Sometime in the early 1960s, as I recall, U.S. Steel and lesser American steel production companies hit a brick wall when they could no longer produce steel at prices competitive with the recovered European companies that had modernized their plants as they had rebuilt them after WW2. Why had our U.S. producers — starting with the vast advantage of their plants still in place — not maintained their upkeep or modernized?

I discovered the answer to this question in two somewhat ominous, if not well known facts about Americans’ understanding of property rights and obligations that I had unearthed while researching a dissertation on property theory:

1) The first disconcerting fact that was reported by our leading planning and resource studies of those days was that the U.S. was virtually unique among developed nations in making planning decisions on a short term year to year basis rather than looking decades into the future to see what challenges it would bring. In the case of U.S. steel, the management had concentrated on short term profit-making distributed to shareholders rather than investing part of their proceeds in the future production needs in the face of competition from other nations’ updated steel production technologies.  A central concern of our resource planners was that the U.S. was not investing monies to maintain our basic infrastructures.

Our national highway system was a prime case in point. Eisenhower had persuaded our Congress during his term to invest the funds necessary to build our national highway system as a defense measure. Trucking interests had also lobbied heavily for highways against their competitors — our railroads, although the latter were far more efficient in the uses of energy and levels of pollution. The additional catch was that the highways once built were to be maintained by the states through which they passed. Jump to the present and bridges such as that collapsed in Minnesota and we are faced with unknown risks by the widely different standards of maintenance allowed by specific states out of their limited state tax revenues.

2) The second ominous discovery that I made on the theoretical side was that contrary to the law books I had been studying, property, itself, did not consist of THINGS (res) owned by individuals or groups, but rather LEGAL RELATIONSHIPS of complex kinds that could be roughly divided into legal rights and powers held by some that correlated with duties and liabilities of others. Property, in other words, was a complex game with rules. These rules in turn were not absolutes, but rather subject to rewriting (often behind closed doors) by any and all types of legislative and judicial enactments — or failures to act. In the 1960s one saw a rough equilibrium between the powers of major money interests (corporations and such) and workers (led by their unions) which were in turn mediated by the powers of governments to regulate competing interests and to protect against dangerous conditions or practices. This is a somewhat simplified version of the theoretical studies of Wesley Newcomb Hohfeld which may be discovered in his classic Fundamental Legal Conceptions — 3 of 8 projected essays cut short by his death: http://en.wikipedia.org/wiki/Wesley_Newcomb_Hohfeld

Jumping ahead in history I was increasingly distressed to see the balance between interest groups being unsettled by successive political administrations. When JFK came to office, the maximum tax rate on income was 91%. Kennedy reduced it to 73% but closed a number of tax loopholes so that this actually produced an increase in tax revenues.

But when Reagan entered the scene he launched a major attack on taxes in general which he claimed were wasted by “big government” — one of the early slogans to emerge from the right wing think tanks spawned by the efforts of God and Man at Yale, William F. Buckley, son of a Texas oil baron and admirer of Franco’s fascist Spain where the Buckleys spent their holidays. Reagan killed our progressive tax system and opened the door to the greed that we now see manipulating our national property allocations. We are not providing medical care, decent education, keeping up our bridges and other critical infrastructure elements ranging from deteriorating dams to ancient steam pipes and bridges likely to destruct — taking with them lives and property. The Minnesota tragedy is also a terrible financial blow to Minnesota and other states that have depended on 35I to transport manufactured goods and other critical materials.

Bottom line here — the U.S. will not be able to compete with its wiser fellow nations that have put their houses in good order decades ago — cost efficient universal medical care to energy efficient train systems kept in place and expanded. And the greedies who have rewritten our property laws are now running wild and taking it all for their own heirs and whims.

American taxes are not being spent at home where they are needed. They are being terribly wasted to wage wars and plant military bases in the interest of such as the Halliburtons and Bechtels which in at least the first instance has just relocated itself in a small Arab nation where it will not have to pay taxes at all to America and our needs at home.

So it goes with our Cheneys. They have their hands in the cookie jaw and they are gobbling up our American resources as fast as they can.

And per the lead story in the NY Times today things are not looking good for the rest of us:

Markets Fall as Lender Woes Keep Mounting
By VIKAS BAJAJ
Stocks tumbled on fears that worsening ills in the mortgage
and debt markets could soon take a significant toll on the
overall economy.

http://www.nytimes.com/2007/08/04/business/04stox.html?th&emc=th

Let us hope that it is not too late to rescue our nation from these greedy oligarchs.

“A war is just if there is no alternative, and the resort to arms is legitimate if they represent your last hope.” (Livy cited by Machiavelli)

Ed Kent 212-665-8535 (voice mail only) [blind copies]
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