Archive for July 2010

Ethics or What?

July 31, 2010

The House Ethics Committee is dealing with two long term House Democrat members.  The unfolding process is baffling.

Representative Charles Rangel has chosen to contest his charges in an open trial and Representative Maxime Waters has similarly opted. What would these two representatives be thinking? Why didn’t they settle for the normal “wrist slap” and be done with it?

Rangel has admitted he was a little sloppy with the paper work (not reporting income from Caribbean vacation homes). Waters claims she did nothing to help a bank that her husband owned stock in. I wonder whether these two are judging their own actions by the standards they see around them.  (Senator Dodd accepted a “VIP” (read favorable interest rate) mortgage from a lender his committee was supposed to overseeing.) Is Rangel and Waters simply saying “why us?”

Ethics and political behavior seem today terms that are at odds with each other. With campaigns costing millions and for most Congress members there is no such thing as free time. When not in Washington, Congress members must raise money for the next election. If they worked as hard at the Congressional job, things might be better.  Instead they trade their vote for some special interest’s money.

The cat is out of the box, and short of resignations, the trials will take place. Since both members are african-american and democrats, there will be little sympathy in the broad public. These charges are necessary to have any chance at limiting misuse of office, but even convictions is unlikely to change the amount of similar behavior by other Congress members.

I am waiting for some clergy members to speak up as character witnesses for these two souls.

I Wonder Why?

July 29, 2010

Scene 1. Clinton White House. The Weekly Standard, Fox News, the Editorial pages of the Wall Street Journal and many other like minded media sources are spewing out daily a hash composed of “Clinton is a congenital liar”, “the Country is going the wrong way”, and “Clinton is weak on defense”. Reflection:  So, what.  The Clinton years were 8 solid years of achievement where all boats rose, the Country prospered, and the Government ran a surplus budget. (In truth, the Monica Lewinsky episode was a black mark upon Bill Clinton and although this transgression did not rise to impeachment standards, it reflected badly upon Clinton himself).

Scene 2 The George W Bush White House. The Weekly Standard, Fox News, the Editorial pages of the Wall Street Journal and many other like minded media sources could not praise Bush more, and castigated those who questioned Bush’s policies as somehow “un-American. Reflection: History will judge the accomplishments of the Bush years. In the mean time we should be able to remember the invasion of Iraq (a Country that posed no threat to the US and had had nothing to do with 9/11), Abu Ghraib (a testimony to a foul “tone at the top”), Guantanamo (a glaring example of an Administration that did things and then thought later of the consequences), Katrina (a chicken that came home to roost), the Bush tax cuts (fiscal moves that could not be afforded and one that helped the rich more than everyone else), the collapse of the housing bubble (after 8 years of watching the bubble develop and taking no action), and maybe the best of all, the near collapse of the global financial sector due to little or no regulatory enforcement on US Banks and Investment firms.

Scene 3. The Barack Obama White House. The Weekly Standard, Fox News, the Editorial pages of the Wall Street Journal and many other like minded media sources are having it their way again. Obama is a socialist (not true), he is a fascists (not true), he has raised taxes (not true yet), and oh, yes, Obama is a liar (also not true). Reflection: Obama has been in office a year and a half. During that time the financial sector has stabilized, the economy has begun to recover (weakly to be sure), the US is on tract to get out of Iraq and Afghanistan is working its way towards a resolution (certain it will be no clear cut victory since that was never possible). Oh, and Obama has also lead the fight to pass a heathcare reform bill (in truth this was step one to include most all Americans in being able to obtain healthcare coverage but step two, dealing with out of control costs, remains to be tackled.

Scene 4. Main Street, Some people still prefer to obtain their view of the world from The Weekly Standard, Fox News, the Editorial pages of the Wall Street Journal and many other like minded media sources. The world may actually be one thing but to these people the world is what they have always thought it was, and the have The Weekly Standard, Fox News, the Editorial pages of the Wall Street Journal and many other like minded media sources to prove it.

Untapped Efficiency

July 28, 2010

One of the reasons that the current recession is taking so long to recover is tied, economists say, to the elimination of so many non-productive jobs with computer aided technology. In some cases this technology is not new and has been in use for a number of years. It has taken a severe jolt to the overall economy to motivate businesses to take full advantage of the productivity tools (computers, word processing and spread sheets, and integrated accounting systems like SAP). There is no reason for the jobs people used to do in these areas to return.

The other side of this coin is that new companies should be able to run more efficiently (read at lower cost). Extending this idea suggests that regaining some lost manufacturing jobs should be possible if the companies run at these new efficiency levels. Ocean transportation, riding Chinese labor costs, and a more competitive US climate all harbor well for US jobs.  New companies and new manufacturing jobs will in turn support new services (and new jobs in those services), and so on.

Rebuilding jobs is a much bigger task than just described. There are still massive areas where inefficiency remains untouched. Government agencies (simple inefficiency as well as desire to employ people for social or political reasons), hospitals and health services (there is a payer and no check on rising health care costs), and the military-industrial combo (bloated defense department spending) are stuffed with extra jobs. The rebirth of American jobs must accommodate all those out of work today plus all those who should be out of work but are not.

As the pressure builds to balance our budget, the enormous defense budget and the scope and magnitude of government bureaucracies, will present irresistible opportunities to trim employment. What an opportunity for the private sector and the tax payer.

It is all about competitive jobs in a competitive work place.

Leak or Leaks?

July 26, 2010

Today’s newspapers are telling Americans that the war in Afghanistan is going poorly and that the Pakistanis have not always been our ally. These reports are based upon “leaked” electronic correspondence, mostly from lower level military members and all “unclassified”. The White House is aghast and has uttered the words “someone could be killed or injured because of these leaks. Hmmm.

It should be a surprise to only those who have slept for the last 8 years. Instead of exiting after the fall of the Taliban Government, the US decided to stay. Nation building would eliminate the chance of the Taliban coming back we were told. The Bush Administrations dismal execution wasted 6 years and now President Obama is into his second year with just as many doubts about the future.

President Obama should view this leak as a blessing and use it to pivot. Military force is too blunt a weapon for Afghanistan and country building is too expensive for one country to afford. The US needs a new policy on Afghanistan, one that does not trade US soldier’s lives for vanishing gains in pacification. The US needs to recognize that the Taliban represent the same threat to most other countries (if a threat exists) and steps to mitigate should come from wallets of at least the G-8, if not the G-20.

Complex Systems

July 25, 2010

George Lakoff, a noted UC Berkeley linguist has describe the major difference between liberals (progressives) and conservatives as the way they view the world. Specifically progressives see the world as a result of complex interactions and conservatives see the world as “one-off” events. Mining coal is a smart decision because coal is plentiful and relatively low cost, says a conservative. Mining coal, may be ok if burning coal can be done so that green house gases are not produced (because they will hurt the environment), says progressives.

It should be therefore little surprise that progressives see the need to increase taxes in order to pay for government services while conservatives see no good coming from higher taxes, and that taxes as a limitation on their freedom to use their person property (money) as they wish. Both views are providing a disservice to Americans because they are only acknowledging a part of the problem.

If conservatives do not wish to pay taxes, then in the ideal world they should not use any of the government services that are provided by taxes. Roads, schools, airports, national defense, local police, and the internet are examples that conservatives use everyday that result from taxes building the US’s “common wealth”. I have not heard any main stream conservatives say that. These conservatives say, “I am just against health care, or social security, or bail outs for auto companies, or some similar government expenditure”.

Progressives see health care, or other social programs as part of a complex system of interacting parts of everyday life. Progressives may base their arguments on “rights” for each citizen to have health care, or food to eat, or shelter for them and their family, but behind this statement is a belief that if society does not provide for those who can not provide for themselves, lawlessness will breakout as these people take things into their own hands.

The progressive view, however, is very difficult to communicate because the connection between government programs and the results we see in everyday life is difficult to trace. In addition, it is difficult to prove a negative if you have taken the precaution already. (If you don’t eat you breakfast, you will not study well in school. So if everyone eats their breakfast, will everyone study well at school? Maybe not, especially if they come from dysfunctional homes. Breakfast may be important, but is not all that might be necessary.)

The Bush tax cuts will occupy a lot of media attention in the next few weeks. Politicians will almost assuredly avoid any complex discussion of why allowing the cuts to lapse without renewal is the right or the wrong approach. The Democrats are talking about half the baby. They would keep the cuts for the middle class and allow them to lapse for those earning over $200,000. The Bush tax cuts were a travesty for a number of reasons, like we could not afford them, but they were glaringly unfair since the rich got far more of a break (as viewed from someone who believes in progressive taxes).  To restore the higher taxes just on the rich seems unfair too.

It seems a daunting task to even attempt to discuss taxes holistically. Never the less, some one or some organization has got to lay out a story before the spin meisters take over.

Politicians will be the last persons we should expect to speak out sensibly on this subject. But if not them, who?

Toothless Tiger

July 24, 2010

Senators Fluster and Bluster have been vocal for quite some time denouncing the nomination of Elena Kagan for a position on the US Supreme Court. Their speeches have been political theater and intended to reassure their supporters that they do not agree with the President’s nomination. Beyond Fluster and Bluster, there has been little else said about Kagan.

Democrats have sufficient votes to approve the nomination and there has been no smoking gun uncovered in Kagan’s history. Although there should be no doubt that Kagan represents a “progressive” view of the Constitution, the normal Supreme Court votes will remain 4-5 in favor of the conservative side.

The real fireworks will come only if one of the five conservative votes (Kennedy, Roberts, Alito, Scalia, or Thomas) needs to be replaced. Then Senators Fluster and Bluster will have to fight to get air time because every right wing or religious group will be on the airwaves denouncing whomever President Obama nominates.

This is a long way of saying why it is so important that Democrats do not loose control of the Senate in this falls elections. Losing control of either house is not good and will bring immediate gridlock to Washington. Gridlock, however, is far superior to a prejudice to push back years of precedence. The mean spirited right wing views speak against modernity and belong in the trash can of history.

Take heed.

Bush Tax Cuts

July 23, 2010

Congress is now turning its attention to the quandary of what to do about the Bush Tax Cuts.  Doing nothing is the correct answer but that is highly unlikely. The Tax Cuts have an expiration date (end of this year) and tax rates are scheduled to return to Bill Clinton era levels. Since the Country was doing well and all boats were rising, and we had a surplus in the Federal budget, what is wrong with that picture?

Well for one thing, the tax cuts and our present slow economy are not causally related. Higher taxes does not necessarily mean more or less economic activity.  It is, however, popular for most economists to express concerns about taxes and our weak economy. What do they imply?

Economist predict that higher taxes will reduce private sector spending since each family will have less money after they have paid their taxes.  This seems obvious but lowering taxes does not guarantee that jobs will be created either.  Why?

It is becoming more clear that the current down turn in our economy is not going to be a short term, temporary event. Rather the combination of out-sourced manufacturing jobs and the incorporation of computer technology into the workplace has made what remains of American businesses highly productive. Jobs have been removed and will not be added back simply because Americans have more after tax money.  China can produce all the products Americans want to buy and the internet can handle many more transactions than now at virtually no additional costs (and no more jobs).

So back to the tax cuts.

No one will like paying more taxes. Never the less, progressives who seek government services have no right to seek these services and not be willing to pay for them. Conservatives who call out for a smaller government have no right to take benefits away from some Americans unless they negotiate any reduction in services.   In addition, conservatives should be true to their presumed fiscal responsibility mantle and support tax increases until the budget is balanced.

None of this is likely to happen. Democrats will cry about the middle class and take any increases on them off the table. The Republicans will charge that any increase in taxes will kill the struggling economy. And most likely, Democrats will cave and agree to push the end of the Bush Tax Cuts further out in time. (Most Democrat politicians are high earners and will find no tax increase to their advantage too.)

And all the while the deficits continue and the debt balloons.   Along with Abu Ghraib, Gaunatanamo, and Katrina, the George W Bush years left us with toxic presents that just won’t go away.

Missed Opportunity?

July 21, 2010

Republicans and Democrats fought a meaningless battle yesterday over extending jobless unemployment benefits. Democrats characterized Republicans, again, as heartless and willing to grant tax cuts for the rich but not extend benefits for the unemployed. Republicans responded that they were 100% in favor of helping the unemployed but wanted the benefits extension funded. Democrats chose not to take the bait and the measure passed strictly on party lines.

Given the state of our current economy, extending unemployment benefits makes sense. Putting the cost of the benefits on the charge account (national debt) does not make sense. Democrats missed an opportunity to see just how strongly Republicans felt about the unemployed.

The opportunity would have been to attempt to increase taxes to cover the cost. And guess what, that was the bait. Republicans would have howled about the “tax and spend” Democrats. Republicans would have pointed to some other social service that should have been cut rather than increasing taxes.

The Country really does need an airing of the issue “paying as you go”.  Health care, social security, national defense, and government services are not free. When it takes place, it will be an ugly debate which will expose America’s prejudges, mean-spiritedness, and (hopefully) its generosity and big heartedness. Our current political dialogue is locked into two extreme positions that do not work. George W Bush demonstrated one path that ended with the rich getting richer and the entire global financial system almost melting down. Barack Obama is on a path of enacting more progressive legislation than any other Administration in recent history, yet has no plan to pay for it. Both of these paths are not in America’s best interest.

Maybe after this fall’s election, Democrats will see the wisdom of taking on the Republicans and calling their bluff. Maybe Republicans will broaden their message and show how all American boats can rise with the tide and not just the privileged few.

Maybe, but I doubt it will take place.

The Wide Gap

July 20, 2010

There is a certain amount of all political discourse that is simply about keeping one’s job. Members of Congress claim X,Y, or Z in order win the votes of his constituents. It may be half the truth or entirely misleading, but X, Y, or Z, if believed, will serve the greater good in the Congress member’s mind. But is that what all political talk is about?

If one listens carefully, there are in fact sharp philosophical differences between Democratic and Republican positions. There are also serious gaps in the logic and consistency of both Parties’ positions.

Republicans do not believe that giving people money is an effective way to promote individual drive and productivity. They believe that individual drive and productivity are the tools to a person’s prosperity.  “Give a poor person a handout, they will remain poor forever is the conservative position”. The unanswered question is “how does not giving poor people assistance help end poverty? Where in the world is their a working model of denying poor people money (or other public assistance) that has reduced poverty?  Regardless, Republicans call for lower taxes and much less social spending, and of course, in return they ask for your vote.

Democrats believe that giving those in need money  (public assistance), is necessary and the “right” thing to do. Food stamps, medicaid, and public housing support are examples where Democrats have placed legislative bets. Has poverty decreased?  Never the less, Democrats seek votes on the basis of social outreach even though it is not working.

The political discussion might benefit from moving to a more pragmatic basis. The US has a large problem. It has a large and growing population of poor people. Public assistance might be a necessary band-aide but it is insufficient by itself to reduce poverty. Denying public assistance all together seems suicidal. Hungry people, cooped up in large cities, may resort to unpredictable reactions.

The issue is not public assistance, it is poverty levels and the concentration of poor people. We will continue to hear political debates that do not bridge the real gap, and we will continue to not have any basis to measure our politicians’ effectiveness. On one side, only abandoning our social promises will become a spreading cancer where more and more citizens will fall below the poverty level.  On the other side, continuing to providing public assistance as we currently do should not be expected to produce any better results, and we should expect a unchanged growing number of poor people. Heads we lose, tails we lose.

The poor are potential workers, tax payers, and contributors to society. The political discussion gap is that the poor are hiding in plain sight. Lets close this gap and talk about the real problem facing America.

What Do You Expect?

July 19, 2010

A Government watchdog agency issued a report Friday that claimed the bail out of GM and Chrysler failed to take in account the economic impact of allowing GM and Chrysler to shed so many of their dealerships. The report stated that, as a result, there were a lot of lost jobs that have not been replaced. California Republican Congressman, Darrel Issa, could not resist adding that this report just goes to show what you get when Government intervenes with the private sector.

Not mentioned in the report or Issa’s comments is the simple observation that had the Government not intervened, GM and Chrysler would have surely failed and there would have been no work for any of GM’s 6000 dealerships and not just the 600 that were closed. There was also no mention that Toyota sells as many cars as GM with only 1200 dealers. And of course, it was not mentioned that few who have visited GM or Chrysler dealerships, can point to having had a pleasant experience.

Congressman Issa is far less interested in facts than in slinging mud and hoping it sticks. The auto industry, warts and all, is the single largest source of employment in America. Bailing out GM and Chrysler should not only have been expected, it should have been demanded. Share holders for both companies lost their investments, top management in both companies were replaced, and both companies got new owners and new boards.  Not your usual bailout.

In return, jobs have been saved and tax revenues preserved. What is it about this that Congressman Issa really does not like?