Archive for January 2012

What are the real messages of the 2012 election?

January 31, 2012

The Florida GOP primary is a hard one to handicap.  Early voting is the reason.  When the mail-in polls opened, Newt Gingrich was in full stride in South Carolina and Mitt Romney appeared asleep on duty.  The question, how many Floridians voted early for Newt?

Since South Carolina, Mitt has bounced back to life in a big way.  His campaign and its “uncoordinated” affiliates have saturated the Florida television airways with all sorts of negative adds and out spent Gingrich about 5 to 1.  From this perspective, Mitt should win handily.

Santorum and Paul are not contenders but will syphon off probably 25% of the vote combined.  That’s 25% Newt could really use.  Too bad for Newt.

But what were the messages voters were reacting too in picking their candidate?  Don’t know.

Even more important, lost in the TV hype is a clues to any underlying difference between all the GOP candidates and President Obama.  For example, what is the proper role of government in today’s economy?

The President continues to follow a Keynesian model where in the absence of strong private demand, the government is the spender of last resort.  The idea is that with spending, businesses will man up to meet the demand.  Lots of people earn money and demand other goods and services, and suddenly the economy is able to operate on its own.

The GOP model is called “trust me”.  In the Republican case, government reduces or eliminates regulations and simultaneously reduce taxes (especially for the job creators).  The GOP proposes that businessmen, now free of cumbersome regulations and more able to invest their profits (rather than paying taxes) will hire people, produce goods and services, and bingo, the economy is jumping again.

Left unanswered in the GOP model is where does a weak economy get the money to buy these newly available goods and services?  Equally unanswered is why should we believe that “unregulated” businesses will take into account the greater good of the community while doing their business this time?  Just “trust me” is their answer.

Actually both of these approaches rely upon “just trust me”.  Both require the government to spend first.  Both approaches predict a recovered economy will generate future tax revenues sufficiently greater than now to pay back the cost of each approach.  So it is sort of a case of who do you believe?

Mitt Romney’s tax return should seal the deal.

Romney’s 14% tax rate should tell any voter all you need to know about what the GOP approach is all about.  Those like Romney win with a good economy and win with a weak economy.  They have no skin in the game.

The 2012 election conversation needs to expand to fully comprehend the US economy.  While I believe Keynes economics is necessary, I also recognize that government spending is far in excess of what Americans are willing to pay.  Health care and defense spending costs are draining the strength of the economy.  (Health care spending is about $3 trillion and defense is almost $1 trillion.)

Medicare is the budget surrogate for health care costs.  We cannot let politicians focus in on Medicare, say they fixed it and then move on.  The problem is the overall health care delivery system is too costly and increasing at a rate greater than the rate of inflation.

Defense spending is also serious.  Defense spending disproportionately aids the top 1% by ensuring that America’s business interests around the world are not impeded.  When we see what current law allows when we review Mitt Romney’s tax return, it should be clear that the wealthy do not want to pay for what they are receiving.

It is time for the debate organizers to ask real questions.  Who cares who is the most or the realest conservative.  What America needs is comprehensive answers to fixing both the government budget and the national economy.

 

When Common Sense Is Just A Step Away

January 30, 2012

The Middle East offers us a snap short of what a little common sense could achieve, and instead how costly its absence might be.  The Israelis and Palestinians provide us a ring side seat.

Face to face negotiation at long last were held this past week.   In Jordan, Israeli and Palestinian Authority representatives finally met.  The talks, however, broke down suddenly when Israel announced that their West Bank settlements (on occupied land) would be part of Israel in any greater settlement.   The Palestinians responded that that position was a non-starter.  Talks are over, or at least suspended for now.

It should be no surprise to anyone that the Israelis would want additional territory in the West Bank.  Why would they have built so heavily if they only wanted to give it back?

The Israelis, however, also knew the basic Palestinian (and world position) is that any Israeli additions of West Bank land must come with agreeable land swaps (Israeli land to the Palestinians).  So to stake out such a position so early without the swap caveat makes you wonder what the Israeli negotiators were thinking.  The Palestinians, as expected, could not swallow that.

To be sure, there are always other imponderables and what they mean to these negotiations.  What does the mess in Syria mean?  What about Iran?  And what happens with the future of Iraq and Eqypt?  You can speculate where in each situation there is help for one side or the other.  But, does that justify short circuiting negotiations?

Probably not.  What does explain the Israeli position is local politics.  The “social values” block of Israel, the radical fundamentalist and extreme orthodox religious Jews, have pushed their agenda for annexing much of the West Bank.  God told them it was ok.   And they will bring down Prime Minister Netanyahu’s government if necessary.  This group is by far a minority but the larger parties are squabbling between themselves.  The major parties can not see that compromise in this situation is better than pandering to this small minority.

Social values in and of themselves are not the problem.  Trouble arises when social values are used to achieve political ends.  Because social values inherently sound like something good, the public sleeps.  The “holy men” would never say something not true.

A holy man is first and foremost a man, and men do make mistakes.

The US Presidential scene does not help matters.  With US social conservatives crying large crocodile tears in support of Israel, the common sense message of getting these negotiations advanced is not coming through.

It is quite possible that a reasonable Israeli position will also be unacceptable to the Palestinians.  In that event, the Palestinians can be seen as the unreasonable negotiating partner.  But for now, we seem stuck just short of making progress.

Common sense seems just a step away.

So Where Are We?

January 28, 2012

Florida could as well be located on the North Pole.  I say that in relation to the rhetoric we are hearing from the candidates in Florida versus their words spoken in South Carolina the week before.  The only thing that has remained constant is that all the woes of America are the fault of President Obama.  Liars figure, but figures don’t lie.

Mitt Romney has had a very positive week.  His campaign momentum appears to be on the rise largely on the strength of two good debate performances.  Yet the big question not being addressed is where does Romney stand on tax reform?

Mitt’s tax return speaks volumes about how the system is tilted.  For sure, all Americans are eligible to buy stocks, bonds, or other complex financial instruments.  All Americans also qualify for a low rate on income obtain from these investments.  The facts, however, are that these low rates benefit the rich disproportionately more than the rest of Americans.

This is not a case of “class warfare”.  Rather, it is a case of common sense.  The tax code, we are told, is suppose to be progressive.  Today almost half of those filing returns pay zero.  The rich like Romney pay a tax rate far less that those caught in between.  Tax reform is necessary for fairness but it should be viewed as mandatory for the financial health of the country.

The present tax code is not President Obama’s fault but it sure demands fixing.  Since Romney has a dog in this fight, I wonder why Wolf Blitzer does not press this question and find out how Mitt really feels?

Getting Out In Front

January 27, 2012

Defense Secretary Leon Panetta has laid out his plan for reducing the $700 billion annual defense budget by about $50 billion.  Free lunch aficionados should rave over his plan.  Panetta says fifty billion out and no change in our defense capability.  I wonder whether other Cabinet members can do the same?

The route to this reduction rests upon reducing Army headcount.  With Iraq over and Afghanistan on the downward slope, common sense could lead anyone there.  Never the less, national security is a hot political button and the last thing Democrats want is to be doing something responsible and get blamed by the GOP for weakening America’s defense.  It doesn’t matter that the GOP will be exhibiting gross hypocrisy since their charge won’t be true and reducing the deficit is a main part of their campaign platform.  But can the American public see this?

If Americans thought about defense spending, they would conclude something quite different.  First they would slash far more and second, they would demand foreign countries support financial our defense expenditures because are designed to help assure world peaceful order.  Foreign contribution have a snow balls change of taking place.

Had Secretary Panetta proposed deeper cuts, however, there would have been a huge Congressional backlash.  Forget about Newt and Mitt, just about every Congress member would have been up in arms.  And national security would not have been the reason.  Defense means money.

The annual $700 billion stimulus “defense” authorization funnels to each State and almost every district a lot of money.  This spending means jobs and profits for industry, and generous campaign donations for the Congress members.  Do you get the picture?

Secretary Panetta has made the first move.  This will allow Congress members to question (gently) the wisdom of his cuts, hmmm in such a dangerous world.  Congress can then agree that Defense has given enough (maybe too much) and move onto other spending sources.

The Washington rhetoric often is heated but when it comes to government corporate welfare, that is a line Congress members do not cross.  Money that ultimately greases their campaigns is fundamental.

With a defense budget about equal to all other countries combined, and 10 times greater than the next largest, logic does not enter this equation.

Outrages But Fully Expected

January 25, 2012

The first Amendment assures a separation of church and State, many say.  It actually says:

“Congress shall make no law repecting an establishment of religion, or prohibiting the free practice thereof…”

The Catholic Church and soon to be elevate Cardinal Timothy Dolan think other wise.

Dolan introduced the notion that the Obama Administration was “at war” with religion.  He contended that there was a coordinated effort to take away protections accorded by the first Amendment.  Serious charges to be sure, but what exactly is the evidence?

I recall cases where family members of certain sects refused to seek medical attention (including transfusions) for a sick children on religious grounds.  They maintained god would heal.  Sadly in too many cases, god must have been tending to more pressing matters.   In some situation local medical officials stepped in with court orders and saved the child.  In others, help arrived too late and the child died.   In those cases, the parents were brought before civilian courts on the basis of child endangerment.

Consider also this modern day divisive issue; pro-choice versus pro-life.  Supporter of choice strongly hold that a woman has a inalienable right to choose paths concerning her reproductive health.  Opponents offer a range in opposing rationale, but in one way or another, all base their opposition on the belief that the unborn has an inalienable right to life.  I will not try to critique each side’s case at this time.

Rather the point worth making is that those seeking an abortion do so because for some reason their pregnancy is unwanted.  There are many reasons given.  Too young, unprepared to be a mother, not willing to marry, victim of incest, and unable to raise the child alone, fetus indicates child will be a special needs baby and unable to handle the situation, and mother’s medical condition puts her at risk if she goes through child birth.  There are many reasons offered.

One way to avoid unneeded pregnancies is through sex education and planned parenthood training including the use of birth control and contraceptive methods.  If there is no conception, there can be no pregnancy.  (Abstinence from sexual intercourse, of course, will also work.  The “do without” route is a fully personal choice but worldwide is rarely successful in practice over time.)

So back to Cardinal Dolan.

The Obama Administration has made it a requirement for employers who offer health care coverage which includes free birth control and contraceptive methods.  Common sense would scream out that this is such a logical method to aid families with family planning and to reduce significantly the occurrences of unwanted pregnancies.

That is not how the Catholic Church and Cardinal Dolan see it.  This requirements is an assault on the first Amendment says Dolan.  Say again?

The requirements to make birth control and contraceptive methods part of health care plans in no way requires anyone to use them.  People are free still to not use contraception, get pregnant, and then be forced to agonizingly decide whether to seek a early termination to the pregnancy.  Is that what the good Cardinal seeks?

Catholic doctrine unfortunately also shuns the use of any birth control technique other than abstinence.  So the Cardinal’s perfect world would remove birth control and contraceptives from drug store shelves.  I wonder whether he would consider that an assault on non-catholics?

The “outrages” part of Cardinal Dolan’s objections is that there are no requirements for anyone to use birth control or contraceptives.  This is a secular choice.  It is also wrong headed because birth control and contraceptives clearly can play an important role in reducing the number of unwanted pregnancies.  But for a church that still holds that sex should be performed only for the purpose of procreating, this type of position should be “fully expected”.

I guess I am really glad the Constitution does say

“Congress shall make no law repecting an establishment of religion, or prohibiting the free practice thereof…”

It tells me that Catholics are fully free to not use birth control or contraceptives even though these methods are part of their health care plans.  It also tells me that non-catholic employees of Catholic organizations can receive these benefits and elect to use them if their religious belief allow.

Believe what you want, do as you believe, but don’t force your beliefs on others.

The Lonely Messenger

January 24, 2012

In last nights GOP debate, Ron Paul appeared like the lonely messenger standing to the left of Mitt Romney, Newt Gingrich, and Rick Santorum.  His message was not to the left, however.

Mitt and Newt occupied most of the oxygen while Rick Santorum flailed about trying mightily to distinguish himself from the Mitt and Newt show.  It is anyone’s guess which candidate was the most effective debater last night, but following the debate Ron Paul was clearly the winner in the eyes of his backers.

Paul’s message is simple and easy to remember.  Reduce the size of government, keep the government out of our personal affairs, and end our involvements overseas.  Not surprisingly this plays very well with the younger voter.  Do you wonder why?

My guess is “spending money overseas” translates into a smaller military and less chance of people getting killed.  I would also think “keeping government out of personal affairs” suggests the end of social conservatives trying to dictate personal choices on others.  “Less government”, like “less filling” might mean anything or nothing to the younger generation.

For example, if you visit the Ron Paul for President web site you can read one of his proposals.

REGULATION:

Repeals ObamaCare, Dodd-Frank, and Sarbanes-Oxley. Mandates REINS-style requirements for thorough congressional review and authorization before implementing any new regulations issued by bureaucrats. President Paul will also cancel all onerous regulations previously issued by Executive Order.

Here is where a sense of history or perspective might help.  As with all the other candidates, the repeal of these three laws and their resulting regulations is proposed in a vacuum.

The Affordable Health Care Act (ObamaCare) may be in serious need of improvements (from a cost perspective) but to repeal it and return to a system where health care can be denied for arbitrary reasons like pre-existing conditions, or put beyond reach by out of sight premiums, is scandalous.  Dodd-Frank also may need changes but to say we have not learned anything from the 2007 experience where the country’s financial sector collapsed is not a very encouraging sign.  And for anyone who can remember MCI, Adelphia, and Enron, repeal of Sarbanes-Oxley makes only sense in the context of other regulations that would hold CEOs accountable for misrepresentations their corporations may purposely make?

I am fairly certain Ron Paul supporters do not think about these three regulations this way.  I also do not think Paul supporters think through his other proposals and figure out how the Country can cut taxes and still deliver services they currently depend upon.  Instead, to them, Paul represents a repudiation of a poorly functioning system.

Never the less, Ron Paul appears genuine and like a good wine, provides hints of honesty and American virtues.  His supporters will enjoy him while he lasts.

What Will They Say Next?

January 23, 2012

The economy is improving in spite of President Obama’s policies.  So goes the standard election year GOP line.  I wonder if it is true?

The most recent poll of business leaders, however, has said they are optimistic about continued improvement in 2012.

On the other hand, with 8.5% unemployment, there are certainly a lot of people who would argue about the economy is not improving.  The Wall Street crowd is looking at poor 2011 profits and therefore much lower bonuses.  I doubt they see a rosy year ahead.  And with both the recent and upcoming college graduation classes, their prospects for finding any job much less one that will help pay back their loans is not very bright.  It’s doubtful they see sunshine about to burst through.

So which policies exactly has President Obama put in place that have caused this malaise?

The vote hungry GOP is all about lowering taxes and eliminating regulations.  There in lies the answer, they pronounce.  Seriously?

During the deficit reduction rounds we saw the true GOP colors.  They had a chance to endorse the Simpson-Bowles Commission findings (and force a vote on legislation) but chose instead to withhold affirming votes.  This allowed them to hold up the country 10 months later with a threatened government shut down.  This drama was all for a deficit reduction sometime in the future of about $100 million per year.  How can a party be for tax reduction when there is such an institutionalize deficit?

The GOP quickly says it is about cutting government spending.  That is their answer and mathematically is would seem to work.  Cut a trillion and the budget should be balanced.  Well, maybe not.

Cutting $1 trillion in government spending means (most likely) large transfers of government spending to US citizens, most of whom are on fixed incomes.  The second group impacted would be government workers such as regulators and workers in Agencies the GOP would eliminate.

To be clear, reduction in government employees as well as transfer of Medicare costs to recipients are probably going to be necessary.  What is just as clear is that these steps which are intended to fix the deficit, if enacted as promised, would increase the unemployment rate, not reduce it, in the short run of say the next 5 years.

President Obama has followed a fairly tentative path in trying to deal with the economy.  He rejected advisors who wanted the government stimulus to be really big (like $2 trillion) and instead settled for about $700 billion of which a third was tax reductions.  But who cares about what has really taken place.  This is an election year.

The Keystone pipeline is an illustrative example.  The plan which was rejected this week runs the pipeline through lands key to water supplies essential to farmers and residents living in Nebraska.  For sure there are partisans on both sides of the argument and some who argue against any pipeline simply because they want the country to pursue alternate forms of energy.  But doesn’t anyone remember what happened not so long ago in the Gulf of Mexico?  Why take chances when there are other routes to build the pipeline?

House Leader John Boehner has said the President should not be surprised if any extension of the payroll tax reductions (which must be settled in the next month) will contain a requirement to approve the Keystone pipeline.  This is strange talk from someone who still has signs of the bloody nose he got fighting the illogical December House payroll tax reduction extension fight.

Forget for a moment this child’s play.  The GOP may be already screwed if they are depending upon the economy as the issue to beat President Obama.

Not doing stupid things, if done long enough, wins most games.  The President, despite advise to the contrary, has followed this path.