Posted tagged ‘Wall Street Journal’

Worrisome People, Worrisome Proposal

June 23, 2017

On June 21, 2017, Dick and Liz Cheney penned an op-ed article in the Wall Street Journal. The subject, “Congress and Obama Depleted the Military”. Catch your breath, the Cheney’s are back and just as sure they are right again.

The article points to 8 years of President Obama and 6 years of Congress’ Budget Control Act as the prime culprit behind a “sagging” US military. One might think there has been a time warp or a cerebral malfunction since the Cheney’s seem unable to recall relevant history and Republican involvement. I wonder why?

The Budget Control Act stems from a partisan budget and deficit standoff. Congress’ inability to pass any budget and facing a Government shut down, prompted Congress to pass legislation which said in the event of budget cuts, these cuts must be done proportionally across all budget items including Defense. Noteably this Act only applied to “discretionary” items omitting Medicare, Medicaid, or Social Security. Conservatives have howled about this agreement for the past 6 years.

We should recognize that US Defense spending amounts to almost $600 billion each year, several multiples of any other country and roughly 1/3rd of the worlds total. Recognize also countries such as China and Russia, combined are only a third of the US expenditure. So assume for a moment, the Cheneys are correct in pointing out deficiencies in the US Defense position, one ought to first ask how is that possible with so much total spending?

The Cheney’s appear conveniently forgetful that it was none other than Vice President Dick Cheney who got the US into nation building in Afghanistan and into a failed invasion and occupation of Iraq.  Most estimates put both of these endeavors’ cost in the trillions of dollars level.  Both of these ventures have yielded none of the promised goals.

The Bush Vice President, more than anyone else is responsible for the wheels coming off the Middle East wagon and creating a power vacuum which is consuming our military’s time and resources. But sometimes people forget those things that don’t support their current agenda.

Today’s world is a different place from 2004 when the US invaded and occupied Iraq. China has become a formidable military force and shows little signs of ceasing its military growth. Russia, also a nuclear country, is stronger and more focused under Vladimir Putin than it was in 2004.

The US should rightly be concerned about security concerning both of these countries. But the answer can’t be simply to rebuild the traditional armory (ships, planes, troops) and think China and Russia will be intimidated.  What about cyber and space warfare? The US must get smarter and while maintaining strength, must use foreign policy, economic influence, and diplomacy to greater degree.

And I wonder if the Cheney’s are aware that the Trump Administration has proposed sharp cuts in State Department funding? Do the Cheney’s realize that the Trump White House has threatened more than once to use trade as a negative foreign policy tool? Trade restrictions, historically, has been one of the fastest ways to generate armed conflict.

The Cheney “op-ed” piece is a thinly veiled attempt to promote Ms Cheney as a tough conservative who needs to be considered for future positions of greater responsibility.

Hmmm.

If this happens, Americans should expect Dick Cheney 2.0 and advance Ms Cheney at their own peril.

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Ruppert’s Rage

July 6, 2012

Most voters do not read the Wall Street Journal.  Most do not know that Ruppert Murdoch owns the WSJ.  So who should care what Ruppert Murdoch says about Mitt Romney?

We all should.

Murdoch, through the WSJ editorial page, is saying what hard core conservatives feel.  First, they don’t like Romney as a person.  He is too vanilla and not boldly painted in red, white, and blue.  Second, they think he has no rudder and will decide upon issues important to these conservatives in ways they cannot predict.  The second point, more than anything, is the real source of discontent.

What does this mean?

In simple terms, big conservative money interests want the President to set a business and finance friendly course.  They want this course to heap favorable tax treatment upon them and enable them to amass even more money.  In short, they want a desirable policy course and no variations regardless what the populous fervor because this allows them to make business bets with confidence that government policy won’t undercut them.

Predictability, that is what it is about.

Consider the most recent GOP Presidential years.  “W” policies followed roughly the conservative script.  Regulatory agencies either were lead by incompetents or were charged to look the other way.  It took 8 years before regulatory agencies enabled an out of control Financial Sector’s (banks, hedge funds, and investment houses) collapse and nearly sent the world in a depression.

To the conservative community, no one wanted the financial sector collapse, especially those well connected.  Never the less, this banking disaster was an opportunity for some to make a lot of money.  While pension funds, 401Ks, and individual mutual fund owners lost significant amounts of their investments, those few in the know made a bundle.  That’s what makes America great conservatives think.

Murdoch’s rage suggests he is trying to get Romney’s attention.  Murdoch’s goal might be to force the replacement of Romney’s key advisors with those more inclined to think like Murdoch, select or least get a veto right to Romney’s VP pick, and subsequently to name key Romney cabinet members.  In short, Murdoch, speaking for the big money conservatives, wants more control.

Romney may be all the qualities that Murdoch fears and loathes, but Romney is not stupid.  Romney’s advisors have played a cynical but opportunistic game picking their way through the GOP primaries promising to the bible toters (who Murcoch also detests) what ever they want to hear.  The Romney team has shown it is willing to say what ever is necessary.

The irony is that even if Romney was a Murdoch type of guy, his policies would be just as shallow and doomed to fail the American people.  Think about these positions

Massachusetts’ health care is a mandate, not a tax… ACA is a tax, not a mandate?  What is the difference?

Repeal and Replace ACA but Romneycare would have no pre-existing condition clauses… and it would cost Americans less?  How would Romney pay for this?

Repeal Dodd-Frank and believe the big banks won’t do it again?  Does he need more reminders than the recent JP Morgan $2+ billion loss?

Reduce taxes and the deficit…  math does not work.

Self deport as a solution for illegal immigrants… with 11 million already here?

Cut government spending while increasing defense spending?

President Obama has not been a tower of success or offered motivational leadership.  He has not outlined a clear and compelling vision of a comprehensive (and affordable) path forward for America.  After have promised much in 2008, he has much less to show for his efforts.

President Obama has been, never the less, far more a centrist than a progressive ideologue.  Maybe center left best describes him.  He has been professorial and too much of the time has not evoked the spirit of “let’s have a beer together”.

President Obama, also, has a far more coherent story than the GOP or Mitt Romney.  The Obama Administration’s record is far more positive and fair for all Americans than George W Bush’s years.  The only question left is will Obama get only one term or two?

The Wall Street Journal editorial page’s rage against one of it own fellow travelers raises big red flags about what the conservative moneyed interest really want.  It is time for independents and Democrats to wake up to what these developments could mean.

It may be no longer about “We The People…”

Economic Freedom Agenda

February 28, 2012

Rick Santorum, in an op-ed column in Monday’s Wall Street Journal, has performed a worthwhile service for the American people.  He laid out his economic plan if elected President.  This is a sound basis for assessing the policies a Santorum Presidency might bring.  He is due credit for making this statement.

Over the next days or weeks, pundits will do the math and see if Santorum’s proposals add up.  For example, how much would two tax brackets (10% and 28%) produce in tax revenue, and does this look like enough tax revenues when coupled with his other proposals.  Unspecified is how Santorum would treat dividend and capital gains and whether the Mitt Romneys of this world will continue making millions and paying only 14% or less.  This will become clear as the press asks more questions.

The same questions would apply to a corporate tax rate of 17.5%.  Does this eliminate all the current deductions and are there any new deductions that would flow preferentially in corporations direction?

Sanotum promises to reign in spending by cutting $5 trillion over 5 years.  Directionally this is fiscally great.  Unknown is where Santorum see this $5 trillion coming from?  He speaks of putting Social Security and Medicare on a financial sustainable path.  This is certainly necessary but just how would Santorum do this?

Santorum also promises to revive housing.  Strangely he proposes eliminating Fanny Mae and Freddie Mac, and allowing families who houses are underwater to deduct losses from the sale of their homes (in order to get a fresh start).  There certainly are good reasons to question Fanny and Freddie, and maybe even eliminate them.  But there seems to me no connection with doing that and reviving the housing market.  Eliminating Fanny and Freddie will make it harder to get mortgages, not easier.  The deduction of losses from sale of underwater houses, however, is a creative idea and should be considered.  Since there are no free lunches, Santorum needs also to think through how this benefit will be paid for given all his other tax cuts.

I applaud Rick Santorum for publishing this summary.  With some further analysis we will know if this is “a chicken in every pot” or some very positive and constructive proposals.

The 20-20 Rule?

February 14, 2012
President Obama released his 2013 budget proposal and to no ones surprise the deficits continue as far as one can see.  Although the President does propose some tax increase, these increases are insufficient to offset the continued parade of government expenditures.  What we end up with is a $3.8 trillion budget accompanied by a $900 billion deficit.
Using Wall Street Journal figures (which were based upon OMB data), we can see on the left side of the following chart government figures and on the right, “what if” figures:

This chart says that if we were to set a spending target at 20% of GDP and a tax revenue target of 20%, we could balance the budget.  This implies that 2013 spending would need to be reduced further by $540 billion and tax revenues would need to be increased by $360 billion.  Straight math.

Consider also that Social Security coupled with Medicare/Medicaid spending account for a whopping $1.6 trillion (out of the total $3.8 trillion budget).

If we subtract the approximate $1 trillion in SS and M/M payroll taxes, one can see that these two programs account for over $ 600 billion of the estimated $900 billion 2013 budget deficit.

Job #1, fix Social Security and Medicare/Medicaid.

The remainder of the budget, $2.2 trillion contributes $300 billion to the 2013 deficit.

Job #2, separate the issues and fix the rest of the spending.

Social Security and Medicare/Medicaid represent special government promises.  The numbers clearly show that as currently structured these programs will go bankrupt.  Clearly we must revisit these programs and decide whether the next generation should receive the same promises from the government.  If so, increased taxes seems inescapable.

If not, why not?

A very good argument for making some changes might be that Social Security was meant for workers who lived only a relatively short time after they retired.  Today with life expectancy approaching 80 years, collecting Social Security for 25 years or more will need a different funding basis.  Means testing and increased payroll taxes could easily fix Social Security and allow the Country to keep its promise to those who depend upon Social Security.

Medicare is also a promise made to seniors.  Medicare promises that health care would be available to them in their years of fixed income.  Unfortunately, health care costs have sky rocketed and the pay roll taxes are woefully short of meeting expenditures (not to mention the payroll tax was reduced to help stimulate the economy.  Rob Peter to pay Paul?).

Again, means testing coupled with sharply higher payroll taxes can go a long way to fixing this.  Medicare costs could be moderated even further were the country to address the overall US health care delivery system.  The best path forward will include higher payroll taxes, more costs shifted to recipients, and a broader fix to the nation’s health care cost in general.

Medicaid is a social expense.  It currently covers the medical costs of those who cannot afford to pay themselves.  Society’s goal ought to be to have those in need of Medicaid at zero.  Before that point, however, Medicaid is either whatever Medicaid costs or the results of Federal-State cooperation to both lower those in need and to lower the cost to serve.

The rest of the 2013 budget, some $2.2 trillion covers everything else.  Finding $300 billion (13%) in savings or revenue increases seems to me an extremely straight forward task.  Of course, if it were politically so straight forward, there would be no need to write this post.

Cutting funding for Education or Agriculture or Defense for example is quite different conversation than changing the promises around Social Security, Medicare, and Medicaid.

By breaking the overall budget into pieces, we can gain focus and clarity of purpose


Do You Hear The Drum Beat? What Does It Mean?

February 4, 2012

News reports this past week in both the New York Times and the Wall Street Journal have reported ominous news about Iran.  One report said Iran “operatives” might strike American interests overseas and even within the US boarders.  Another report described the recent disaster at an Iranian missile development site.  According to Israeli sources this week, the site was developing missile which would have had an effective range of 6000 miles.  That would be enough to reach the US mainland.  What’s behind these reports?

A few weeks back reports indicated that Israel felt the time was now to strike preemptively.  Their targets would be suspected Iranian nuclear development sites.  This week’s headlines read, “Iran authorizes help for al Qaeda” reporting that Iran had released a number of senior al Qaeda leaders.  The report suggested Iran had given assistance (money and weapons) to these radicals and implied pointed them in the US’s direction.  What are we to make of this?

For sure these reports could be simply what they literally say.  They are just reports.  They are speculation regardless of their sources. Or, could there be more?

Iranian Government officials, of course, read US newspapers.  Could it be these are articles planted for Iranian consumption?  Could the US be thinking that sanctions coupled with this “we know what you are doing” message just like in the run up to invading Iraq, that Iran would modify its behavior?

More frighteningly, could these drum beats be the real warm up for a new invasion?  Could the Obama Administration be willing to play with fire?  Spreading the word about Iran’s threat and using it to build fear within Americans?  Fear is perfect for asking for war powers.  It has also been a useful tool to reelect a President.  Hmmm.

Personally, I am reluctant to believe President Obama would stoop to fear mongering tactics to get reelected.  Who knows?

We do know Iran is a bad actor in the Middle East neighborhood.  A nuclear Iran with 6000 miles rockets represents a threat to a lot more than just the US.  This type of threat provides only the faintest of rational reasons for the US to be stoking the fires of war.  For Israel, however, the danger is much closer and potentially far more deadly.  These recent reports do have the touch of Israel’s hidden hand.

Actively taking steps for an Iranian invasion is not the answer.  Events could push US actions over the edge.

The President’s stated position that the US will protect Israel if it is attacked is one that previous Administrations have held.  It seems reasonable and justified.  A missile or worse, a nuclear attack on Israel will bring a quick end to Iran and they know it.

The wisest US set of tactics are the ones now in play.  Push for world consensus.  Strangle Iran with financial sanctions until its policies change.  As with the cold war, no bullets need to be spent.  Running out of money will ultimately change the mind of a country with no natural enemies remaining.  Running out of money will speak louder than Allah.

Another Apologist

June 2, 2011

Michael Hayden, the former NSA Director, and most recently CIA chief, has stood up to be counted on the value of enhanced interrogation.  He did so in the June 2nd edition of the Wall Street Journal’s opinion page.  Why he feels it necessary to discuss an area where silence is the norm is hard to say.  One is left, however, with the inescapable feeling that those who participated in this dark phase of US policy don’t want public opinion to settle on the side opposite them.

Hayden had a distinguished career in the air force, and then served as CIA Director until the end of the Bush Administration.  He inherited the enhanced interrogation methods as well as all the post 9/11 world mess.  They did not happen as a result of his watch.

So, it is a bit surprising that Hayden wants to get down in the gutter now.  The efficacy of the US enhanced interrogation methods is pretty much unprovable.  That is the nature of intelligence gathering.  It is never absolutely certain what any source has said is true or even close to true.  Why Hayden would want to claim techniques banned by international treaties have a place in the US procedures manual is mind bending.

Like most of the George W Bush Administration who have already spoken out, the easiest explanation is Hayden also wants to rewrite history.

Hayden now joins a very special group.  Paul Wolfowitz, Douglas Feith, Jonathan Yoo, Donald Rumsfeld, Dick Cheney, Karl Rove, Laura Bush, and at times, even “W” himself have written books and/or issuing press releases.  They present history quite differently from fact.

Enhanced interrogation methods were (are) wrong even if they were to produce actionable results.  There is an aspect of governance called “tone at the top”.  If the tone at the top treats some people without respect for their humanity, their organization will take this as a signal that this attitude can be used widely.  Bad things happen even when no officially sanctioned then.

The entire Bush Administration projected this attitude.  The Bush subordinates were above questioning. From the unnecessary (if not illegal) invasion and occupation of Iraq to the wanton disregard for the proper use of regulatory controls (and the subsequent financial sector melt down), “W’s” team got it wrong every time.

Director Hayden is smart enough to know this and would have done himself a favor had he kept his writing skills to a memoir much later in life.

Why I’m Fighting in Wisconsin

March 11, 2011

With this headline, Wisconsin Governor Scott Walker introduced his “Opinion” article in yesterday’s Wall Street Journal.  Finally, we were all going to know why the Governor chose to try and bust the public sector unions in his efforts to balance the Wisconsin budget.

Walker told us about a young teacher in Milwaukee who after winning the State First Year Teacher Award was laid off.  The reason was union rules mandating seniority, he said.  How can that be fair?

The Governor also pointed out that he wanted State workers to contribute more to their health insurance and pensions.  In comparison to private industry, he said, this was quite reasonable.  So this is why he is fighting for Wisconsin.

Even though pay and benefit concessions from State workers will not fix the budget problems alone, most of Walker’s financial requests seem eminently reasonable considering the times.  In fact, Unions have been woefully remiss in not stepping up sooner and offering to renegotiate.   But that has little to do with “how” Governor Walker is fighting.

The Governor is using bully and sneak attack tactics, and jumped into the gutter even before the Union could get there.  (That is really an accomplishment.)

The Governor ought to be the leader for all residents.  Of all people, he should use the most above board strategies and tactics, with transparency of the process a first priority.  He is the State’s top elected official.

The Governor could have campaigned upon the principle that he would seek the end of collective bargaining and a reduction in pay and benefits when he was running for office.  The Governor could have invited the unions to the negotiating table and introduced his set of demands (along with the rational of why they were necessary).  The Governor could have pursued these negotiations to conclusion or impasse.  If impasse occurred, the Governor could then have gone to the Wisconsin voters and told them, “you know my position from the campaign, I have tried to reason with the unions, they are adamant and will not move, I have bargained in good faith and now I will impose a solution, there could be a work action so I want you to know why”

What Governor Scott has really told everyone in Wisconsin is process does not matter.  He has also told Wisconsin residents be prepared.  This man will throw the first punch and do what is necessary to achieve his own ends.  Most importantly, everyone should realize that the Scott’s of this world apply this approach on everything they believe in.  After State workers, it could be treatment of minorities, the poor, women, or any other personal freedom issue.  It could also be your health care.