasingly rigid and polarized. I think I have the reason for this trend to ossification. As long as the economy was growing, measures changing the economic pie could be made which benefit everyone. All parties wind up better off. Peak oil has changed all that. With a stagnant economy, one slice of the economic pie can grow only at the expense of another slice. This is the essence of what are known as zero-sum games. The sum of all the benefits and losses is zero. Most economic exchanges are not zero-sum. Each party considers what they are exchanging for to be of greater benefit than what they are giving up. Commodity trading is a common example of a zero-sum game. Each participant’s long position is also someone else’s short position.
WHY IS GOVERNMENT DISPROPORTIONATELY EFFECTED BY RECESSION
Here in California we have just dealt (poorly) with a $28 billion deficit and are now confronted with a $20 billion deficit. These are huge reductions, much larger than the 6% decline in national gdp. Historically, California revenue has been 50% personal income tax, 30% sales and use tax, and 10% corporate income tax. The remaining 10% includes vehicle registrations, capital gains tax and other smaller contributions.
Much of this tax structure is a tax on growth. Consider corporate profits: These are the essence of growth. If growth goes to zero, so do profits and the tax on those profits. So, a decline the economy can result in a magnified decrease in tax receipts.