Tuesday, December 5, 2017

Fantasyland

The Republicans got their fantasy last week. The tax bill that nobody read passed the Senate, and now it only has to go through reconciliation with the House version to become law. There is no question that Donald Trump will sign it, also without reading it. All along we have heard how this will spur job creation. This is pure fantasy. What this bill will do is damage the insurance marketplace created by Obamacare, thereby raising premiums for everyone, and causing a drop in consumer spending as a result. Before that happens, companies who are already more than able to afford to hire new workers or give raises to existing ones will instead ramp up their efforts to acquire other companies, costing the economy jobs rather than creating them. Wealthy individuals will now have more money to invest in the stock market and more speculative items, and the stock market will also benefit from a rise in stock buybacks by corporations. This will fuel a rise in stock prices, but without a corresponding rise in value that would come from an increase in consumer demand. For a while, top executives will love the rise in the value of their portfolios of company stock, but something will have to give in the end. The prospects for consumer spending get even worse if the Republicans are able to use the sharp increase in the national debt that this bill will cause to justify cuts in social spending.

But let’s focus on that speculative investing I mentioned before. In the wake of the Bush tax cuts, a lot of that money went into mortgage backed securities, and we know how that ended up. As I discussed in a previous post, some will fuel speculation on the price of oil, which will mean that we will pay more at the pump. That will also cut into consumer spending. But it is the possibility of a speculative bubble that concerns me the most. On the one hand, Barack Obama was never able to completely undo the Bush tax cuts. Politically, the only way you can get tax increases through Congress is if you have a total economic collapse. I can make the case that George W Bush was an evil president, but faced with the prospect of a total financial collapse on a scale that would have rivalled the Great Depression, Bush was smart and sane enough to push for emergency measures to prevent that. Today, we are not so lucky. Even if Treasury Secretary Steve Mnuchin told Donald Trump that a new Depression loomed, Trump might simply refuse to believe it until even his real estate empire lay in ruins.

So where could the next financial collapse come from? It won’t be mortgages this time. In the wake of any collapse, measures are put in place to prevent a repeat. That’s why the last collapse wasn’t about internet stocks or savings and loans, to use two recent examples. The most famous collapse in financial history was the brutal end of the Dutch tulip mania, as shown in the chart at the top of this article. Today, the price of a tulip bulb reflects its value as an addition to your garden. There is a premium that allows tulip growers to make a reasonable profit. But during the Dutch mania, tulip prices rose astronomically, as everyone feared missing out on the enormous profits being made by others. People traded away their estates in order to possess a single bulb. By 1637, sanity returned and the prices plummeted, ruining many people financially in the process. But a tulip bulb is a tangible object. You can hold it in your hand. So it is clearly worth something.

We would all like to believe that we are smarter today. After all, the tax cuts for the extremely wealthy are going to those who are rich enough to invest in hedge funds. Hedge funds are lightly regulated because our law considers these wealthy investors “sophisticated.” Mutual funds are available for far lower prices, and are therefore regulated to protect the consumer. Of course, a lot of “sophisticated” investors fell for the Bernie Madoff scam, so you have to wonder. Where then might the next financial collapse come from? Something else might happen first, but let’s talk about bitcoins.

The chart of bitcoin prices above bears an eerie resemblance to the first part of the tulip chart. A bitcoin is different from a tulip bulb, however, because you can not hold a bitcoin in your hand. That means that, unlike a tulip bulb, the value of a bitcoin can drop to zero. If you are just hearing of bitcoins for the first time, they are the most popular of what are called cryptocurrencies. Basically, someone invented them out of thin air, and created an admittedly brilliant software package to monitor and control their exchange. This software is referred to as blockchain technology, and it has practical applications for transactions conducted with traditional currencies. But the bitcoin itself is a fabrication. The key selling point is that bitcoins are not controlled by any government. They are a pirate currency, and sure enough, many early adopters were engaged in illegal activities. But this is also libertarian money. You can conduct business in bitcoins, and pay no taxes because it is difficult to track the profits. Officially, only a limited amount of bitcoins will ever be issued, so prices reflect planned scarcity as well. But already billions of dollars have gone into bitcoins. Now, the CTFC has approved the selling of bitcoin futures, which makes it possible to speculate on the price of a bitcoin without even owning one. That means that the amount of money involved in the bitcoin market is about to explode. But who controls the bitcoin? No one knows. The trading is controlled by a company in the Philippines called Satoshi Citadel. The company has three co-founders and two additional officers, but nothing else is known of these men. They have no history before their involvement with this company. Miguel Cuneta is one of the co-founders, and the chief mouthpiece for the company. He talks a good line, but we have no way of knowing if he might have intentions that are not discussed in his official utterances.

Both the CTFC action and the tax cut bill mean that more money will go into bitcoin speculation. They will become further enmeshed in the global financial system, just as mortgage backed securities did. And then, one day, something will happen, and people will start to demand answers to uncomfortable questions. I hope I am wrong about this. I hope bitcoins really are the next great innovation after the internet itself, as Miguel Cuneta would have us believe. But I am chilled by having seen this show before. And if all of this results in a crisis, I have no faith in Donald Trump to get us through it. The only positive I can see is that it might create the political climate that would make possible the removal of both the Trump and Bush tax cuts. But it would come at a very high price.

If there is a song about the Dutch tulip mania, I do not know of it. However, this one describes a crash pretty well:

Monday, November 27, 2017

Cablization

If you rely on a cable company or satellite provider for your television programming, you start by paying for a basic package that includes the most popular, and innocuous, programming. If you want to add sports coverage, that’s extra. Movies, extra. And so on, to a very large bill if you want everything. And everything isn’t everything. With a full package, you still don’t have any alternative news sources. There is nothing comparable to this blog, or any other blog for that matter. There are no outlets for individual voices, because there is no money to be made from that, so the content providers believe. Even small record labels and distributors have no way to get word to you on cable or satellite about their artists.

Fortunately, for the moment, we have net neutrality. The term is intimidating, but what it means in plain terms is that all of the missing elements I mentioned above can be found on the internet. Unlike cable and satellite providers, internet providers are currently required to provide the entire internet, even the nooks and crannies that could never be profit centers for them. And that is really what the current struggle to save net neutrality is about. Donald Trump and his friends can talk all they want about the best way to promote innovation on the internet, but the truth is that they want to do away with net neutrality in order to allow large companies to monetize our online lives more effectively. That means having access only to websites they believe the can sell to large numbers of people. It means your preferred social network might become part of a premium package. It means you might lose access to Facebook for several months while they fight through a contract dispute with your provider. And it means that many independent musicians would lose their careers. That last one may be more important to me than to some of my readers, but it is part of a larger suppression of independent voices that would result from the loss of net neutrality. Many truly independent political websites would be lost, or at least lost to most people. Russian propaganda sites would not be lost, however, because they are well financed. They could meet the prices internet providers would ask to carry their services.

So far, I have only mentioned the natural consequences of the loss of net neutrality. By that, I mean the effects that accrue from the new financial model that would follow from a closed internet. This stifling of independent voices would happen for purely financial reasons, without any intent from internet service providers. But surely, there would also be intent. My current internet provider is Verizon, and they could decide that they will not allow access to any website whose politics they don’t like. There would be no way to stop them from doing this. Initially, there might arise new internet providers who fill the gaps by allowing access to these niche sites, but the financial aspects of doing so would make it hard to stay in business, while the Verizons of the world would be busy lobbying Congress to eliminate these competitors.

I hope my readers already know that I am writing this post now because Trump’s head of the FCC, Ajit Pai, has proposed eliminating net neutrality, and ushering in a new era of a fully monetized internet. The FCC has to allow public comments until December 14, and they will then make a final decision. During that time, we need to flood the FCC with our comments. We also need to pressure our Senators and Congressmen to go on record in opposition to Pai’s plan. We do not have to listen to any politician who wants to tell us what the new, monetized internet would look like. We already know. Almost all of us have cable or satellite television, so we’ve seen this show already. Fortunately, there are many links like this one that make it easy to send comments to the FCC. Please do so, and remember that adding your own comments counts for extra on the receiving end; it shows the FCC that you cared enough to personalize your response, and that it did not come from a bot.

My musical selection this week has to come from an independent band. Red Molly have self produced and released all of their albums. They have made a good career for themselves, using the strength of their performances, the occasional video like this one, their website, and online vendors for their CDs. One such vendor is CD Baby, and that is a site that would be hurt by the loss of net neutrality. So I would like to believe that artists like this would continue to be able to share their art with us even if we lose this fight, but surely their careers would suffer.

Monday, November 13, 2017

Paying at the Pump

I don’t want to see the economy collapse. I am not even wishing for a mild recession. But I watch as Wall Street continues to celebrate the Trump presidency, and I know this can not end well. I once worked as a financial advisor for Morgan Stanley. There are many reasons why it did not work out for me, but one was the toxic political environment I found there. There was a near religious belief in Republican policy prescriptions, despite the fact that the market had ultimately fallen in every Republican administration, and risen in every Democratic one, since World War II. That was in 2001, but even though it remains true today, Wall Street does not seem to have learned anything from this streak. I have talked about the reason for this disconnect before: the market is not the economy. Supporters of Donald Trump like to point to the Wall Street rally under his rule so far as evidence that the Republicans got it right this time, so let’s take a look at why the market, and corporate profits, are doing so well, and why that might not continue. I am not an economist, so I am going to focus on something most people aren’t talking about yet: the price of oil.

The price of oil is something anyone can see for themselves at the gas pump. It has a great impact on consumer spending. Far away from Wall Street or Capitol Hill, most Americans live from paycheck to paycheck, so more expensive oil means we must cut costs elsewhere in order to afford fill our tanks. When gas prices jump, there is a period of denial, in which Americans increase borrowing to make up the difference. We are in such a period now, but borrowing has its limits, so gas prices must come back down soon if consumer spending is to remain unaffected. Even now, Wall Street is being surprised by earnings reports in the retail sector. There are some exceptions, but the story these earnings reports are trying to tell is that Americans are downshifting their spending, so McDonalds and WalMart are doing well, but mid-range retailers and restaurants are not.

So what does Donald Trump have to do with the price of oil? Americans enjoyed a sharp drop in oil prices during the Obama administration. To give credit where it is due, this was partly due to a continuation of energy policies started in the administration of George W Bush that promoted and greatly expanded domestic oil production, and Trump is continuing this effort, possibly even expanding it by pushing for exploration and drilling on public lands. That’s bad news for the environment, but it helps keep prices lower at the pump. However, Obama also applied downward pressure on oil prices with his push for alternate energy, and here, Trump has completely dropped the ball. Trump has exerted upward pressure on oil prices by placing obstacles in the way of alternative energy development, thereby freezing our dependence on oil at current levels.

Less obvious but possibly more important is the conduct of foreign policy. Obama had a fully staffed State Department, and he understood the subtleties of diplomacy. While he was president, OPEC was knocked off balance, and it became harder for them to commit to unified actions to control the global market for oil. Perhaps it is just a coincidence, but Trump believes the State Department is wasteful, and he has deliberately left many key positions unfilled. He also appointed as Secretary of State former oil executive Rex Tillerson. Tillerson knows that more expensive oil globally means increased profits for companies like the one he used to lead. Just recently, OPEC seems to have recovered their balance: their recent agreement to lower production quotas has been the main driver behind the recent rise in oil prices.

There is one other driver to consider, and that is the Republican tax plan. Tax cuts and credits for the working poor and the middle class translate to consumer spending. But when you have all the money you need already, a big tax cut allows you to put more away for the purchase of stocks and more speculative investments. One of those speculative investments is oil futures. The price of oil on world markets includes a speculative premium. By that, I mean that investors buy oil futures, and those purchases translate into higher prices at the gas pump than you and I would otherwise pay. In normal times, this speculative premium is modest, and the sale of futures helps to stabilize prices. But now the Republican tax plan threatens to provide oil speculators with additional funds to play the futures market. No one wants to miss the party, and we have seen that other trends are favorable, so the speculative premium for oil is increasing in anticipation of the Trump tax cuts. This is true even if the tax cuts do not ultimately pass, because speculators do not want to wait to take their positions until the tax bill is law, for fear of missing the profits to be had in the meantime.

So I expect that oil prices will at least remain at their current elevated levels, and possibly go higher still from here. That will put pressure on consumer spending, as would any cuts to safety net programs that Republicans manage to pass. Eventually, even Wall Street will notice, and with stock prices already high by most historical measures, that won’t be pretty. It is notoriously difficult to predict the timing of the stock market, and I failed badly last December. So I will simply leave you with this meditation on oil, and a song about oil prices from forty years ago:

Monday, November 6, 2017

The Road to Impeachment

I have friends who have been calling for the impeachment of Donald Trump since the day he was elected. As a practical matter, impeachment would generally require a president to take office, and then commit an impeachable offense, in that order. Still, I share the sentiment. This is a man who settled fraud charges against himself out of court in December, without admitting wrongdoing, but still. This is also a man who had a twenty year old rape charge disappear when his accuser once again dropped the case when faced with new death threats. So I have believed since Election Day that Trump could not possibly finish his first term. He has a long history of contempt for our laws, suggesting that he is simply incapable of behaving as if they apply to him. He regards out of court settlements not as penalties for wrongdoing, but simply as costs of doing business. Having said all of that, there was still a certain sequence of events that would be needed to actually get us to an impeachment. The first of those events finally happened this week. Robert Mueller unveiled criminal charges against those in Trump’s orbit. So what has to happen to get us from here to the end of the Trump presidency?

First, let’s talk about the charges that were brought, and why. Paul Manafort and Rick Davis grabbed the headlines at first. They were jointly charged in an elaborate scheme that involved secretly working for foreign actors, and collaborating with them on a plan to evade paying US taxes on the income gained. That last bit, the collaboration with foreign actors to evade income tax, is the basis for the charge of conspiracy against the United States. The charge sounds spectacular, but it is a much lesser charge than treason, which is not indicated here. Trump was right when he said that there was nothing in these charges about collusion regarding the election, and that the events that gave rise to these charges began long before the campaign began. Any normal campaign would have discovered much of this, and never brought Manafort aboard, but a lack of proper vetting is not an impeachable offense. But here we should also remember that Al Capone finally went to jail for tax evasion. So the charges against Manafort and Davis that were filed this week do not tell us that they did not collude regarding the election; instead, they mean that these are the crimes Mueller feels he has enough evidence of to gain convictions. The plan now is to use a plea bargain process to get Davis, and especially Manafort, to testify about what they know. These are also just the federal crimes that Manafort and Davis may have committed, and Trump can only pardon potential federal offenses. Mueller is saving plenty of potential crimes for charges especially in New York State, in case Trump tries to protect his people with a pardon. Even so, Monday was not free of collusion. Later, Mueller revealed a guilty plea from George Papadopoulis. The charge here is lying to investigators, but the substance of the lies had to do with a Russian offer to provide the Trump campaign with dirt on Hillary Clinton. Papadopoulis is cooperating with investigators, and what we know so far could form the basis of perjury charges against Jeff Sessions.

That’s how it is done. When Richard Nixon resigned rather than face impeachment, it was after months of watching associates being arrested, and turning state’s witness. We are only at the beginning of that process now, but it has begun, and there is every reason to think it will go further, involving people closer and closer to Trump’s direct orbit. Trump foolishly repeated his attempted command that Mueller must not investigate Trump’s business and financial dealings; this only serves to make the public wonder what we will find there. So the legal and investigative steps that could lead to impeachment are well under way. But more is needed.

Impeachment is the bringing of charges by the House of Reprsentatives, and the charges are then tried by the Senate. The Senate must vote to convict with a two thirds majority. The strongest possible criminal case must be backed up with a political climate that makes impeachment possible and successful. That climate is not in place now. Based on what we know now, the House as currently constituted is more interested in protecting Trump than impeaching him. Even if they did, there are not the votes in the Senate to convict. The impeachment of Bill Clinton was a sham trial, because the Republicans who brought it knew they could not get the votes to convict in the Senate. To get to impeachment as the evidence against Trump accumulates, we will also need changes in the political environment. We may well need the Republicans to lose a significant number of seats in both the House and the Senate in next year’s election. But even if that happens, we will still need to convince many Republicans that we the people will punish them for a failure to bring Donald Trump to justice. We must convince them that loyalty to a corrupt president from their own party will cost them enough votes to cost them their seats. We must make them choose between party loyalty and the good of the nation.

In order to force that choice, we must vote, and it can matter if we start doing so this coming Tuesday. If we make sure we go to the polls in large numbers in this odd year election, and we make sure that every possible member of the Republican Party is defeated, that would send a powerful message. For many years, the Republicans in general, and the Tea Party movement in particular, have been able to count on us staying home in off year elections. They have encouraged the idea that the two parties are the same, that your vote does not matter, and you have helped them immensely if you believed it. But, in direct contradiction to that, these same people have worked hard to create new obstacles to voting, especially for minorities who lean heavily Democratic. Clearly, your vote must make a difference, and your party preference must matter as well, if they are willing to work this hard to keep you home. So Tuesday’s election is mostly for local offices. Maybe there is someone you have known all your life and liked, maybe even given your trust to, and this year he is running for the proverbial dog catcher position as a Republican. Sorry, but we must make sure his Democratic opponent wins. If you are lucky enough to live in a place where an independent can win, more power to you, but please be careful with this one. The important thing is, this election can be a powerful rejection of the current path of the Republican Party, but only if we show up, and turn any and all Republicans out or away. That is how we can convince sitting Republicans in Washington to walk the road to impeachment with us.

I’m cheating a bit this week with my song choice, in order to share an old favorite. Only the title of the song really has anything to do with my subject. You may know The Road from Jackson Browne’s version, which is well worth hearing if you haven’t. But this is the original version, by an artist who deserves to be better known, Danny O’Keefe:

Monday, October 30, 2017

Truth is Relative

There can really only be one topic here this week. Jeff Flake gave his retirement speech, and became a new Republican hero. Don’t get me wrong; it was a great speech, well worth reading in its entirety. But the reaction to it in the press misses some very important points. This is Jeff Flake, people. Flake was elected courtesy of the Tea Party movement, so it is horrifying that he has found someone too extreme for his liking. But he delivered this speech, and then voted later that night to outlaw class action suits against financial institutions. Flake has voted for each and every one of the horrible healthcare proposals his party has put out there. So his speech is not a clarion call for policy change in Washington, as so many in the media would have it. John McCain at least helped torpedo the healthcare atrocities with no votes, although he too was upset by process, not policy. Flake deplores the dangerous extremism of the president, but Flake himself was the dangerous extremist when he first came to Washington.

You read that right. We have now have a president whose extremism is shocking and deplorable to a Tea Party stalwart. It has gotten so bad that a Jeff Flake is on the verge of realizing that Mitch McConnell has brought the Republican Party to this point with his stratagems to exclude the Democrats from governance, even when they were the Party in power. But Flake focuses his criticisms on the president, and it is easy to miss his comments about how things are being done in the Senate. Flake calls for a return to “shared facts”, but he has relied throughout his career on only those facts that suited him. He can not see the essential fallacies of supply side economics, and he invokes faith and moral authority in his speech, not the Constitution and established law. On Social issues like abortion and gay rights, it appears to be Trump who has come around to Flake’s point of view.

Where Flake differs from Donald Trump is not in matters of policy, except regarding trade and immigration. Their economic agendas are largely simpatico, and I would expect Flake to be a reliable vote on tax cuts for the rich, for example. The big difference and point of contention is their goals. Trump has pushed his Party toward the Steve Bannon world view. Where Flake believes that the government should exist to help the wealthy produce more wealth, Bannon believes that the government has failed. It must be destroyed, so that something better can be built in its place. While it is not entirely clear what this new better world would look like, it appears to involve reasserting the supremacy of white Christian males, and putting everyone else in their place. Along the way, however, many of the same policies apply. Both Flake and Bannon seek to completely dismantle the safety net. Flake sees programs like Medicare and Social Security as unfair burdens on the wealthy, while the Bannon wing of the Party sees them as handouts to “them”. They are also simpatico on social issues, but Flake sees a moral imperative where Bannon sees government intrusion.

Flake, to his credit, does feel that the United States has an important role to play in world affairs, where Bannon does not. Flake refers to the United States as “the architects of this visionary rules-based world order,” which implies that we should be the ones making the rules, even though he praises our policy of reconstruction after World War II. But the meaning of Flake’s speech changes greatly when you consider the speaker. This is not a shaming of the Republican Party for the harm their policies will do to the people who elected them. This is not a sudden conversion to progressivism from one of the most conservative members of the Senate. No, this is simply a call for a return of responsible governance, from a man who believes his policy positions are correct. Flake feels that, if the Republicans were to return to normal governance, their ideas would prevail simply on their merits. He believes that “shared facts” will bear him out. I think the results would be otherwise, but I applaud Flake for being willing to risk that. In the context of politics as it is being practiced in 2017, it was a brave speech. It would have been braver if it had been made by a man who was willing to stand for reelection after giving it. But that is a lot to ask. It falls to the general public and the people of Alabama in particular to stand up to the wrongness of our country, and reject the Bannon- approved candidates running in 2018. Jeff Flake has signaled that he does not have it in him to take on that job. and I don’t blame him for that.

So the short answer is that Flake’s speech is something of an illusion. Hence, this week’s song:

Monday, October 23, 2017

Tax Fraud

I have discussed before how Donald Trump and his allies use marketing techniques to sell us programs we would be better off without. I have also discussed how we should be marketing our own agenda. Up to now, I have confined these discussions mainly to the subject of healthcare. But now it is time to look at “tax reform”. When you say those words, it sounds like you want a new system of assigning taxes that is fairer for everyone. You want to ease the burden on regular people, and get the rich and corporations to pay their fair share. You want a system that collects enough overall to fund a robust set of government programs that benefit everyone, but you want to do it without squeezing the poor or the middle class. The current “tax reform” proposal that Trump has put forth and the Republicans are trying to enact fails every one of these tests, miserably. They sell it with a lie they may even believe: that giving as much money as possible to the rich and corporations will put that money into the economy and thereby create jobs. In fact, the experience of the Bush tax cuts, as well as the results of similar programs in other countries, shows us that this money would instead bolster the stock market and also free up funds for more speculative investments. There is a word for a time when the performance of the financial markets becomes divorced from the economic realities of the poor and the middle class: a bubble. It ends in a collapse, with the financial crisis of 2008 being a recent, dramatic example.

So what would real tax reform look like? I have a proposal for corporate taxes that illustrates this, and also how we could sell it. At the moment, it is generally agreed that our corporate tax system is unduly complex. It puts a burden on our corporations in terms of record keeping and preparation. The system is riddled with loopholes that allow highly profitable companies to dodge their responsibilities, and pay little or no taxes. I have a solution that simplifies corporate accounting, reduces fraud, discourages the use of tax shelters and foreign tax dodges, and increases the overall revenue in corporate taxes paid to the government. It involves eliminating the requirement for corporations to file tax returns at all.

Wait, what? Hear me out. Our system now requires corporations to file a tax return with the IRS, and it is considered in a vacuum. No other evidence of the financial condition is considered, which allows for all manner of schemes to dodge paying taxes. But the government already collects other information on the financial condition of our corporations. Players in the stock market eagerly await quarterly earnings reports from companies, and those are followed a few weeks later by the filing with the SEC of the form 10Q. So let’s simply use the 10Q as the basis for corporate income tax. Do you want to use a foreign country to shelter your income from taxation? Fine, but you don’t get to report that money as earnings. Do want to follow in the footsteps of Enron, and artificially inflate your earnings with “creative accounting”? Fine, but you have to pay more taxes as a result. So using the 10Q for taxes should provide powerful incentives to discourage tax sheltering on one side of the ledger, and accounting fraud on the other. It reduces the burden on corporations by simplifying reporting. And, since no company wants to report zero or negative earnings to their shareholders, this proposal would encourage companies to pay their fair share of taxes.

As with healthcare, the best way to expose the Republican tax plan for the cynical fraud that it is is to put forward a true tax reform proposal for comparison. This can be the start of that plan. Let the experts score this plan, and provide an estimate of how much additional tax corporations will pay. Then propose using that money to relieve the tax burden on the middle class and provide additional relief for the working poor. Unlike the current proposal, this one is revenue neutral, meaning no budget cuts to popular programs are needed to pay for it. There also does not have to be an explosion of the deficit, such as the one the Bush tax cuts produced. By actually putting a meaningful amount of money in the hands of people who will spend it, this plan stimulates the economy where the Republican plan does not. So let’s put this out there, and watch the Republicans squirm as they try to explain why their plan would be better.

This week’s song is not one of Robert Cray’s best lyrics, but it does express the frustration ordinary people feel with our tax system. It also has some very tasty playing by the whole band:

Monday, October 9, 2017

Commas and Periods

I wrote most of a perfectly good post last week, and then set it aside for some finishing touches. Before I could get to those, however, Las Vegas happened. This past week has seen the usual outpouring of articles on gun violence in America. “The usual…”. How it pains and disgusts me to write those words on this topic! Each time one of these senseless tragedies occurs, the Republicans line up to do the bidding of the gun lobby with the ritual parroting of the same tired excuses for why there is nothing to be done, and each time I make the same observation: if he had only been armed with a knife, a lot of lives would not have been wasted, and a lot of people would not have been injured. So let’s talk about the Second Amendment.

The mad disciples of Wayne LaPierre love to misquote it as:

“The right of the people to keep and bear Arms shall not be infringed.”
They even got the Supreme Court to accept this text as the true one in the Heller decision in 2008. But the actual text in full reads:
“A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.”
It makes a big difference, but it also scans for the modern reader as so much gobbledygook. The placement of the commas is particularly bizarre. But the extra words and clauses are important to our understanding of what was intended. So is the study of the history of the period in which it was written.

The founding fathers did not intend to establish any individual right to own weapons, and certainly not stockpiles of the types of military weapons we find in too many cases today. The right to bear arms was deliberately limited to the context of “a well regulated militia”. The clause about “a free state” tells us more. The Constitution was born in a highly contentious meeting, and ratification was only possible because an agreement was made that several points of conflict would be resolved later. That later resolution became the Bill of Rights. Keep in mind that the whole point of the Constitution was to establish a single nation from what had been thirteen semi-autonomous colonies under British rule. The new states did not want to give up that autonomy, so the Constitution devotes a lot of attention to the rights of the individual states. The Second Amendment is a continuation of that theme. In historical context, it established that there would be no national army in peacetime; instead, each state would maintain “a well regulated militia”, and these state militias would be welded together into a national army only when the entire nation was threatened with war. To the modern mind, this is a bizarre and unworkable arrangement, but to the founding fathers, it meant that the national government could not impose its will on the individual states by military means. That was vital to obtaining the cooperation of the new southern states, who feared that a national army would be used to impose an end to slavery.

Technology has rendered all of this obsolete. The weaponry we need today to pose a credible threat to other nations can only be built and managed on a national scale. Even the most avid gun rights supporter is not calling for the individual states to have tanks and military aircraft, and certainly not nuclear weapons. And just as certainly, no one has said that the Second Amendment guarantees any personal right to such an arsenal. In fact, a national army did impose the end of slavery 150 years ago. So I find it hard to avoid the conclusion that the Second Amendment should be repealed. Politically, that would be impossible without a replacement that makes individual gun ownership a right, but that is the conversation we should be having, instead of how to twist the founding father's intentions to fit a twenty-first century agenda.

Let’s start by agreeing that state militias with the military technology necessary to defy the national government are not the goal. Let’s also remind ourselves that we all understand that cars are dangerous. For that reason, we have enshrined in our laws that owning and operating a car is a privilege that comes with legal responsibilities. State laws vary, but broadly we expect and accept that a person must demonstrate that they understand the laws that govern the use of a car, that they have completed training that allows them to operate it safely, and that they maintain it in a safe working condition. We also assign legal responsibility for any harm that comes from operating a car. And we assume that a person must be mature enough to operate a car. In our laws governing alcohol, we further assign liability to an adult who allows or encourages the use of alcohol by a minor. All of this should apply to guns as well.

Then there is the question of which guns to allow, and how many. I personally do not feel comfortable with the idea of owning any guns, but that is my personal decision. It is also a reflection of what might be called rural privilege: I live in a small town where I feel safe, and I do not feel that I need to defend myself. It seems to me that self defense is the key. Any provision that allows a person to arm themselves with weapons that suffice for their personal defense and the defense of their loved ones should also be sufficient for hunting. So the question then becomes, defend themselves from what? If you believe that you will have to personally fight off a horde of well armed and trained terrorists, or a raid from US government agents, you need much more powerful weaponry than if you believe the greatest threat you face is a group of three armed intruders in your home. But the terrorist and government agent scenarios are simply fantasies promoted in our popular media. In Las Vegas, there were plenty of “good guys with guns” among the bands performing, but they realized that drawing their weapons in that situation would have only increased the confusion of the situation, thereby making it more dangerous rather than less. Even in a war, highly trained soldiers can miss and inadvertently claim the lives of innocent civilians, so no one can assume that they would only hit their intended target in the heat of the moment.

From all of this, we can formulate a new Second Amendment that would modernize and clarify the rights and limits of gun ownership. It might read something like this:

The right of individuals to own and bear arms shall be recognized, but Congress and the states shall have the responsibility to regulate their nature and use in the name of public safety and the greater good.
The final language would be worked out by constitutional lawyers, but it must strike this balance. People should be allowed to have their guns, but government bodies should have the obligation to regulate them in sensible ways. Balance is something that has been hard to find in discussions about guns, but we will not make progress without it.

Let me leave you with some questions that may help someone who believes in gun regulation have a calm conversation with someone who owns guns. What kind of gun do you own? How did you learn to use it? If you have it for self defense, what kinds of threats do you believe you might need it for? I am not opposed to self defense. I think we should work to end rape culture, but until that happens, I would support any girl who wants to learn karate, for example. I believe that a majority of gun owners would like to have a national conversation about gun control, but they must feel that we are not judging them when we bring up the subject. I hope some of the ideas I have discussed here can help us have that conversation.

I could have chosen any number of songs that relate to guns this week. Some of those would be in poor taste in light of the Las Vegas tragedy. Others present a strong opinion, and would serve to block conversation, rather than encourage it. So I have chosen instead a song about conversational gambits to avoid: