Posted tagged ‘congress’


September 9, 2018

Senator Ben Sasse (R-Nebraska) said in an interview this week that Congress and the government in general had no vision of where the US would be in the future (say 20 years).  As a consequence, Congress members were content to spend time on partisan issues (not to mention personal financial gain).    Consequently, “crossing the aisle” was by definition too hard and Congress’ efforts have become irrelevant towards the US’ long term well being.  Hmmm.

Senator Sasse elaborated that corporations were well into a practice of phasing out employees after 5 to 10 years in favor of some new productivity tool.  There was no long term linage between employees and employer.  Technical changes and obsolescence were reasons given. 

Americans were likely to have at least 4 employers (if not more) during their lifetimes.  No more “life time” employment.  Hmmm

The import will be a generation of workers who may retire with pensions or savings insufficient to support them during their retirement years.  Healthcare and Education were two other long term needs where affordability was becoming a concern. 

How will future Americans afford these services given current trends.  How can America as a country prosper without a healthy or an educated/skilled work force?  How can America turn its back on those retired and on fixed income?

Vision is red meat for politicians.  Speeches are cheap, especially the “I’m for that too” ones.  Extrapolating current trends and “visioning” how they will impact Americans in 20 years is difficult and open to disagreement.  Even more difficult is crafting what Americans need to do now in order to avoid the destructive aspects of ignoring a vision.

Take for example pensions to cover retirement.  The trend is well underway to switch pensions from define benefit plans to defined contribution ones like 401k’s.  When workers voluntarily or involuntarily leaving one employer for another, portability of pensions would seem an obvious need.  Where are the Federal rules to guide such instruments? 

Remember under capitalism, there is no incentive for an employer to provide a pension unless forced to or pensions becomes necessary to retain good employees.  For many businesses, especially those who outsource work, workers are “disposable” and if the worker leaves, there are others to be obtained around the corner.

One can lump in with the issues of pensions, healthcare, and education, non-personal programs such as infrastructure (roads crumbling, bridges collapsing, rivers becoming impassable), alternative energy sources which are affordable and do not increase global warming drivers.

And how about global warming itself.  What if, just for argument sake, severe weather and rising sea levels does happen, how does the US prosper and grow under such an outcome?

Creating a vision is no easy matter.  First, there is no consensus on when these issues might appear, how they might interact, and how Federal policy might mitigate their undesirable consequences.  Second, for a country that seems (or seemed) at easy with smoking does not cause cancer, global warming is unproven science, and (to an extreme) the earth is flat, a public discussion on the future (what a vision might suggest) should be expected to be fraught with misunderstandings, disbelief, and mistrust.

But, is the answer to wait until the future is a little clearer?

America’s major corporations deal with this quandary all the time.  If one of these corporations chooses to “wait until the future is clearer”, that corporation is destine to obsolescence, what say Kodak, Xerox, Sears?  Universities could privately or jointly with others, create “straw man” visions under contract from the Senate for example.  What might emerge could be several “probable” scenarios about what 20-50 years in the future might look like.  And from those scenarios, the legislative branch of government could extract work that it and only it could do.

Regrettably, there is no guarantee that Congress members won’t remain primarily motivated by enhancing their own person wealth.  This is human nature.  Toughening ethics laws could help keep this destructive behavior to a tolerable level and real work on the future could take place.

If not, what else? 

The Week That Was

August 19, 2018

This past week over 300 daily newspapers published separate editorials on the subject of a Free and Independent Press.  This coordinated action rebuked President Trump’s continual message about “Fake News” and “the Press being an enemy of the people”.  It should not require much more than a cursory knowledge of fascist regimes in the 30’s and 40’s to summon the consequences of a country losing its free press.  Just ask Joseph Goebbels if you could.

President Trump has a new “friend” in the person of Omarosa Manigault-Newman.  OMH is Trump friend from the past (reality star), a former campaign worker, and the token black staff member on Trump’s White House team.  What caused Ms Manigault-Newman to be fired is not clear and probably not important but the consequences could prove very exciting.   Omarose says she has over 100 tapes of conversations with the President and others.  Hmmm.

Some pundits say that in order to change the 24/7 conversation away from Omarosa, President Trump announced he was revoking for CIA Director John Brennan top secret security clearance.  Why?  Because Brennan had criticized the President and this represented a threat to the American people.  Hmmm.

In another tweet, the President threaten to take away the security clearance for a current Justice Department employee, Bruce Ohr alleging Mr Ohr had somehow acted against the interests of the President.  Hmmm.  I wonder whether the President would try to silence Congressional members if they spoke out too?

And, there in lies week’s message.  It is one thing for the President to reward loyal friends and supporters with millions of dollars of tax cuts and government contracts (that’s government as usual), it is quite another to take away key safe guards of an open and free society.  Once taken, the path towards suppressed speech and lost personal freedoms is well documented.

Up to this point in the Trump Presidency, the operative words have been “go along to get along”.  Like all bullies, there is only one language they understand.  Not just “no” but “hell no”, and this must come from Congress and the Judiciary in non-partisan clarity.

The issue is not “impeachment”, rather it is about clearly and loudly affirming the primacy of an open and free society.  What’s at stake is more valuable than a Supreme Court appointee or a tax cut.  The Russian collusion or other high crimes or misdemeanors will in time take care of themselves.  Becoming a third world country where George Orwell’s 1984 rules the day must be stopped first. 

Smoot-Hawley Or Bust

April 9, 2018

Over the past several weeks, our “Trader-in-Chief”, President Trump has tried to out do “Smoot-Hawley” the infamous tariff builders.  The President’s tactics, while blunter, and possibly less reasoned, lack any substantial Congressional backing.  Are his efforts destine for the same infamy as Senator Smoot and Representative Hawley’s actions.  And,  should anyone be surprised?

To be clear, it is not that some of America’s trading partners have been conducting trade far more favorable to that country’s interest than what might otherwise be called fair and reciprocal.  China, South Korea, and some aspects of NAFTA (Mexico and Canada) offer examples.  So, is President Trump justified in imposing tariffs against these countries in order to redress these alleged trading infractions?

First, it is worthwhile to recall the impacts of Smoot-Hawley (passed in 1929).  Smoot-Hawley was passed to “save American jobs from foreign competition”.  Hmmm, sounds familiar?  Within a short period of time, however, the opposite impact was being felt.  Other countries immediately counter US tariffs with tariffs of their own.  Soon global trade shrunk for everyone and the world settled into a recession followed by a depression.  And, of course, unemployment surged.

President Trump has pontificated for decades about unfair trade and how he could fix it right away.  As President, Trump has seized the opportunity to use his classic bully style of negotiation still thinking other countries will simply fold like a cheap suitcase.  There can be no other outcome than reduced trade in any situation where the US chooses to use the tariff weapon. 

The more countries the US engages with tariffs the more likely the broader use of tariffs will be.  (Tariffs are politically seductive because workers see them only through a narrow self interest perspective.  A politicians who appears to be looking out for the workers’ best interest must be a friend.  Hmmm.)

Another aspect of Smoot-Hawley which must be remembered is that the increased use of tariffs many historians believe lead directly to the second World War.  As trade dropped, workers became unemployed, and as general prosperity plummeted, voters became very susceptible to extremist political rhetoric.  Regrettably, most people do not learn from history and consequently forget the consequences of past bad decisions.

History is not lost on President Trump, IMO.  Rather President Trump thinks he is the biggest kid on the block and he can bluff the US’s ways at the trade bargaining table into more favorable terms.  His objective is to gain voters’ immediate political points. 

With Canada or Mexico, or any other small country, the Presidents bluffs and bullying style might carry the day.  With more sophisticate countries like France, Germany, the UK or Japan, the President will have met his match.  And with China, tariffs are simply not going to work because the size of the China market is too enticing to walk away from for many parts of US exports.

One would hope that President Trump would recognize the futility of tariffs, especially on China and think through some other 21st century approaches.  Reciprocity ( that is equal and opposite tariffs) represents the high road because this leads to competition over productivity.  When protectionist subsidies or favorable local tax treatment are used, the world trade organization can provide a forum to arbitrate these differences.

President Trump, regrettably, sees every problem as a nail and selects his only tool, a hammer, and uses it with glee in attempting to solve each problem. 

Danger Ahead?

February 11, 2015

It is relatively quiet on the domestic political scene. Alabama’s Supreme Court Justice, Rory Moore has fiendishly interrupted the gay marriage issue in Alabama, and in the process, struck a blow for State’s rights. In Congress, funding of the Homeland Security Department raises the prospect of a potential “shutdown” if agreement between Democrats and Republicans cannot be reached. Other than that, the Washington grid lock seems mostly in recess. Is this a time President Obama can relax?

Probably not. Look around the world and tell me what his next steps should be.

Syria is a political (and humanitarian) mess. Attempting to remove Basher Assad predictably has lead to an Iraq repeat, Arab killing Arab (and anyone else who gets in the way). Iraq is still highly suspect and shows no signs of uniting Kurds, Shiites and Sunnis into one functioning State. Egypt appears to be tilting further towards absolute authoritarian rule, albeit a secular dictatorship. Jordan, while currently flexing its muscles in its revenge battle with ISIS forces, is only inches away from chaos should the Monarchy be usurped.

And then there is Iran and Israel.

Iran’s government seems quite stable, but its foreign policies extend (and meddle) well into the Middle East.  Experts claim Iran is pursuing centuries old Persian and Shiite aspirations. Iran’s fingers are in Hezbollah, Hamas, Yemen, and Iraqi’s Shiites goals. Iran is also engaged in negotiating a nuclear development agreement with the West. This agreement may come to pass or may continue to be drawn out while Iran continues its nuclear programs in secret.

Israel suffers from a different type of instability. Israel is a full blown democracy where religious interests continue to hamper a secular view of the world. As a result, Israel sees advantages is Egypt’s authoritarian government, is ambivalent over the turmoil in Syria and Iraq because it sees these situations as enablers for its ambition in the West Bank. But Israel’s largest concern is Iran and in particular Iran’s nuclear program. Negotiations with Iran is out of the question because Israel fundamentally does not trust Iran to keep any promise, as well as Israel is not keen on making any concessions itself.

Hmmm. Is that all on the foreign stage?

Don’t overlook China and its aspirations to regain the leadership role China played in South East Asia thousand of years ago. (India, Vietnam, the Philippines, Japan, and South Korea may take exception to this goal.) And who can forget about Russia and their aggression in Crimea and Eastern Ukraine. On one level, Russia can be said to be reliving its Eastern Europe role dating to back long before the Czars.

While the pundits may look for an over arching foreign policy, it is hard to see one. Prioritizing these situations might be more helpful and in the long term present a better chance for lasting solutions.

First, the Middle East is not the most important hotspot in the world regardless of the chaos taking place.

Second, Russia is significantly more important than the Middle East. Russia has a second rate economy but a first rate military with both nuclear weapons and the means to deliver them. Confronting Russian military aggression, which may become necessary, must be a last resort.

Third, China represents the most important place where American diplomacy needs to be placed. With 1+ billion people and the first or second strongest economy, China is going to become more powerful whether we like it or not. If you want fo think about doomsday, consider India has also 1+ billion people and nukes, Japan has a highly advanced technical and manufacturing infrastructure and is said could convert to a nuclear power over a weekend, and places like Vietnam, the Philippines, and South Korea are proud people who want to access minerals lying off their shores, these countries might be ready to fight for what they see as their rights.

But China represents something more. China has a lot to lose. China is now a very rich country after centuries of poverty. Under the motivation of not regressing, China could choose to exercise positive leadership including economic development and defense against rogue states in its region.

Similarly, Russia has both much to lose and much to gain by behaving responsibly on the world stage. Russia could also provide economic leadership through export of oil and gas, and security with targeted action against rogue regimes from India to Turkey.

I hope that President Obama sees the path forward as going through China (first), Russia (second), and then and only then through the Middle East. Of course both Russia and China may choose to pursue their own future vision.  And then what?

The alternative that peace is achieved in the Middle East (in some presently unknown manner) but relations with Russia and China sour. Are we better off?

Hmmm.  Better focus on those policies with the greatest potential payoff.

Year End In Sight

December 29, 2014

As the 31st draws closer, it is always useful to look at the past 12 months. What type of a year has it been?  What has gone well and what would we wish have gone better?  Should we hope for 2015 to be as good or much better than 2014?

If I were President Obama and I were reviewing 2014, this is what I would think.

I would think 2014 was a grind.  I would also think the outcomes were much better than the media was giving me credit for.

If I were a really honest Barack Obama I would be thinking of all the missed opportunities where I could have convinced Americans that the Administration and its policies were making life better for all Americans.

And if I did not cross my fingers and was straight honest, I would admit that I had blinked or hesitated too long at certain points and as a result provided political opponents ample opportunity to frame the public’s perception.

The nice thing about time is that given a sufficient amount, results become clearer and even the cleverest politicians run out of excuses. For 6 years the GOP has said “no” and denounced President Obama’s actions and policies. Their predictions of doom and gloom simply have never come true and instead, the American economy is steadily improved and now is the envy of the world.

Healthcare has improved access for many Americans.  There are signs that the out of control healthcare cost increases have been slowed. The national shame of Americans being denied basic coverage because they earn too little or are sick too much is still with us but the reasons and occasions  are fewer. The GOP claims of job losses and an upcoming “train wreck” were overstated and essential misleading.

Internationally President Obama can be satisfied that he has read the world situations mostly correctly.  He has followed policies (for the most part) that have kept Americans (most but not all) out of war. The President, however, can still improve his international stage speaking skills. He can do a much better job speaking to international nations. Like why lecture other countries about human rights when you can pick up any US newspaper and read about similar transgressions here. Have you consider the human rights aspects of dome strikes, or holding uncharged detainees for over 12 years, or the US domestic incarceration rate and its racial make-up?

But even more important on the international stage is the public versus private dialog. Making foreign country demands for delivery on the US 6 o’clock news is far less effective than sending messages through normal diplomatic channels. And generally speaking, making demands which have not considered correctly how the other country will respond is foolish. Bluffing with domestic politics is problematic but if things go wrong, the consequences are confined to the US. Bluffing internationally is quite a different story.

The President’s inner circle will continue to advise him and as in the past, President Obama will need to decide which set of advice to follow.  With reflection on these successes, he should be able to make good future decisions.

Next year, Cuba, Immigration and the Affordable Healthcare Act will attract much GOP attention. The President needs to resist the urge to slap down the GOP for their regressive ideas and instead defend his decisions with measurable predictions.

Time will again allow a period to assess the President’s policies at this next year or maybe the year after.

Federal Gasoline Tax – Missing An Opportunity?

December 13, 2014

Oil prices dropped this week to below $60 per gallon. Most people’s reaction might be summarized as “Hurray”! But, are we missing an opportunity?

The new lower price levels will bring a mixed set of blessings. Consumers will find more money in the their pockets at the end of the week, and in theory will have the means to spend it elsewhere. Local businesses are beaming with joy at the prospect of greater consumer shopping. But there’s more.

Airlines and large corporations in general see lower oil prices as helping their bottom lines.  In a free market, sooner or later, this increased profit should find its way to lower prices to customers.  Another plus.

On the other side, automotive companies who have spent billions developing new, more fuel efficient models are perplexed.  Lower gas prices could stimulate increased car and truck buying.  But, these auto companies have already sunk energy conservation investment in new tools, new engines, and in Ford’s F-150 case, new Aluminum sheet metal. These investments were premised upon a certain (and higher) gasoline price/gallon. Lower oil barrel prices fosters lower gasoline prices.

Auto companies worry that consumers may return to the power of gas guzzlers leaving their new gas efficient vehicles unsold.   Auto companies may fear they had invested too soon.

Adding to this, the previously booming “fracking” industry is wondering what has hit them. Oil at $60/barrel was not in their game plan. One by one these new drillers, shippers, and all their suppliers are getting the pink slips ready. Further exploration is out of the question for the time being, and continuing current operation is being questioned. Hmmm.

Back in the early days of the oil cartel, the Saudi head philosophically mused that any increase in oil price was a very serious matter and that any increase must be measured. New cartel members, on the other hand, wanted to raise oil prices as quickly as possible so that they could finance their local economies. Saudi Arabia often resorted to increased oil output to teach these greedy oil producers who was boss. The Saudis understood how complicated the world’s economy was and how mysteriously it was connected to rising oil prices.  Hmmm.

Today’s precipitous drop in oil prices seems at first wonderful to the consumer but it is likely to produce many unintended disturbances elsewhere. While the absolute price is important, it is the rate of change which could bring the greatest consequences.  How do companies plan for the future?

If the world were rationale, world oil output would already have been cut back. Oil price is simply the result of supply and demand. The world is not acting rationally because it has gotten fat on high oil prices. Low oil prices means far lower profits for all oil producers.

So what’s the missed opportunity?

The US could increase its Federal tax on gasoline. A twenty cent/gallon increase would be hardly noticed and would bring about $25 billion additional for use on roads and bridges maintenance.

The timing for a gas tax increase couldn’t be better. The GOP is against taxes and certainly tax increases but roads are deteriorating and bridges are decaying across the country. The recent lower oil prices is a gift for both political parties.

There is probably little chance Congress will recognize the early Christmas present sitting out there. Oil prices may continue to drop further ($50/ barrel is frequently hinted as the bottom). The 20 cent tax increase could go unnoticed (to the pocketbook) during this bonanza. With the world oil supply potentially so large, a return to $120+ oil price levels should be a long time off.

It’s time to fix our roads and bridges and those who use them should be paying.

Financial Amnesia

December 12, 2014

The House voted for a 1600+ page spending bill which would provide funding for most government operations through this time next year. One catch was that funding for Home Land Security was limited to two more months.

Far more consequential were the provisions increasing allowable campaign contributions and the repeal of a certain provision of the Dodd-Frank bill. Could this be a blueprint for how politics will be conducted next year when the GOP controls Congress?

While the increase in what an individual donor can contribute seems like pouring gasoline on an open fire, most likely this provision is more like using ones left hand or ones right hand to stoke the fire. There is already ample methods for funding political campaigns with ridiculous amounts of $$$. Winners are clearly the cottage industry set up around elections.

The Dodd-Frank issue is much more problematic. Big banking has grown so large and sophisticated that the notion that behind each new business or home owner stands a caring banker is a thing of the past.

For big banking, the commercial side of their business is a necessary nuisance. If big banks could acquire unlimited funds at low enough interest rates, they would dispense with checking and savings accounts and close their small business loan departments. Big banks are in the business of making big money. So what’s the problem?

The Dodd-Frank provision prevented banks from trading “account holders'” FDIC insured deposits for bank profits. Banks were still free to trade using their own money but not yours and mine.

As a consequences, banks could only undertake risky trades with retained profits.  For most people this was how the banking system was suppose to work.

Congress’ action now allows banks to trade using FDIC insured funds just as they could when foolish derivative trading lead to the near worldwide economy collapse. Maybe nothing will go wrong. Banks may have learned their lessons. Hmmm. Got any bridges for sale?

An omnibus spending bill is no place for either of these two provisions. Both changes should have been debated in sunlight and dealt with as separate bills. But that is for another day.

The House’s action involve political compromise overall. This provision may smell to the noses of those who favor bank regulations but other parts of the spending bill were just as abhorrent to other members.

It is just hard to believe that tax payers around the country had written their Congress members demanding Big Bank relief from Dodd-Frank. I wonder who pushed for these changes?