How Long Will The Grand Bargain Take?

I can understand some of the critical reviews of President Obama’s time in office.   The more serious reviewers find him as only an average chief executive.  His opponents find him an utter failure, worst ever.  Hmmm.

The expectations for this “post racial” President were very high indeed.  Living up to the hype would be very difficult for anyone.    President Obama’s shortcomings, however, lay not so much in his goals (what he wanted to do), but in how he has tried accomplished his agenda.  As chief executive, he has proposed legislation and Congress has said “no thanks”.

The President identified (correctly in my opinion), healthcare, as the most important strategic objective.  He wanted to correct health care injustice and get control of its spiraling cost.  For example, Obama pointed to upwards of 50 million Americans who had no coverage, to Americans who were denied coverage on the basis of a “pre-existing condition”, and to millions who were one illness away from complete financial failure.

His goals were worthy but his actual achievement, the Affordable Care Act, is a pigmy compared to what is actually needed (and what is found in the rest of the modern world), and ACA is still a fight he must wage every day.

Compounding his problems, the President has been pushing on a rope trying to get anything through Congress.  The GOP has lapsed into a “just say no” approach.   In their zeal to blacken (get the pun) President Obama’s record, Congress has turned its back on the needs of the greater USA.  The President has tried to stand above the “food fight-like” Congressional behavior but instead has too often appeared aloof.  (It took former President Bill Clinton to adequately explain President Obama’s first term because Obama either couldn’t or wouldn’t try.)  The end result, no action.

Today the New York Times published an article comparing the US performance on global inequality measures.  Simply stated, the US appears to be “exceptional”, unfortunately in a disappointing way.

Comparing other countries, the US rated on (1) Income inequality (5th worst), (2) literacy inequality (5th worst), (3) Infant mortality (4th worst), (4) child poverty (4th worst), and (5) single parent families (worst).  Hmmm.

The President has said often “we can do better”.  And for sure doing better is not lower taxes for corporations or the top 2%.  Rather “doing better” is far more likely linked to increasing the economic strength of the middle class which should raise all boats (even those of the top 2%).

Improving the middle class’ economic strength will require a greater share of corporate returns being shared with ordinary workers.  It must also involve bringing under control the staggering cost of health care, particularly the annual increases.   A revamped health care system such as a universal system like Germany’s would replace Medicare and Medicaid and allow the US to focus on the costs of a single health care delivery.  If the US could find the resolve to move to a system like Germany, health care costs would drop by as much as 50% while health outcomes would increase.  Businesses would no longer be saddled with contributing to health care through employee contributions, and the Federal Budget could more easily be studied with Medicare and Medicaid eliminated.

Regrettably, there is no interest in Congress.  To improve the US position in these “inequality” measures will require an interested and dedicated set of public servants.  And to turn the current crop of Congress Members into public servants seems just as remote a possibility.

So maybe all that is left for President Obama is to lay out just how exceptional the US really is (pretty nice place for the top 2%), and what strategic changes need to be made (much less income inequality, tax reform (including new taxes), sharply lower health care spending, and corresponding reduction in government spending (Medicare, Medicaid replaced by universal health care).

The chances for any serious action seems not timely at this moment.  I wonder how long it will take?

 

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2 Comments on “How Long Will The Grand Bargain Take?”

  1. FLPatriot Says:

    Wow, after this article you need to rename your blog to “Moving further to the left”. You are no longer talking about the center of political discussion in America. This post reads like it was written by the progressive caucus in Washington DC.

    Rather “doing better” is far more likely linked to increasing the economic strength of the middle class
    How would you suggest we do this?


    • FL, good to hear from you again.

      I will admit that this post is more progressive than Ted Cruz or Marco Rubio might wish to put their names to… But rather than left or right, don’t you think it is important to recognize both the direction the US is sliding and its comparison to other modern industrial countries?

      When such a comparison is made, the current GOP solutions do not measure up in the least, and the Democrats are hiding in the weeds hoping to do better next election without saying anything…

      On “income inequality” the countries doing worse than the US were Mexico, Chile, Israel, and Turkey… the inequality means that the top 10% earned significantly more than the bottom 10%. The US difference in the income of the top 10% is widening each year. This is a prescription for third world status.

      Healthcare costs are twice what almost all other modern industrial countries spend (while these countries post better health outcomes than the US). US businesses try their best to provide as little health care as they can (part time workers) because health care costs are huge and are increasing each year faster than inflation. So it makes logical sense to follow world ‘best practices” while reducing the costs on businesses and individual subscribers.

      With respect to how to close the income gap, I admit readily that that is a tough problem. I know of no businesses owners or CEOs that want to willingly accept less pay. Human nature.

      But if you look at average CEO pay compared to average workers pay, in the 60’s the ratio was about 30. Today it is about 300. Or in today’s dollars where an average worker earns about $50,000, a CEO’s pay at $1.5 million would be on the same level… but today the average CEO earns about $15 million and people like Larry Ellison of Oracle earned $96 million…

      (http://www.google.com/imgres?imgurl=http://moneymamba.com/wp-content/uploads/2011/09/ceo-pay-vs-average-worker.jpg&imgrefurl=http://moneymamba.com/why-ceo-pay-grows-faster-than-worker-pay/&h=382&w=600&sz=36&tbnid=hNWYmTFQ16f7uM:&tbnh=70&tbnw=110&prev=/search%3Fq%3Dceo%2Bpay%2Bcompared%2Bto%2Baverage%2Bworker%2Bchart%26tbm%3Disch%26tbo%3Du&zoom=1&q=ceo+pay+compared+to+average+worker+chart&usg=__y4P9_1GrA7YGlGzhzLtfIiaHPiA=&docid=SduJJRXDJ5LzrM&sa=X&ei=f0D5UYPYCouh4AORrYHACg&ved=0CDIQ9QEwAg&dur=18376

      Since I doubt people will willingly take less when they can take more, I would look to the tax code for renumeration packages worth more than some multiple of average worker income… Some number like 30 to 50. All income above that ratio, would be subject to a higher tax rate. This would apply to all levels below the CEO also.

      Another idea is minimum wage where the wage is set around some “living standard” and indexed to inflation. This could all be combined with a reduction in corporate tax rates, elimination of corporate tax breaks, and elimination of employer involvement with health care insurance.

      (Or you could do the reverse, let the CEOs make what they want, but if they receive more than the 30-50 number the corporation is taxed significantly more in order to provide relief to the middle class.

      I submit these are “progressive’ ideas but they are in the mainstream of what ails America…


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