Category Archives: The Economy

The Twenty-Five Year Depression – Yikes!

People have been posting doomsday articles on my Facebook page… so delightful. Not. With the world so twitchy and insecure, with change on the world menu wherever we look, it is not at all hard to believe that some catastrophic event could turn us into the newest extinct critters at any moment.

Our natural disasters seem epic in scale ever since Katrina destroyed an old, established and well-loved city and half of the Gulf Coast; ever since the horrific scenes we witnessed in Haiti. The tsunami near the Fukushima Daiichi nuclear reactor in Japan was destructive on a scope we have not experienced in our lifetimes, the storms that have hit in the South Pacific (Australia and the Philippines) caused get damage, and just last week two plates crunched together and almost wiped out an enormous swath of Nepal, killing people in numbers we equate only with nuclear disaster. The tsunami that preceded the Japanese tsunami and temporarily erased Sri Lanka and neighboring nations also killed many people, both natives and tourists. The forces unleashed seem enormous and that makes us worry that something more damaging and all-encompassing will happen at any moment.

In 2008, when the housing bubble burst, we felt a shudder of fear run through America, and indeed, much of the world. We knew that with the exodus of our factories the American economy was already having difficulties with full employment. Our unemployment rates were too high, especially among the poor and the middle class. Austerity loomed and only the polarization of our Federal government, which made bipartisan agreement on anything quite unlikely, probably protected us from strict belt-tightening measures. We are pleased that there has been a modicum of recovery, but we are nervous about how many Americans lives have still not found an acceptable degree of individual prosperity or opportunity. We are all aware that a few people around the world have cornered most of the world’s wealth and that they intend to protect it and, basically, hoard it.

So amidst the omens and worries of our new existence come these guys who I am sure have plenty of money. They tell us how nervous they are that they will lose all they have. They tell us that the dollar is no longer a secure currency and they predict that within 6 months we could find ourselves in a 25 year long depression. They write articles about what currencies are safe havens for your wealth. What are those of us with no wealth to think? We have mortgages and credit card bills and car payments. Our money already seems practically useless.

One of these prognosticators is Mr. Rickards who works for the government as an expert in asymmetrical warfare, whatever that is. He has written a book with the subtle title The Death of Money. Of course, we are instantly alerted to the possibility that the word ‘charlatan’ may have relevance here. But a little wedge of our brain keeps whispering that he may know what he is talking about. This stuff is still classified as “conspiracy theory” and “doomsday” nonsense by most. In fact, Rickards project is called The Prophecy Project, not a title that appeals to sane folks who usually don’t pay attention to data from the supernatural realm.

So I give you here the links. Read what these “experts” have to say and make your own decision. It is highly unlikely that we can do any kinds of survivalist crap that will keep us going through a quarter of a century. If money is useless, I doubt that most of us can convert our money to safe haven currencies. I doubt we will be able to hang on to our housing or find a way to produce the energy necessary to maintaining a comfortable lifestyle. In other words, most of us are screwed. It is difficult to understand why these guys would bother to post to hoi polloi on Facebook. Perhaps they are hoping to foment panic so that their predictions will come to pass and increase their wealth and their reputation before we all subside into anarchy. No sense losing sleep over this is what I say. And then I hope I am right.

By Nancy Brisson


The War of the Worlds

Everyone is so critical of Obama, but I find the things he says very reasonable and I just don’t understand the animosity he arouses (unless it is racist). He gave a speech today about America’s path to a solid economic future which contained nothing in the least objectionable. He believes that America will lose the character and philosophical underpinnings that make America a unique nation if we allow all of the wealth of the nation to become concentrated in the hands of a few Americans while the economic health of the middle class continues to decline. He spoke about how we are a nation that relies on consumerism to thrive and that in order to preserve our place among the nations of the world and continue to be competitive we must have a prosperous middle class. He tried to take the long view and think about what we need to do to keep America at the top of the global economy. He reminds us that the middle class is not necessarily feeling the recent recovery that is happening in other areas of the economy. And he believes that if we don’t do what we need to do to boost the middle class we will end up a backwater nation in the global culture that is coming.

Obama did not tick off any agenda items for America that are in any way bizarre or unusual. If the Republicans were not so determined to hate him they would have to admit that these are the areas that need improvement to guarantee the health of the middle class and of America. It is possible that we could find some ways to make our nation’s success less dependent on consumerism and that this might change the urgency to develop some of these areas but Obama did not suggest any changes in our national values that would turn us into a less consumer-oriented culture. He seems to believe that the consumerism of the middle class is exactly what is needed to keep America ticking along.

He recommended concentrating on education and training (once again mentioning the importance of preschool). He recommended spending on infrastructure. He listed the necessity of continuing to look for alternative energy sources, and the need for businesses to offer higher wages and benefits, especially given recent attacks on labor unions. Not once did Obama mention an urgent need to cut the debt and the deficit or the need to do away with the social safety net or to make government really, really small. He did mention that if we worked together we could find ways to cut programs that are not working and to streamline the social safety net programs so that we would not have to plan to ignore the poor and the disabled. He feels that we will come to value the Affordable Care Act because it ends the absolute control the insurance companies had over health care that allowed them to refuse to cover people with preexisting conditions, and because it offers insurance for young people who often can’t afford it, and it covers people who have been too poor to have insurance.  He reminded us that we have never been an “it’s all about me” nation, but have always believed that we have a duty to lift up those who are less fortunate than us. He did not believe that we would ever want to become that totally “me” focused nation. I just don’t understand how anyone can object to this agenda.

What I hear news commentators saying is that Obama cannot deliver any of these things he is talking about but Obama admitted that he is not running for any other office, and that he is taking a long view. At the end of those 1276 days he will be 44 and he should be set for life. He will still be an American though and as an America he will not want to watch America be satisfied with a place at the edge of the global market place. He is not sure what will be accomplished over the next 1276 days, but he believes that this makes a great long term agenda for America and he hopes that future governments will build on these areas and that the people will help offer creative approaches that allow us to do this.

How will we fight our way out from under the strident insistence of the Right that we need to have all private schools funded by vouchers, we need vouchers for health care, and we need to cut all other social programs, although they do express some distaste at cutting loose old folks (perhaps thinking of their grandparents, you know). They do seem to think that old people are retiring too soon and that they need to work longer, that they are relying on the government to take care of them in their years and are therefore not saving and planning ahead. They really want to cut loose the poor and those who they feel are freeloaders and let them make a greater effort to make something of themselves. They believe that the churches will pitch in and take care of the poor and the disabled and the addicted and the aged as they did (very ineffectively) before we had a social safety net. Many of our churches are limping along as it is and are probably aghast at the prospect of being called on to provide the millions of services we are talking about. It is not realistic.

I do not see the American people gathering together to help restore health to the middle class or to talk about whether they really think voting to repeal health care 38 times and overturning Roe v. Wade and not paying America’s debts and getting rid of labor unions (especially for teachers) and closing the IRS but still collecting taxes are things that will improve the health of America. Even if some people want to repeal health care, end abortions and refuse to pay debts, I assume they are not the highest priority items on their list, and yet they are priorities for Conservatives. Perhaps wealthy Americans plan to take their money out of America and no longer pay any taxes to the nation and they are just preparing us for the inevitable. Can we afford the social safety net without them? We certainly can’t right now given the economic loses the middle class has suffered.  Someone needs to draw a word picture of what America will be like if we follow the agenda of those on the Right. I don’t think that country will in any way resemble the America we know and love.

After watching Rachel Maddow last night I guess we will get a preview, a peek of this Conservative nirvana if we keep an eye on North Carolina, a state with a Republican majority in all branches of its government, a state which is passing some unusual laws such as, all seventh graders will have to be taught that if they have an abortion they will not be able to have any more babies, and all millionaires will receive a $10,000 check. Now just take a moment to roll your eyes and say “what?”

An Endless Republican Loop



I feel like we are caught in a time warp or an endless loop. The Republicans have been giving us the same message over and over for the past four years and even though the American people voted against their plan they insist that Obama come to meet them when they should be offering to go to meet him. Their only message, offered to every commentator every time they are interviewed is about the need to cut spending, balance the budget, and get rid of the deficit. They always act as if Obama is a spendthrift who passes out money to everyone and pays no attention to the nation’s debt or its deficit. They are changing their message slightly because instead of expressing a desire to privatize everything, and to cut entitlements, they are focusing, for now, on Medicare. Health care costs are rising at an alarming rate and I am sure we all worry about whether Medicare will continue to be available. But it is very interesting that the party that wants small government is always talking about cutting our benefits. That is all they seem willing to cut. They never suggest cuts in any other programs or departments of government. They offer to revise the 70,000 page tax code, but again they rarely give us any specifics.

There are several economists who admit that avoiding austerity has actually helped the American economy. And although all of us are unhappy with huge national debts and deficits, some economists suggest that they are not that enormous given the recession we just came through. Paul Krugman, an economist who writes in the New York Times calls the Republicans “deficit scolds” with good reason because that seems to be their sole argument, repeated ad nauseum.

 I also do believe that Obama fully intends to make some cuts in spending, but I know he would also like to do some spending because he thinks it would help create jobs. Paul Ryan who appeared on Meet the Press this Sunday repeated the same alarmist message that we have heard from him before. He intimates through his arguments that Obama is ruining the American economy and that Obama is a stubborn idiot who needs to be saved by the Republican agenda. He still worries that we have created an “institutionalized” group of inner city minorities who lack initiative because they have been supported by the government for too long. I don’t think the financial support they get or the rigmarole they must go through to get that support really produces a living income or a satisfying lifestyle. I would think that a focus on educational models that help people succeed in school would be more useful than some “throw them in the deep end and see if they swim” strategy.

The Republicans do have some plans for how to become a more popular political party. They have decided to go after the minority vote by working with Democrats on immigration. They have decided that the only reason Obama won was by pandering to minorities so they want to get in on some of that pandering action. However, just in case Spanish and African Americans see through this courtship and decide they will not be wooed, Republicans want to change the way electoral votes are counted. Because big cities tend to skew Democratic and more rural areas tend to skew Republican.  Presidential candidates often win all the electoral votes in a state if they win the major cities. The GOP has come up with a plan to go district by district to count the vote and then to apportion the electoral votes in the state by the numbers of districts won, instead of the number of votes won. If a candidate won the popular vote s/he would not necessarily get all of that state’s electoral votes.  Electoral votes would be split among the candidates. If we had run the 2012 election Mitt Romney would have won the Presidency even though Obama won the popular vote, experts say. Why isn’t this the perfect time to get rid of the elitist Electoral College and decide the election by the popular vote alone?

Last week John Boehner accused Obama of trying to get rid of the Republican Party. Why would Obama bother when the Republicans are doing such a great job of sabotaging themselves? They are committing political seppuku.We are not a single party nation and I don’t believe we really want to be, but if the Republicans can’t moderate their agenda I, for one, would be just as happy to see them sidelined until they stop trying to dictate a path that Americans did not choose and do not want, for some very obvious reasons.

This is the view from the cheap seats.

This photo is from an article on Thank you Yahoo.

Should We Go Off the Cliff: The Rationale

Many economists and others believe that we should do only the things we must to avoid sequestration and that we should raise taxes on the wealthy and we should deal with some of the tax loopholes and raise the debt ceiling, but we really need to do more right away in stimulating growth in the economy through doing what is necessary to make more jobs available, more jobs that pay a living wage and have a path to advancement, and we need to tackle infrastructure and education.

From Huffington Post:

So, the big takeaway is that we should never do this again? Should we trust Congress when they say they will meet in a committee to draw up substantial spending cuts? Going forward, it’s going to be hard to do so. The good news, however, is that if we can avoid the nonsensical level of fiscal austerity that the sequestration is threatening, Congress can start work on a more critical, near-term project that I like to call “ameliorating the negative effects of that gigantic financial collapse that happened four years ago.” Getting the long-term budget trajectory in line is something that can be safely put off until after we’ve solved the unemployment and foreclosure crisis, and we’ll have already gotten a good head-start on that once the Clinton-era tax rate levels on upper-income earners are restored. This is what the American people want Congress to do anyway — as usual, they do not give a tinned turd about the deficit.

Jason Linkins, author

From The Examiner:

“In August 2011, bipartisan majorities in both the House and Senate voted for the threat
of sequestration as a mechanism to force Congress to act on further deficit reduction. The specter of harmful across-the-board cuts to defense and nondefense programs was intended to drive both sides to compromise. The sequestration itself was never intended to be implemented. The Administration strongly believes that sequestration is bad policy, and that Congress can and should take action to avoid it by passing a comprehensive and balanced deficit reduction package.

As the Administration has made clear, no amount of planning can mitigate the effect of these cuts. Sequestration is a blunt and indiscriminate instrument. It is not the responsible way for our Nation to achieve deficit reduction. The President has already presented two proposals for balanced and comprehensive deficit reduction. It is time for Congress to act. Members of Congress should work together to produce a balanced plan that achieves at least the level of deficit reduction agreed to in the BCA that the President can sign to avoid sequestration.”

When it comes to non-defense spending cuts, they will be wide-spread as the law requires. Medicare will be cut 2% which is the maximum the law allows Medicare to be cut. Other mandatory qualification-based domestic programs like Medicaid, Food Stamps, etc will be cut 7.6%.

Domestic discretionary programs such as scientific grants and Education Department programs will be subject to 8.2% cuts across the board. Congress and the White House also get their budgets cut. Pell grants, food safety, the FAA, FEMA, farm programs also get cut 8.2%. These cuts will hit nearly every agency of government.

Most people when asked are for spending cuts at least until the cuts affect a program they like or use. Then, the attitude changes. Cut everything else, leave my program alone.” When everyone says that, nothing gets cut. That is why we have the debt.

The problem with this plan, however, is two-fold. First, the cuts are not strategic. They are not based on the cost-effectiveness of a program. They are across the board.

Secondly, economists warn that austerity at this point in the recovery would cut GDP, slow the recovery, or perhaps send us back into recession. An average cut of 8.2% in federal salaries alone will mean tremendous layoffs. So will cuts by defense contractors. That will raise the unemployment rate, hurt consumer spending, stifle small business, and throw ice on the recovery.

Despite the severity of the problem, nothing will happen until after the election—if then.

Meanwhile, taxpayers are paying the salaries, expenses, and medical plans for Congress to do-nothing.

From The New York Times for November 26th, 2012 here is what Paul Krugman has to say:

But the deficit scolds aren’t giving up. Now yet another organization, Fix the Debt, is campaigning for cuts to Social Security and Medicare, even while making lower tax rates a “core principle.” That last part makes no sense in terms of the group’s ostensible mission, but makes perfect sense if you look at the array of big corporations, from Goldman Sachs to the UnitedHealth Group, that are involved in the effort and would benefit from tax cuts. Hey, sacrifice is for the little people.

So should we take this latest push seriously? No — and not just because these people, aside from exhibiting a lot of hypocrisy, have been wrong about everything so far. The truth is that at a fundamental level the crisis story they’re trying to sell doesn’t make sense.

You’ve heard the story many times: Supposedly, any day now investors will lose faith in America’s ability to come to grips with its budget failures. When they do, there will be a run on Treasury bonds, interest rates will spike, and the U.S. economy will plunge back into recession.

This sounds plausible to many people, because it’s roughly speaking what happened to Greece. But we’re not Greece, and it’s almost impossible to see how this could actually happen to a country in our situation.

He has more to say. You can find his article at this link:

I think many of us are perplexed by the complexity of the issues involved in dealing with all of these things at one time:  decide what to do about taxes, decide what to do about budget cuts, decide what to do about the debt, decide what to do about the deficit, decide what to do about tax loopholes, decide whether or not to simplify the tax code, decide how best to stimulate job growth, decide what to do about “entitlements”, and make sure we keep inflation low while we tackle and solve all these issues. Solve them? That could take several lifetimes. Pick a direction and see how it works while keeping in mind that we may have to try something else? That’s probably more like it. Why are we trying to accomplish all of these things at once. 
Let’s deal with one or two things at a time. Raise the debt ceiling and raise top tax rates. Just do it! Make some careful cuts but leave “entitlements” alone for now. Tackle education and infrastructure to help grow jobs, but make sure to chose projects that really will help. In terms of education spend money to train people for those jobs that are going unfilled. In terms of infrastructure look at how to get the most bang for our buck. What parts of our infrastructure will help jobs or trade or business. If we have solved the problem of the water resources in Nebraska build that Keystone Pipeline the Republicans want so much. Then make some more cuts and begin work on “entitlements” only if necessary.
Doing this all of the things we need to do at one time is huge and it is like trying to straighten out a giant pretzel. Oh, but I forgot, the whole idea is just to obfuscate the process by focusing everywhere but the taking care of budget business. We may have to take to the streets on this one. Get your signs ready!   (My view represents the view from the cheap seats.) 





The 53% vs the 47%

When Mitt Romney tells his country club friends that 47% of Americans don’t pay taxes and that they are victims because of their dependence on government is he really talking campaign strategy? Yes and no. Or that new word, nyes, nyes, nyes. It makes a certain nasty sense. Why try to sell yourself as a candidate to people if they will not vote for you? Romney says that those who pay no taxes and collect all the “entitlements” are on the gravy train and they know Republicans intend to derail the gravy train and send all their “taker” asses out on the mean streets of America to make their own way. He actually is saying that all these people have been taking a free ride from the other 53% of tax payers and that the 53% can no longer afford to pay for these “entitlements” and that they will no longer pay for them.

In a sense he is correct, although Republicans insist on counting people on Medicare and Social Security as “takers” even though we were told that these were benefits we paid for, because there is not enough money to make the programs work for much longer. Republicans are selling a much grimmer America. The people Congress once tried to subsidize and protect were the poor, the disabled, the children (especially the children). Seniors were not being cared for, they were taking care of themselves with the help of their government. Now, when money is scarce the GOP says that in order for America to remain a financially viable superpower all the “deadbeats” must be turned loose and the few people who are genuinely needy will be taken care of by not-for-profits or churches. Now we will be inundated with children who don’t have enough and America will enter some Dickensian future.
It is probably true that there are Americans who take advantage of the programs our government offers and who have no intention of going to work unless they actually have to. Do we have any idea how many people are gaming the system? The number is probably higher than the number of examples of voter fraud in this country for which we are being subjected to an elaborate system of voter ID laws. Do we have any idea of how many people have languished so long in the system that they don’t know any other way to live and who will turn into productive citizens only if the system turns them loose? I don’t think we do.
However, I also don’t think any of these things matters. I think the GOP believes that the top earners in this country are done paying for the poor, the disabled, their grandparents and any other people who want to take assistance from the government even though they pay no taxes. The billionaires feel we are hanging onto their coattails and bringing them down. They want to fix the laws in America so that the 53% do not pay for the 47%. And they do not care that seniors thought they were paying their own way because it didn’t work, the program is going broke. Gramma and Grampa better go get a job so they can pay for their health care all over again.
Most of us have some pride and do not want the 53% to take care of us. Some Americans cannot afford to let pride stand in the way of their survival. The reason this is an issue right now is our depressed economy. We need jobs and we need them soon or our government could go broke. When we had jobs that paid better than a living wage we could afford to take care of less fortunate Americans. Without jobs we can’t. But doesn’t the GOP reasoning essentially disenfranchise 47% of Americans because they say they are not paying their way. Apparently we buy the right to be a citizen by paying taxes. America never placed salary requirements on citizenship, at least not since 1776. If you can only be a citizen if you pay into the American government then what will happen to all the people who no longer qualify to be US citizens? What if jobs don’t miraculously appear when you tip everyone off the gravy train?
No matter how true the financial arguments are that are coming out of the Republican camp I cannot embrace their view of an America that is just a profitable corporation. I cannot embrace their view of an America that has no social functions. Instead of settling for an America we won’t recognize let’s have a serious discussion about a combination of cuts and tax increases that will improve the tax balance in America. But it is a sad thing when wealthy people used our government to create laws that favored wealthy Americans and then, when they cornered most of the wealth in the nation, they started to scream like little girls that people were touching their money. It is not just the people at the bottom who will bring America down, the greed at the top plays a big role also.

A Bipartisan Concern – The Tax Code

It sounds like there is one area that both Democrats and Republicans talk about as important and that area is revising the tax code. Everyone seems to agree that the tax code is too complex. What is not clear is if revising the tax code in the ways it really needs to be revised constitutes an increase in taxes. Since Republicans are in thrall to Grover Norquist, they are not allowed to change taxes in any way that Mr Norquist defines as a tax increase. They signed a pledge, which should be unconstitutional, but which apparently is not.
I know very little about the tax code; it is not my area of expertise. But I do know how to read so I asked the internet to tell me what parts of the tax code should be changed. Hardly anyone is very specific in their recommendations. But the internet did lead me to Robert Pozen, a senior lecturer at Harvard Business School and a senior fellow at the Brookings Institution. He wrote an op-ed in The Washington Post on the subject last year on July 19, 2011 entitled A debt plan Republicans can support.
He says, “On the corporate side, Congress could raise $150 billion over 10 years by adopting four measures:
First, Congress should eliminate the $60 billion tax subsidy for producing ethanol.
Second, changing corporate accounting standards from LIFO (last in, first out) to FIFO (first in, first out) would raise $70 billion over 10 years.
Third, Congress could raise $17 billion by taxing ‘carried interest’ earned by investment professionals at ordinary income rates (35%) rather than capital gains rates (15%).
Fourth, Congress should eliminate the allowance for accelerated depreciation of certain capital expenses such as corporate jets. Although this is a rhetorical favorite of Democrats, it would raise only $3 billion over 10 years.
On the individual side, Congress could raise substantial revenue by imposing several limits on the mortgage interest deduction (2nd and additional houses, vacation property, home equity loans, restricting such deductions to mortgages of as much as $500,000 per couple instead of $1million). This could raise $150 billion in revenue over the next decade.
To raise the final $100 billion of revenue, Congress could modify the approach to insurance premiums in the recently passed health care legislation. That legislation imposed a ‘Cadillac’ tax effective 2018 on any insurance company offering health care plans with premiums of more than $27,000 per year. Instead of the ‘Cadillac’ tax Congress could cap the currently unlimited exclusion for employer based health care premiums at $23,000 for families (and $8,500 for singles), effective 2013. For example, a family with health care premiums of $24,000 per year would pay income tax only on the last $1,000.
This cap would have a narrow impact; approximately 80 percent of workers would not be affected. Yet the cap would help constrain health care expenditures by limiting the tax subsidies for the most expensive plans.
I will continue to explore the internet for other suggestion re tax code reforms, but in my preliminary search I didn’t see too many people offering specifics.
Of course when you have one party (the GOP) whose stated goal is to stop the other party (Democrats) from accomplishing anything for as long as our current President is in the White House, then there is no longer any room to discuss tax code revisions or any other economic strategies for that matter. This stance alone should convince every voter that it would not be wise to elect any Republicans in the 2012 election. The reforms to the tax code are something that could be tackled right now to help us avoid that “fiscal cliff” we will hear about almost daily at least until the election and maybe beyond. Will it happen? I doubt it.


Here is what the Republican in my backyard had to say:

“Ok. I read this and it isn’t horrible but you are missing the point. The point isn’t a lack of funding, a need for increased taxes. The problem is the out of control, and increasing spending. Obama’s spending nearly as much as spent for WWII. Further, recent legislation is going to increase the deficit. If all the tax increases proposed here passed, it still won’t touch the deficit. What is coming, is a huge increase in middle class taxes. There is no free ride and the majority of the wealth regardless of what Democrats think, is in the hands of the middle class.”
(He knows I don’t agree with the way Republicans do the math relative to Obama’s spending, but he insists the Republicans did the math correctly.)

No Ordinary Downturn

Whenever anyone mentions jobs lately they always seem to neglect to mention the Great Jobs Migration as if it is long over and no longer significant. Well it is significant in my community and I bet it is in many others. So many people lost great salaries which they can not duplicate because all of our manufacturing jobs are gone.
My city is littered with empty factories. One employer tore down their factory and replaced it with green space – nice – but do you think we can pass by the space without picturing what used to be there. It looms still in the traffic circle; in that green space we still see the ghost of that factory.
Fortunately my city does not have the neighborhoods full of empty homes that can be found in many cities. Of course we have more empty houses in the central city, but that is true of almost every city in America. Our neighborhoods are not empty only because our banker’s did not jump on the wacky mortgage bandwagon. We didn’t have the housing bubble; so no bubble to burst.
We are replacing our factories with other businesses at a fairly glacial pace and the jobs we are opening cannot usually be filled by the workers who lost their positions because there is a skill mismatch. Training programs have just not offered new skill sets appropriate to new tech jobs and these courses are only free while you are actually on unemployment. Once your unemployment income runs out these programs are prohibitively costly. We have not been able to look to state or local governments or even the federal government for assistance with funds for training or even grants for new businesses because of our current financial and political climate.
I just don’t hear people talking about this unique set of circumstances which are unlike previous periods of low employment. They were true recessions resulting from market factors. As the markets recovered the businesses came back. This time we don’t have businesses that are lying low and waiting to come back. This time we have to create new businesses from scratch. However, those holding the investment dollars have no taste for investment right now because these are not low-risk, proven businesses; they are businesses of innovation, testing new technologies and products which may succeed, but may also fail.
If we think we can just wait for jobs to recover as we have in the past we are fooling ourselves. We are floundering because we are not situated to boom yet. We don’t have a clear vision of what businesses will flourish in the future. This picture could snap into focus at any moment. We have hope and we have expectations and we can fall back on our optimism and our spirit of adventure. Some new opportunities will turn up if we keep pushing and trying.
We just need to stop acting like this is your average everyday downturn. Election reporting is especially guilty of acting like these are ordinary times. They keep marveling at the slow pace of the jobs recovery as if they live in cities without empty factories and empty houses. Perhaps they do since they cluster in places like NYC and Washington which don’t resemble mouths full of places where teeth used to be. Let’s be realistic and talk about jobs we could invent instead to acting like we are just waiting around for jobs to appear through some kind of magical thinking.

Stop Nitpicking – Ignore the Triumverate

Obama spoke yesterday, Friday, June 8, 2012 asking Congress to pass a section of the jobs bill related to infrastructure so we were treated to the usual suspects from the GOP pontificating on CNN. We had the entire triumvirate of John Boehner, Mitch McConnell and Eric Cantor (or Paul Ryan – I have a hard time telling them apart), with a distinctly Southern flair, bemoaning everything Obama has ever done since he entered office and everything he has ever wanted to do. They besmirched the stimulus again, predicted that the Affordable Health Care Act will soon go down in flames (which it may indeed do), and renewed, at the risk of fatal tedium, their vows to make sure taxes don’t get raised.
While it is true that Obama can perhaps be faulted for suggesting that the private business sector is healthy, it is certainly healthier than the public business sector which is suffering from difficulties with state and local budgets. At least private business seems to be percolating at a slow boil. Actually the Republicans like to constantly drive home their desire to see business regulations go away, so this also is part of their endless litany.
Then, bizarrely, after their many attacks on the safety net and the “deadbeats” who use it, they promised to save Social Security, Medicare, and Medicaid, to create beaucoup jobs and to pass the “Perfect” Health Care Plan for all Americans.
They must believe we are all deaf, dumb, blind, memory deficient, and nuts. The GOP by itself does not have any answers for America. They are reactionary and they are haters. Don’t believe them and don’t elect them.
None of the petty nitpicking that is going on so far in this election matters. What matters is that we are choosing the future of America on almost every front.
Business – We need jobs, we need business and it would be reassuring to retrofit America so we could live the 50’s again (a more enlightened 50’s, I hope), but I don’t think we can do that. I don’t think Americans can shrink the economy and their wage requirements enough to make doing business in America profitable even if we trash every union in sight. American workers did not chase business away by being greedy and they probably cannot bring it back by working for peanuts. We will have to build new businesses.
Energy – Business is tied to energy. The Republicans feel that if we find and use every drop of oil and coal and gas under the earth’s surface, if we, in a sense, erase the dinosaurs, we will become the factory haven we once were and America will thrive once again. They earnestly believe that ending our dependence on foreign oil is the key to America’s future. Guess what? Democrats believe this too, but they see that if we work around fossil fuels as much as we possibly can, and innovate and invent, we can  end our dependence on foreign oil, but we can do it in a way that will usher in a future that will include energy sources that are not disappearing and that do not pollute (although every positive arrives with some kind of negative in tow). This is why we need to compromise with some drilling, some innovating, and a common picture of the future. We should not want to retrofit America; we should want to reinvent it.
Regulation – Regulation is not helping the American business climate. Both Republicans and Democrats believe that we may have too many regulations on business. What we don’t agree about is how much regulation and which regulations to cut back on. And instead of doing the detailed work of sorting through our current regulations we are grandstanding. Republicans want to get rid of all regulation on business. They know this is unwise, they know the lessons of history as well as the Democrats do, but they still insist that we follow this extreme path. They are desperate to go back to what they see as the only way America will ever be affluent, go back to the 50’s. Why can’t they believe that America can find a way to an affluent future that differs from the past? Is it because it will take too much time and America might fail in the meantime? This is why we need to work together to lessen the stranglehold of regulations on business, if there is one, without just turning the American business scene into the Wild West.
Benefits – Yes when business was thriving we could afford all the benefits we wanted and people paid their workers with benefits instead of salaries. People depended on their benefits and now, in less affluent times, they have become too expensive and businesses have yanked them away, or cut them back. Now the government, without a healthy business sector to back up its prosperity, is finding its benefit promises onerous. This time the entire nation is depending on these benefits. If you yank them away you send Americans into homelessness, illness and perhaps death. If we don’t yank them away you are afraid the American government will go bankrupt and America will never be prosperous again. We either rise together or sink together. We can’t afford an America that only takes care of business and does not take care of people. People are the government. Cut benefits back until times improve, but they are pretty bare bones already so they can’t be cut by much. Getting rid of all our safety net will not bring back business; it will not bring back widespread prosperity. It is short-sighted and mean-spirited.
Environmental concerns – The GOP is in denial about environmental concerns largely because they also see these concerns as chasing away business (do we see a theme here). No American can afford to be anti-business. Business fuels America more than oil, or gas or any other substance we call fuel. But if we destroy our soil, our air and our water it won’t matter if we have businesses. Life will become a deadly grind with no beauty to relieve it. The only businesses we will need then will be ones that create bio-domes we can live under or space ships we can escape in. If we dial back our environmental rules for businesses will they return to do business in America? I doubt it. Are there possibly too many environmental penalties and rules? We could explore that in great detail if we could actually talk to each other.
Immigration – Immigration issues are more complicated to solve because many Americans feel that these issues are affecting American business, but also the very nature of America. Americans don’t want illegal immigrants to compete for jobs right now because these jobs are needed by legal citizens. But there is also the sense that we are at a tipping point when America will no longer be a Caucasian nation. Perhaps we are afraid of retribution from people who have been oppressed and held back. Perhaps we are afraid that only Caucasians understand the America our forefathers created and will strive to maintain it. People worry about immigrants who use America to prosper but do not see it as home. They worry that “home” is somewhere else to these immigrants and that they, if brought into the fold will undermine America. But the real America was always a haven for people from around the world who wanted an opportunity to do better, or who needed to escape oppression. It is too late to “whiten” America without ruining everything America stands for. We do need to sit down and reach an agreement, even if we eventually have to revise it, over what to do about illegal immigrants who are new to America and what to do about illegal immigrants who have been here for decades.
Reproduction – Oddly enough the GOP has chosen this very moment, with so many other issues on the table, to try to win the anti-abortion argument that it so important to so many in their base. There are 7 billion souls on this earth. By 2050 there will be 9 million. Trying to impose 15th century morality from an unpopulated age on a planet that is bursting at the seams is bizarre and atavistic, although we all, I think, admire the Christianity of it. Will we rot in hell if we use birth control? Will we rot in hell if we abort fertilized eggs? We don’t know, but we still all think we might. Do we want to bring unwanted children into an already overpopulated world? Perhaps there is no hell? Perhaps the earth with 9 billion people will be hell. America was founded so that each person in it could answer these questions for themselves. Besides, when we have so much else to do perhaps this issue can be left on the back burner for the moment.
Evolution – Back, back burner, please.
One Political Party – I have a horrible sinking feeling that if we elect a Republican government right now we will become a country with only one political party and that would be devastating. I do not understand the stubborn refusal of the GOP to let any business be taken care of by our government. They have put American in jeopardy with their insistence on a “my way or the highway” approach. We cannot afford to elect any Republicans at this juncture in America history. There are already enough Republicans who are not up for reelection at this time to insure that we will still have two parties. How will we tempt Republicans back from their extreme positions to help do the work of America? I am not sure. Time and failure at the polls might help.

Why the GOP Loves Reagan

It is difficult to remember what things occurred during the term or terms of each of the Presidents, even the ones who were my contemporaries. So when the Republicans started acting like Ronald Reagan was the best thing that ever happened to America (just as LBJ was the worst) I had to do a quick presidential review. I went to Wikipedia, which although not a scholarly choice is pretty trustworthy when it comes to our Presidents and what they have accomplished. I know you could read Wikipedia yourself but I am planning to condense the information and focus the information, because the things the Republicans admire about Ronald Reagan pretty much all have to do with his economics.
Ronald Reagan actually started out as a Democrat. He became a Republican as he got older and his marriage to Nancy Davis, who was already a Republican, cemented the switch in 1962. He had strong feeling against racism, but he had even stronger feelings against communism. Reagan served as the Governor of California in 1966 and again in 1970. He was defeated twice in his run for the Republican presidential nomination in 1968 and 1976. In 1980 Reagan won the nomination and the general election defeating incumbent Jimmy Carter.
In his first term, 1981-1985:
1.       This term began with an assassination attempt by John Hinckley.
2.       Air Traffic Controllers Strike
3.       “Reaganomics” (supply side economics, trickle-down economics)
4.       Lebanon and Operation Urgent Fury (Grenada) 1983
5.       Escalation of the Cold War – Reagan was very worried about communism and its spread. He felt it was truly “evil” and that Russian was an “evil empire”. He had played a role in the McCarthy Hearings on Un-American Activities during his Hollywood years.
In his second term, 1985-1989
1.       War on Drugs
2.       Libya Bombing
3.       Immigration (Amnesty)
4.       Iran-Contra Affair (money from sale of arms to Iran was given to the Contras in Nicaragua, an act outlawed by an act of Congress. Reagan avoided blame, but it hurt his popularity.)
5.       End of Cold War (“tear down this wall” speech) (the Berlin Wall was torn down in November, 1989) – (ironically Ronald Reagan ended up going to the Soviet Union in 1988 and he was treated like a celebrity. He said he no longer considered Russia the “evil empire”).
There were also accomplishments in the judiciary. Reagan said in his 1980 campaign that he would, if given the opportunity, appoint the first female Supreme Court Justice. In his first year in office he was able to nominate Sandra Day O’Conner. He also elevated William Rehnquist to succeed Warren Burger as Chief Justice and named Antonin Scalia. His last nominee who was approved was Anthony Kennedy.
The Republicans love the blow that Reagan struck against the unions when he fired over 11,000 air traffic controllers who did not return to work on August 5, 1981. He replaced them with supervisors and managers until new air traffic controller were trained and ready to work. Republicans, who back a free marketplace with as few regulations as possible have never been fans of labor unions. However it is in the area of economics that the GOP of 2012 seems to be channeling Ronald Reagan. He was a classic Republican in spite of his Democratic roots and he approached the economy in ways that are traditionally Republican. He had some economic issues to face. When Carter left office in 1980 inflation was 12.5%. In the last year that Reagan was in office, 1988, inflation was 4.4%. The highest rates of unemployment during his terms in office were in 1982 (10.8%) and in 1983 (10.4%). His average over eight years was 7.5%. (I do not believe that America was feeling strong effects of globalization or out-sourcing yet.)
Reagan believed that cutting taxes would stimulate the economy, that cuts to the budget and less government would help the economy and that cutting taxes on the wealthiest Americans would bring benefits that would “trickle-down” to the rest of Americans. This is exactly the same agenda which we hear the GOP touting today and it was successful for Reagan. The economy was healthier when he left office although the national debt increased from $997b to $2.82 trillion. It would make sense to repeat a successful economic strategy if the details of the American economy had not changed so much since then.
Reagan had a laissez-faire philosophy and believed he could stimulate the economy with large across the board cuts. He supported returning the US to some sort of gold standard and had Congress appoint a commission to study the possibilities. Reagan subscribed to the economic theories of Arthur Laffer. Reagan promoted tax cuts as potentially stimulating the economy enough to expand the tax base offsetting the revenue loss due to reduced rates of taxation, an effect known as the “Laffer curve”. Because his defense strategy was “peace through strength” and “firm but fair”, America saw a 40% real increase in defense spending between 1981 and 1985. He did not have the “political nirvana” experienced by LBJ. Democrats were in charge of the Congress, but he did not have to battle the extremes of partisanship we have today.
Reagan’s policies proposed that economic growth would occur when marginal tax rates were low enough to spur investment which would lead to increased economic growth and higher employment and wages. Does this belief that tax policies that benefit the wealthy will create a “trickle-down” effect to the poor sound familiar? You betcha. This belief has been encased in the concrete of the GOP agenda and may soon be given a star on the Hollywood Walk of Fame. Wikipedia notes that “questions arose about whether Reagan’s policies benefited the wealthy more than those living in poverty, and many poor and minority citizens viewed Reagan as indifferent to their struggles.”
Reagan also worked to create less government, a direction the GOP still promotes today as we know. He froze the minimum wage at $3.35 per hour and slashed federal assistance to local governments by 60%. He cut the budget for public housing and Section 8 rent subsidies in half, and eliminated the Community Development Block Grant Program. Wikipedia notes that “the widening of the gap between rich and poor begun in the 1970’s grew wider under Reagan.” They go on to say that Reagan “has remained popular as an antitax hero despite raising taxes eleven times.”
There’s more, but not much. We’re done here. I think you can clearly see the connections between the policies Reagan put into effect and the policies the Republicans wish to see enacted today as they tell us every day, over and over again. They obviously wish for the return to Reagonomics with every fiber of their beings. Reagan’s Presidency represents, they believe, a true test of the efficacy of their view of economic and government and they feel that it all worked “like a charm”. Many poorer Americans did not feel the same way and Reagan did not face nearly the same issues the American economy does today. But now I feel I understand why we have been hearing so much about Ronald Reagan.

Millions, Billions and Trillions

Our government and our journalists and others in the limelight throw around the m’s, b’s, and t’s (millions, billions and trillions) as if these numbers strike realistic chords in the masses of we the people who are the targets of their comments. To many of us, millions are esoteric enough, billions speak to us more of people who we hear are billionaires, and when we hear others speak of trillions we are not even sure how many zeroes are involved. ( if millions have 6 zeroes, then billions have 9 zeroes, and trillions must have 12 zeroes) Better to express these as scientific numbers: 106, 109, 1012, equally unreal and incomprehensible but at least it references the number of zeroes. No wonder making up a debt which measures in the trillions just panics most of us. It sounds like a debt of cosmic dimensions and how will we ever be able to pay such a debt? What order of debts do other nations owe?
Here’s a very brief summary of the top debtors (find a complete list in Wikipedia) with total debt and per capita debt for comparison:
US                          15 trillion                 47,568 $ per capita
EU                          13.7 trillion             27,864 $ per capita
UK                          8.9 trillion             144,338 $ per capita
Germany                4.7 trillion               57,755 $ per capita
France                    4.6 trillion               74,619 $ per capita
Japan                     2.4 trillion               19,148 $ per capita
Ireland                   2.4 trillion              519,070 $ per capita
Luxembourg          1.89 trillion          3,696,467 $ per capita
When viewed this way America is not in the best shape, but is certainly not in the worst. How we will ever pay off trillions in debt when we barely make enough money to live from month to month is a total mystery to most of us and weighs on our minds. However, it is so out of proportion with our incomes that it doesn’t weigh on us as much as you would think, at least until you start threatening the programs (some of which we pay for) which help us make it from month to month, without giving any realistic tips about how we will survive without these benefits.
Then we watch the election coverage and we are told about the “war chests” of the various candidates for the presidency. Here is the breakdown of what the 2012 Republican candidates raised in the third quarter of 2011:
Rich Perry                                            17.2 m
Mitt Romney                                       14.2 m  (total in 2011, 56m)
Ron Paul                                                8.3 m  (total in 2011, 26m)
Jon Huntsman                                       4.5 m
Newt Gingrich                                         807,962  (total in 2011, 12m)
And of course this does not mention the amounts raised by candidates who have dropped out which also amounted to at least 7 m in the third quarter of 2011 alone. Obama raised 70 m in the 3rd quarter of 2011. We’re talking about $130 million or maybe as much as $155 million just represented by the sums mentioned above, in what is not a very up-to-date list. These people certainly come much closer to comprehending trillions in debt than the rest of us do. At least they are used to doing their math with 6 zeroes, which most of us are not. Twelve zeroes shouldn’t be too much of a leap.
 What if, instead of listening to a year’s worth of negative political ads, the candidates contributed their campaign funds to paying down the national debt and ran a much more low-key election that relied on their stands on the issues?  What if they let us make up our minds based on our perception of the merits of the various candidates? The millions they have raised would hardly touch the debt but it would be a beginning. What if, whenever millions were about to be wasted on some unnecessary “necessity”, they were also subtracted from the national debt? Then our representatives in Washington wouldn’t be trying to get “blood from a stone” by stealing from the American people who are not acquainted with dollars amounts which have these multitudes of zeroes following them. Isn’t there a way to run a “free” election which is “free” in more than one sense; free in terms of choice, and free in terms of dollars? Then maybe all these dollars the rich throw at our politicians could instead be used to support the American economy.