Final Thoughts for Now

This is the final installment of this blog for now. I found the process of writing it very helpful in terms of reaching a new place in my thinking. Other commitments, unfortunately, do not leave me the time to continue. I do hope to get back to it some day. Here are two final thoughts.

1) The fundamental problem with our democracy is that the citizens have allowed paid operatives to speak for them. These paid operatives are motivated by their need to make a living, not by the needs of the citizens they pretend to serve. They buy and sell anger and mistrust. We can't sit back and allow them to dominate our conversations. 

I'll give my favorite example: Tony Perkins, President of the Family Research Council. He happens to be part of the right-wing propaganda machine, but I'm sure my Republican friends can provide examples of left-wing operatives. Tony Perkins spent four years representing Louisiana in the U.S. House of Representatives. From there he moved on to lobbying, by getting hired to head the Family Research Council.  He now makes a handsome living recruiting conservative Christians for the Republican Party. He totally mis-represents the positions of those, like me, who disagree with him. He is a person with whom I can have no political conversation. Neither can I have a conversation with anybody who makes use of his talking points. 

I attended two family reunions this summer where individuals of very diverse political orientations were represented. I have no doubt, whatsoever, that we could have constituted an effective congress. We may not have been able to reach agreement, but we would have ended the conversation respecting each other's opinions.

2) Global warming is taking place. The struggle against it will be the great struggle of the generations immediately following the baby boom generation. The situation today vis-a-vis the pending catastrophe of global warming is similar to that of the late 1930s vis-a-vis the pending catastrophe of World War II.  Like WWII, it seems that it will require a Pearl Harbor type incident to bring the Americans into the war. And like World War II, the future climate war has the potential to heal our economy. The sorrow is that our political system is incapable of engaging that struggle now, before the great turmoil begins.

Renewable Energy Means Jobs! Jobs! Jobs!

The following is taken from an editorial published by the Plain Dealer written by Myles Murray, a doctoral candidate at Case Western Reserve University's Solar Durability Lifetime Extension Center:

"Recently, a world record was broken during two unseasonably sunny days in Germany when solar power generation provided as much electricity as 20 nuclear power plants running at full capacity. This remarkable event has been generally over-looked by both regional and national media and policy-makers. This solar-power generation accounted for 30 percent of total German electricity consumption on May 26 and 50 percent on the following day. This is a truly remarkable feat, especially considering that Germany gets 30 percent less sunshine than we do here in Cleveland, and less than half of that in many places in our country."

I'll take this opportunity to recommend a book: The Third Industrial Revolution: How Lateral Power is Transforming Energy, the Economy, and the World, by Jeremy Rifkin. To be honest, this was not a fascinating read.  But the fundamental idea is vital to understanding where we are in terms of energy policy.  1) Carbon based fuels are in the process of being phased out.  It is already happening and not because of the environmental movement. It is happening because a billion Chinese and a billion Indians are becoming part of the industrial world. I heard a gentleman on the radio telling how 10 or 20 years ago, the Chinese built an 8-lane outer-ring highway around one of their major cities. The first few years there was only a trickle of cars. Today, the highway is bustling. The rural masses of China and India are getting industrial jobs and buying cars and using electricity. The cost of carbon-based fuel will inevitably become more expensive than the cost of renewables. 2) The transformation to renewables will bring about a return to full employment. One of the arguments now against renewables is that the infrastructure is lacking. But if you look at it differently, this problem is our great opportunity. The building of the lacking infrastructure will bring about full employment. Today our government and our country are investing in expensive, and very dirty forms of carbon fuels: digging up forests to get at the tar sands, blasting to pieces the underground shale to release natural gas, blowing mountains apart to access coal. The number of new jobs created is minimal, since the goal of those industries is to make big profits while minimizing investment. The Tar Sands of Alberta are a typical example. The forest is destroyed and the tar sands turned into a sludge. Then the sludge is piped to already existing refineries in places like Louisiana. When petroleum was a new concept, in the 1920s, its development created jobs across the economy. Refineries were being built. Scientists were employed developing new products based on petroleum. The car industry was developed, which in turn spurred the growth of the steel industry. The same will happen when we finally move our investment to renewables. New industries will spring up everywhere, and if it is managed right many of those industries can be new family businesses. Imagine companies installing solar panels on homes. Electricians working on the electric grid. Scientists and technicians perfecting the solar panel technology.
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Secret Campaign Spending in Wisconsin

The June 5 Wisconsin Recall Election was a sobering illustration of the role of money under the current election regime. I’ve copied an interesting excerpt from Democracy Now, June 27, 2012, featuring two contributors to Mother Goose Magazine: Andy Kroll and Monika Bauerlein.


The major issues of interest to me: 1) State politics has increasingly given way to national politics. Most of the money pouring into the Wisconsin election came from outside of the state. This is a national pattern of grave consequence. 2.) Almost all of the money is spent on television, which requires us to consider what it means when the role of the citizen is reduced to evaluating television. 3) The money being spent by the extremely wealthy is not, in general, very much for them. In 2011, Koch industries is said to have had an annual revenue of just under $100,000,000,000.  If they give .1% of that to a political campaign, that would be 100 milliion, more than was spent on the entire Wisconsin recall election by both sides. If the average American citizen has a revenue of $50,000 and gives .1%, that would be $50.

The interview below can be seen online at: http://www.democracynow.org/2012/6/27/dark_money_inside_the_final_frontier

AMY GOODMAN: Let’s stick with the Wisconsin recall election earlier this month, the most expensive in the state’s history, with more than $63 million spent. Governor Walker, who survived the recall, outspent Milwaukee Mayor Tom Barrett seven to one, close to eight to one. I want to turn to an ad that was bankrolled by this secretive Virginia-based organization called the Coalition for American Values.

KAREN: I didn’t vote for Governor Walker.
LINDA: I did not vote for Scott Walker.
TIM: I didn’t vote for Scott Walker, Joel, but I’m definitely against this recall.
JIM: Recall isn’t the Wisconsin way.
KAREN: There’s a right way. There’s a wrong way. And I just—I think this is the wrong way.
JIM: I elected him to do a job.
BOB: Let him serve it out.
BOB: Living in a democracy, you have to have faith in who the people elect.
CHAD: I didn’t vote for Scott Walker, but I’m against the recall.

AMY GOODMAN: I mean, this is an ingenious ad, because I’m sure they did some kind of focus groups or polling, and they saw that Walker was not popular in Wisconsin. But they realized they could raise the issue of the recall being undemocratic. You know, there was an election, someone was elected, let him serve out his time. Andy Kroll, talk about who it was that bankrolled this.
ANDY KROLL: I wish I could tell you exactly who it was, because I—but I still don’t know. The group behind it was called the Coalition of American Values, which it does really not get more generic than, I guess, Americans for a Better America. What I found—so this ad comes out. As you mentioned, it really does have a potent message. And in retrospect, you know, or in hindsight, we now know that it was incredibly potent, because exit polls showed that a lot of the people who voted for Walker were really voting—you know, were voting on discontent over the recall itself. So, I start digging into this group, find that their address in Milwaukee, in the state, is a mailbox, essentially, and that their office—they have another office in Virginia, and that’s a UPS store box. And so, there is no home address or home office. The treasurer, as far as I could tell, and we could never actually pin this down, was a gentleman named Brent Downs, who appeared to be a recent graduate of a university in Milwaukee, didn’t answer phone calls, didn’t reply to emails.
And what brought them to my attention was not only were they running this ad and spending six figures on this ad around the state, they had not filed a single report with a state disclosing their spending. I mean, it’s one thing to just funnel money through an incorporation—an incorporated entity in Virginia into Milwaukee, into Wisconsin, and not tell us where your money came from, and they can legally do that with the weird way that campaign finance law works in Wisconsin post-Citizens United, but we also had no idea what they were spending. And I raised this with the elections watchdog in Wisconsin. And not only had this group not disclosed its donors, but they had not even filed a report on their spending, as required. This is what brought them to my attention before the election. They said they were going to fix it. They still hadn’t.
And so, what you—you know, the takeaway here is you have Wisconsinites who are completely in the dark about a group called the Coalition for American Values, running ads in their state, telling them that this recall is bad; not only do they not know who the donors are, based on our tattered campaign finance system, but they also don’t know how much this group is spending, really, and where, as the group is required to disclose. And so, it was just a—it was a really, really disturbing glimpse into how dark money can come into a state election and put out this message, and surely have an impact on voters, and keep those same voters entirely in the dark about how much is being spent, who’s spending it, and just who the heck is behind this group in the first place.
AMY GOODMAN: Andy Kroll, reporter for Mother Jones magazine, and co-editor Monika Bauerlein. Andy’s new cover story is called "Follow the [Dark] Money." We’ll continue our conversation after break.

There is presently an act in congress, the Disclose Act, that would require that the the true and complete identity of the authors of political ads be made readily available to the public.  Our congress has so far refused to pass it.

Can We Compare the U.S. Government to the Catholic Church?

At the City Club of Cleveland, Peter Borre, Co-Chairman of the Council of Parishes, discussed how the Catholic Church responded to its financial crisis with austerity.

The Catholic Church’s financial crisis originated with the clergy sex abuse scandal. It is estimated that over the past 15 years, the Church has paid out between 3 and 4 billion dollars. This has devastated the dioceses of Boston, Cleveland, and appears currently to be hitting Philadelphia.

Given a major cash shortage, there are two logical ways to respond. The first alternative is to engage in austerity. You can reduce your expenses by downsizing. The second alternative is make up the cash shortage in some way: taxes can be raised, donations solicited or loans taken out. The American Church, under its American leadership, has chosen austerity. In Cleveland, the Church leadership chose to close 12 local parishes.

The United States government has also chosen austerity, as has Great Britain and the European Union. Responding to a financial crisis by reducing expenditures leads to the reduction of income, which leads to more reduction of expenditures. It’s a downward spiral. As the old saying goes: "You have to spend money to make money."

Why did the Church choose austerity? Here we must distinguish between the truth and the propaganda of the leadership.  The leadership pointed to demographics, the shortage of priests and the shortage of cash. According to Borre, however, the demographic argument is simply false. There has not been a decrease in the population served by the 12 parishes. As for the inability to recruit new priests and the shortage of cash, they are both the result of the corruption of the current leadership.

What could we expect from an assertive, positive, talented leadership, responsive to the needs and wishes of its membership?  Instead of seeing decline as inevitable, it would see that the demographics are positive and that the replacement of the current leadership with a new leadership committed to growth would bring about a dramatic influx of donations and a dramatic improvement in its ability to recruit priests.

Can we compare the U.S. government to the Catholic Church? Yes and no. Today, the United States, and much of the world, are suffering from a financial crisis brought about by the mismanagement of its leaders. Our political leaders have sided with the corporate power brokers of our political and financial systems and present austerity as a moral positive. In the same way that the Catholic Bishops put their religious careers ahead of the interests of the Church, we have a political leadership which puts the winning of elections ahead of the needs of the country. What is needed in both cases is a new leadership, responsive to the needs of its members and citizens.

The case of the Catholic Diocese of Cleveland provides some grounds for optimism.  The Vatican has responded to the outrage of the people by ordering that the 12 closed Cleveland parishes be reopened. According to Borre, this response is unprecedented in the history of the American Catholic Church and is clearly meant to send a message condemning the American Church leadership. So chalk one up for the citizens, in opposition to corrupt leadership.

Unfortunately, passion for political change in America seems limited to the fringes: the Tea Party and Occupy Wall Street. The great majority of Americans are watching politics on television, rooting for their team, disappointed in how poorly they are playing, but a win is a win.

Beyond the Two Political Parties

Since it began a little over a year ago, the perspective of this blog has changed.  In the beginning, it was motivated by a very belated, sudden realization of how bad the Republican Party had become. Before I first realized it, this had already been the case for a number of years. It was like I had been asleep, thinking the Republicans were still a political party which independent, fair-minded people could and should consider voting for. Even if I didn’t agree with many of his policies, Ronald Reagan deserved my respect as a citizen and a patriot. George W. Bush, on the other hand, and the entire Republican Party today, are not citizens, but political operatives guided by an agenda which has proven to be extremely marketable, but which their own voters would not support if they truly understood it. This is still my conclusion and a very important part of what I do in this blog. What has changed, however, is that I no longer believe that the Democratic Party can be counted on to defend us against that agenda.

Republican propaganda is based on a simple notion: “government” is bad. Their use of the word “government” is intentionally vague, but I think it fair to say that what is being attacked is the modern welfare state: the notion that the state should “assume primary responsibility for the welfare of citizens” (American Heritage Dictionary).  The major achievements of the welfare state include such things as Social Security, Medicare, Medicaid, but it also includes unemployment insurance, public education, firemen, policemen, disaster relief, protection for the environment, public works, assistance to certain key industries and, of course, direct assistance to the destitute, which is only a very tiny fraction of what the government does. Republican propaganda puts forth a plethora of theories, which my Republican friends espouse, supporting the notion that the people would be better off with greatly reduced government. Underlying it all is the idea that the welfare state is wasteful and that it transfers money from those who work towards those who don’t. Anger over this is what drives their voters to the polls.

Like the Republicans, the Democrats are political operatives, but they do not meet the anti-government passion with pro-government passion. It’s like the modern corporation which buys a traditional product label hoping to retain the customers of the old product while appealing to new customers unfamiliar with it. The Democratic Party of Clinton and Obama makes use of the Democratic label of the Progressives, FDR and LBJ, but it doesn’t seem to believe the old product is marketable. Indeed, it frequently reaches across the aisle to integrate Republican propaganda into its messaging. Someone has told them that “reaching across the aisle” contrasts nicely with the anger driving the Republican voters and is therefore, itself, very marketable.

In his autobiographical book on his years in the Clinton administration, Robert Reich tells how Clinton used political marketing experts to decide whether to sign welfare reform and to support an increase in the minimum wage. Similarly, we see Obama waffling around issues such as approving the Keystone XL pipeline until it becomes clear which position will be the easiest to sell. For passionate liberals, the Keystone XL pipeline debate is whether we should be exploiting the Tar Sands of Alberta, Canada, one of the dirtiest fossil fuels in the history of the world. For Obama, it is about distancing himself from any discussion of global warming, without losing the support of his base.

If you want to read a powerful, and passionate defense of liberalism and the welfare state, I recommend Jimmy Carter’s indictment of the George W. Bush administration: Our Endangered Values: America’s Moral Crisis (2006). When he was elected in 1976, I considered Jimmy Carter to be only moderately liberal, but the contrast between the passion of Carter and the embarrassment of Clinton/Obama is remarkable.

So, today my blogs tend to be of two types. In the first type, I explain why no one in their right mind would ever vote for a Republican. But in the second type, I leave that completely aside, because many people who are passionate Republicans suddenly start passionately agreeing with me when I say that both parties have betrayed the American people. The future lies in a movement of the people which will reform the political system.

Taking Care of My Garden

In Candide, Voltaire, French eighteenth-century author, tells of a naive young man who is required to travel the world due to unfortunate circumstances.  He was raised with the optimistic premise that human beings are governed by their common sense. But as he travels the world he constantly sees things that just make no sense.  Principles, which proclaim to serve the good of all, obviously serve only the few, or in some cases lead to the doom of all. When he asks why people would behave in a manner which is causing pain and sorrow for all to see, they explain to him the necessity of adhering to principles. 

I relate to Voltaire in a couple of ways.  First, I share the commitment to rejecting principles when they are contradicted by reality.  Secondly, I share the frustration with people, and it often seems to be most people, who seem so oblivious to the reality which seems so obvious to me.

In the end, when the character named Candide, arrives back home, he resolves not to concern himself with fixing the world, and to just focus on his garden. The peace one gets from working in the garden is the ultimate contrast with the nerve-wrecking frustration of a political conversation. Of course, the garden is a metaphor for family, friends and the things intimate to you. 

Obama, Drones and the Tragedy of U.S. Foreign Policy

It was reported this week that Hugo Chavez, president of Venezuela, is going to purchase, for defensive purposes, drones from Iran.  I’m not going to discuss the coherence of Chavez’ statement or policy.  What interests me is a continued pattern by which American foreign policy has turned into an international tragedy.

We fought two world wars against the Prussians, the Nazis and the imperial Japanese, in which it was generally recognized throughout the world that the U.S. entered the war in defense of the sovereignty of all nations. The U.S. said “no” to the Nazi idea that it was the prerogative of the most powerful to shape the lesser world to its own vision. The beauty of it was that the U.S. was the most powerful, but used that power in defense of the less powerful.  (I intentionally avoid the use of “international law” language, which would be entirely appropriate, except that all kinds of ideologues have infested that language with notions that are entirely alien to me.)

With the demise of the Soviet Union, the United States became the world’s only super power.  There was reason to hope that the ideal of respect for the sovereignty of other nations would enter in to a golden era. That hope was clearly on display in the days following 9/11. The bombing of the world trade center was  seen throughout the world as a criminal assault on the very notion of international respect.

No need to belabor the topic of W Bush’s Iraq war.  The world was very nearly unanimous in judging the U.S. invasion to be counter to the notion of international sovereignty. Bush’s own apologists did not argue the point, articulating the concept of a “just” “pre-emptive war.”  Basically, they argue that it is ok to unilaterally attack a foreign country, even if nobody agrees with you, as long as you know in your own heart that it is right.  The trouble here is that nothing any longer distinguishes us from the Prussians and Nazis when they attacked France in 1914 and again in 1940.

The Bush administration went on to articulate a number of policies based on the idea that the relation between nations is not or should not be based on moral considerations. Our Founding Fathers in the Declaration of Independence spoke in terms of “all men,” yet the Bush administration repeatedly acted on the belief that American power protects Americans, and that nothing should prevent Americans from torturing foreigners or holding them in prison for a decade without granting them any of the rights embodied in our Constitution.

This gets me back to the fact of Cesar Chavez investing in drones. Under Obama, the U.S. has engaged in a policy of using armed drones to assassinate political opponents residing in foreign countries.  There is no legal process by which these people have been convicted of any crimes. And it is clear that no American would accept Iranian or Syrian drones flying over New York City to assassinate Syrians living in the U.S. or American opponents of Syria.  The U.S. is engaged in a policy that it would accept from no one else. This has also been the case with regard to the development of nuclear weaponry and weaponry to be used in outer space.

And this is the tragedy of American foreign policy since 9/11. Instead of using our power to support norms of conduct between nations, we are using it in  away which undermines those norms. The end result is a more violent and unpredictable world.

Jim Wallis on the Moral Decline of American Democracy

On April 26, Jim Wallis, President and CEO of Sojourners Magazine and author of God's Politics: Why the Right Gets It Wrong and the Left Doesn't Get It, appeared at the City Club of Cleveland (can be heard at www.cityclub.org.) I felt very thankful to him for giving expression to some ideas in which I believe deeply and which are too rarely discussed.

1. "The common good has almost disappeared from political life on both sides."  Lincoln's Gettysburg Address concludes with a reference to "government of the people, by the people, for the people." The word "republic" comes from the latin res publica, meaning "the public thing." The Greek word for politics: polis, refers to citizens to deciding together what to do.  Our representatives are supposed to gather in Washington, as the founding fathers did in Philadelphia, to deal with the common concerns of the citizens.  They are supposed to establish laws, and today we can all agree that they should repare flawed and inappropriate laws. Today, and at their best, representatives fight to enhance the power of their constituents and look upon those who disagree with them as opponents to be destroyed.  Wallis tells how congressmen no longer even speak to members of the opposing party. At their worse, the sole purpose of our congressmen is simply to be re-elected.

2.  The American citizen has been turned into a consumer.  He does not participate in the development of public policy.  He is a spectator who is expected to choose between various perspectives which have been prepared for his consumption by political and media operators. I have read that in the nineteenth century, the average American received between 5 and 10 newspapers. This was possible, because our country's founders, concerned with keeping the citizenry well-informed, set up the US Postal Service so that newspapers could be produced and delivered very inexpensively. Today, most voters get all their news from a very small number of immensely wealthy media conglomerates.  Most of the news concerns the system: how the political parties are planning on winning power, where the money is being spent. For the next three months, there will be nearly daily articles on who Romney's running mate will be. In the mean time, Wallis tells us, one Afghanistan war vet commits suicide every 80 minutes. Nothing is being done about that, because those war vets have no money to make themselves be heard. On the other hand, to give my own example, one Keystone XL Pipe Line has become an issue of national concern for the the very simple reason that the Koch brothers, whose tar sands oil will flow through the pipeline, are among the very wealthiest people in the world.

3. "You can't put values back into politics until you take the money out of politics." Wallis tells of a conversation he had with an Australian friend and his wife who were thinking about running for the Australian parliament. They went through the pros and cons of such an undertaking; discussing the effect of such a decision on their family. When asked how much it would cost, they got really serious and said that that was the big problem. It could cost as much as $25,000. When Wallis told him that in the United States a Senator had to raise $20,000 a day if he hoped to be re-elected, they were stunned. Then they said the obvious:  "That means you'd either have to be extremely wealthy or be dependant on people who are."

The means and end of American politics is power. Those without money to influence the political process: undocumented immigrants, the poor, are attacked and ridiculed by our politicians in order to support subsidies for those who fund the campaign show.

4. Fixing our political system will require a movement originating from outside the political parties. As an example of a movement, Wallis tells how Martin Luther King told Lyndon Johnson in 1965, right after the passage of the Civil Rights Act, that there would have to be a Voting Rights Act. Johnson, the great wizard of getting bills through congress, said there was absolutely no possibility of it.  King pursued his appeal to the people through his civil protest movement and the United States Congress passed the Voting Rights act just five weeks later.

5.  Our corrupt political process is "not likely to change in our lifetime." The Supreme Court has ruled it unconstitutional for congress to limit the flow of money. There have been two well-publicized recent attempts at creating a movement: Occupy Wall Street and the Tea Party.  I go beyond Wallis here in presenting my analysis.  Occupy Wall Street remains independent, but does not have the wealth necessary to make itself heard. As for the Tea Party, it has been infiltrated by the extremely wealthy who have stepped in to help it choose its policies and elect its candidates.

My concluding thoughts: The American political system is far more broken than the average American realizes.  The citizens are grotesquely misinformed. It appears that only repeated major catastrophes are likely to make him wake up to that fact.

Read the Bernie Buzz

The following paragraph is taken from Senator Bernie Sanders' website: http://www.sanders.senate.gov/
It contains some basic information about the way political power is being transferred from the American people to the world's extremely wealthy:

"At a time when the middle class is collapsing and poverty is increasing and the wealthiest people are doing phenomenally well, many Americans are wondering whether this country is moving toward an oligarchic form of government where a handful of very wealthy people control the economic and political life of the nation. At a time when the richest 400 Americans own more wealth than the bottom 150 million people, it was not surprising to learn from a recent study that between 2009 and 2010, 93 percent of all new income went to the top 1 percent of U.S. taxpayers. Additionally, it is extremely disturbing that because of the absurd Citizens United Supreme Court decision, many of these billionaires are now using their money to strengthen their political hold on the country. This is not what democracy looks like. This is what oligarchy and plutocracy look like."

On Senator Sanders' website, you can sign up for his e-newsletter, entitled "The Bernie Buzz."  Senator Sanders is one of the limited number of elected liberal politicians in this country who have not allowed their positions to be influenced by right-wing propaganda. I encourage you to sign up for his newsletter.

President Obama has led the way in letting America think that there is some validity to the positions of the modern Republican Party.  If a Democratic president is leading the way, can we really blame our television and newspaper news from acting as if the Republican party still represented the interests of American conservatives?

Grover Norquist at the City Club of Cleveland

On January 13, the City Club of Cleveland welcomed as its guest speaker: Grover Norquist, President and Founder, in 1986, of Americans for Tax Reform. Norquist's appearance provides a perfect opportunity to examine the work of one of the Right's most influential propagandists. Norquist is the creator and enforcer of the Taxpayer Protection Pledge and has succeeded in convincing 98% of Republican House Representatives and 90% of Senate Republicans to sign it. They apparently have to go to his office and sign it in front of two witnesses.

Let me explain briefly why I refer to Norquist as a propagandist. First of all, a propagandist begins with a core set of beliefs and seeks data to corroborate those beliefs. Any data which do not support the core belief are rejected. On this score, Norquist can be compared to another speaker who appeared at the City Club of Cleveland: Thomas Schatz, President of Citizens Against Goverment Waste. Schatz advocated cutting taxes, but with regard to the data concerning how the government spends its money, he presented information which both strengthened and weakend his own case. Schatz demonstrated that it is completely possible to take sides in a political struggle while remaining true to facts and without becoming a propagandist.

Secondly, Norquist appeals to various emotions, such as feelings of solidarity and animosity, to gain support for a position which is expressed as something factually established. This can be seen in the fact that 98% of House Republicans have signed his pledge. Such a level of agreement is obviously the result of some type of peer pressure.

Grover Norquist is a propagandist by profession. He lives in Washington, D.C. and makes his living by influencing the American political system. Norquist has a B.A. and a M.A. from Harvard University, a background similar to other professional right-wing political activists.

Norquists core set of beliefs are fundamental to the modern Republican party as it has developed since the 1970s.

1. Norquist famously asserted that his goal was to shrink government down to where we can drown it in a bathtub. He didn't repeat this statement at the City Club, but neither did he deny it. Norquist contrasts the European style social welfare state to a more traditional American limited government. Note first of all, the choice of language. Even a liberal like me identifies more with the words "traditional" "American" "government" than to "European" "welfare" "state." But there is no actual content here. The American welfare state is very American and owes its existence to prestigious historical figures such as T. Roosevelt, Wilson, F. D. Roosevelt, Truman, Johnson and Kennedy. When Norquist speaks of something more traditional, I doubt he is referring to the nineteenth century. He is in fact, referring to something which never existed. What is called the "welfare" state is made up almost entirely of programs which Americans support overwhelmingly: Social Secuirity, Medicare, unemployment insurance, disaster relief.

2. Norquist asserts that the Obama administration has brought about a massive expansion in the role of the federal government, which has gone from 20 to 25% of GDP from 2007 to 2012. The truth is that the expansion in federal spending, in terms of dollars, can be entirely attributed to two temporary events: the great rise in unemployment payments and the cost of the economic stimulus. Norquist refers to a percentage, and this has to be attributed to the fact that the GDP went down at the same time as spending went up. There has been no permanent expansion of the federal government at all.

3. Norquist claims the mantle of libertarianism, saying that what the Right wants is for the government to leave them alone. However, the NRA is not leaving us alone in Cleveland. They've passed legislation forcing us to allow concealed hand guns in our city parks. Republicans in Washington have fought against the right of Californians to legalize marijuana. As for business, it is simply not true that businesses lobby principally to be left alone. They lobby to receive benefits from the government and in some cases receive a check from the government at tax time. But yet, Norquist does not refer to them as parasites.

4. Norquist would have you believe that Republicans are against all taxes. In fact, the Republicans are against taxes on the rich and only refer to the income tax and corporate taxes. If they were to look in to the finances of the people employed by Gabriel Brothers, some of whom are those lucky ones paying no income taxes, they would soon learn that the taxes paid by the poor: sales tax, registration fees, social security and medicare taxes have, over all, been increased during the same years Norquist's friends have succeeded in massively reducing the income and estate taxes on the wealthy. Overall, taxes have not been lowered for the middle class.

5. Norquist is a merchant of anger. He equates the following groups with the Democratic party and calls them competing parasites: trial lawyers, labor union leaders, big city political machines, government workers' unions, people locked in to welfare dependancy, well-paid government workers, and "coercive utopians who receive government grants to tell the rest of us how to run our lives." We were encouraged in Ohio when our right-wing governor tried to abolish government workers' unions and the voters overwhelmingly rejected his proposal, understanding that government workers meant first of all: policemen, firemen and teachers and that it is simply ridiculous to say they are overpaid.

6. The stimulus program is referred to as taking money from those who earned it and giving it to some one who is politically connected. The truth is that the wealthy in this country have been sitting on their money ever since the recession began. That is what businesses do in a recession. Only governments are able to spend money in a recession. The Obama administration should have spent much more than 800 billion, and their failure to do so means that we are only now, five years later, beginning to reduce unemployment. A truly significant stimulus would have gotten enough people off unemployment and back to paying taxes that it would have paid for itself in a fairly short term.

7. Obamacare involved the "nationalization of healthcare." This goes along with references to Obamacare as "socialized medicine." I have no interest in defending a law which requires me to buy my health insurance from a large corporation and leaves in place the immense profits of the insurance industry. However, it must be said that Obamacare is a corporatist law. It seeks to empower corporations to take care of our healthcare issues. It is false to say anything was socialized or nationalized.

8. Norquist argues that the Reagan tax cuts turned the economy around. The truth is that there is just no evidence that all the tax cuts on the wealthy have had any positive effect on the economy. The massive tax cuts of George W. Bush led to massive deficits and massive unemployment at the end of his administration. The tax increase of Clinton led to a balanced budget and very low unemployment.

We have to rescue our political system from the likes of Grover Norquist. Your congressmen need to stop buddying up to political activists based out of Washington, D.C. and who derive their living and their wealth from misdirecting the justified anger of American citizens.

donaldleach.blogspot.com

How Wall Street "Banks" Fleeced America

In 2002, Pam and I were considering buying a house in western New York state where we lived at the time. Our real estate agent requested that we be pre-approved by a bank for a loan, so we visted the local branch of some bank which I can no longer name. I still vividly remember the entire experience. The behavior of the bank was totally bizarre, but like most Americans in recent decades, I really didn't concern myself with the issue. I was asleep. Most Americans still are.

I enjoy calculating our own finances and knew already how big a mortgage we could afford. The bank employee took all the information I provided and entered it into his computer. He then informed us that we were approved for an amount which was consistent with my own calculations. He provided us with a document certifying our pre-approval, and then, after we had shook hands to say goodbye, he casually tells me: "If you want to borrow more than that, we can arrange it." I remember telling Pam: "That is weird." Why would a bank be willing to loan more than its customer could afford to pay back?

I know now that we were witnessing the early stages of a banking system gone amok, and that what we witnessed was the origin of the American financial crisis of 2008 and of the current European financial crisis. The banks responsible for originating loans had managed to free themselves from the cost of making bad loans. This was, and is, completely counter to the way a normal, honest banking system operates. How it is supposed to work is that the banks share in the costs of bad loans. If its customer can't repay the loan, the bank loses the money it lent. A bank that repeatedly makes bad loans goes bankrupt. Good banks thrive and survive in order to support American free enterprise. It's the American way.

When we moved to Cleveland, in 2005, we were once again interested in buying a house. Housing prices were skyrocketing. The kind of house we were interested in was priced near $200,000. Traditional banking logic said that this was only possible if Pam got a second job. They would want 20% down, leaving us with payments of $860 a month plus real estate taxes. This was clearly something we could not afford, so we rented. Our landlord at the time: Phil, worked for a financial firm originating mortgages. No problem he tells us. He can get us a loan. We should be looking more in the $500,000 range. Maybe even $750,000! Weird. Unless you realize that he got a commission on any loan he originated, no matter how bad the loan was.

Question: "If the bank is not paying the cost of its bad loans, who is?"

So what was going on? That New York bank, and the firm Phil worked for, didn't care if we could repay. They would resell our mortgage on the secondary market; to what I will refer to as the super-banks. In places like Cleveland, people like Phil were out walking the streets in the poorer neighborhoods. They knew that they had nothing to lose. Some poor sucker would think that by working day and night, and with his wife working day and night, and the kids fending for themselves, they could afford to own their own home. Today, many of these people are unemployed, and their meager retirement funds have ended up in the vaults of those Wall Street "banks." They were swindled.

But why would super-banks buy loans originated by people like Phil? The answer is that they had devised means of making short term profits so immense, that they really couldn't bring themselves to care about anything else. They certainly didn't care about the health of American free enterprise. They didn't even care that much about the firm they worked for. I'll only refer to a few of their tricks. First, they took all the mortgages they bought, and bundled them. This allowed them to be sold on the Stock Market, where they argued that the bundles were made up of enough very good loans to make up for all the bad loans. This was a lie.

So why would people who spend their lives picking stocks and bonds recommend buying these bundled mortgages? Bribery and collusion. Standard & Poors, whose job is to evaluate the safety of investments, rated these bundled mortgages as highly safe. Another lie.

Trick number 2: credit default swaps. This is a type of insurance policy for people who want to make highly lucrative, but also highly reckless investments. In this case, you invest heavily in these risky bundled mortgages. You pay a small percentage of your profit to another super-bank, who agrees to take over ownership of these risky investments should they fail. One super-bank makes money selling the credit default swaps. The other is guaranteed to make money even if its investments fail.

The swindle continued until 2007. As more and more people bought houses they couldn't afford, the value of those houses increased, encouraging even more and more people to buy houses they couldn't afford. The economy was good. People were paying off their mortgages, some were even taking out home equity loans on their current homes that were now worth, they were told, double the price they had originally paid.

Pam and I were wisely suspicious and continued to rent a house until the summer of 2007, when we decided to explore the housing market again. We felt comfortable paying about $150,000, but the price for what we wanted was still around $200,000. But we soon saw signs that the bubble had burst. No one was buying. Some of the houses we looked at in the winter and early spring had been on the market for a year or two. In July, we decided to risk offending the seller and offered $110,000 on a fixer-upper priced at $150,000. The sellers accepted.

In 2008, the price of oil spiked and the economy slowed. Employment slowed and people started defaulting on the bad loans. The super-banks who had sold the credit default swaps were the first to bite the dirt. Lehman Brothers went bankrupt. With the collapse of the banks ensuring the bad loans, the collapse of those banks holding the bad loans would follow shortly.

Did we need to bail out these banks? Is it true that letting them all go bankrupt would have plunged us in to the second Great Depression? I don't know.

I do know that Henry Paulson, George W. Bush's treasury secretary, had been the CEO of Goldman Sachs, which was a leader in the development of derivatives and credit default swaps. And that Goldman Sachs actually grew in wealth, profit and influence in the decade from 2002 to 2012.

Goldman Sachs knew that they were profiting from the disaster and hid it from nobody. You have all heard how the very year that they were "bailed out" they paid bonuses of over a million dollars to 953 of their employees. They paid those bonuses in recognition of the good performance of their company. They knew that they had been successful that year. They had successfully dealt in bad loans and passed on the cost of those bad loans to the American consumer and to the American tax-payer.

Due to the success of their lobbying campaigns, these banks have emerged from the catastrophe still intact and unregulated. The assets of the four biggest American banks: J.P. Morgan Chase, Bank of America, Citigroup and Wells Fargo- now equal 62 percent of total commercial bank assets. That's up from 54 percent two years before the banking crisis. (According to Robert Reich blog: December 9, 2011.) These banks have profited from a highly successful lobbying campaign which has succeeded in passing on blame to the American consumer and has successfully discredited all attempts to regulate their behavior. The two congressmen whose names are on the bill aimed at regulating them: Frank and Dodd, are retiring from congress. Their bill has been mutilated and is not being enforced.

The effects of the policies of these super banks were devastating to the American economy. From the height of the housing bubble to the bottom of its collapse, the value of homes in America declined by $5.5 trillion. The same people who were fueling the economy by taking out home equity loans on their over priced homes, are now saving every dime in a last-ditch effort to rebuild their retirement accounts. Many are unemployed and have stopped paying taxes and are now receiving unemployment, thereby plunging the federal budget in to a deep deficit.

Entire neighborhoods in cities like Cleveland are now boarded up. Where once people were renting their homes, they have now moved out and are packed in living with their relatives. Their meager life's savings have ended up quite literally in the pockets of the Wall Street banks.

But here is the clincher. Our next president will almost certainly be submissive to the authority of Wall Street. Mitt Romney lays claim to business experience in the private sector, but he doesn't say that his experience is that of a Wall Street banker. Romney enriched himself through the success of Bain Capital, which he created in 1984. The specialty of Bain Capital was leveraged buyouts. This is where an investment firm buys a poorly performing company on the verge of bankruptcy. It then proceeds to lay off all the employees and to rehire a greatly reduced number at a lower wage. They then resell the company for a profit.

As for Newt Gingrich, he is reported to have been paid $1.6 million dollars for his services as a consultant historian to Freddie Mac, the Federal Home Loan Mortgage Company. This comes as the SEC has brought a civil suit against the CEOs of Freddie Mac and Fannie Mae: Richard Syron and Daniel Mudd, arguing that they failed to properly inform their stock holders of the risky nature of sub-prime mortgages. Mind you, this is a civil case, which means that Syron and Mudd won't be paying any of their personal money for their wrong-doing. It will come from the companies they worked for. Mind you also, the company they worked for was taken over by the federal government in 2008 and saved at a cost of $170 billion so far, and still counting. Finally, let it be noted that these two individuals had a combined income of $30 million from 2006-2008, during which time their corporations went bankrupt. (My numbers come from the NPR version of this story: http://www.npr.org/2011/12/16/143859110/sec-charges-fannie-mae-freddie-mac-officials)

As for President Obama, who has recently adopted some "Occupy Wall Street" rhetoric, his presidential campaign has thus far received more donations from Wall Street than all the Republicans combined. He has presided over an administration which has done nothing to inform the American people of the nature of this national disgrace.

People.

It is time to wake up.

Don't let Wall Street run our country.

Don't vote for anyone, Republican or Democrat, who is dependent on Wall Street money.

That will surely mean you'll have to write in somebody, instead of accepting the choices presented to you next November.

Don't give in to all that corporate financed advertising which is going to try to tell you that the Democrat is a sleazeball socialist and that the Republican is the great savior of threatened small business and American values.

In fact, both parties have sold their souls to the demands of big money.

Social Security 101

This is what you need to know to follow every discussion on Social Security.

First of all, Social Security works by having those workers presently working pay for those workers presently retired. I remember my dad explaining this to me back in 1969 or 70, when he was retiring and we were moving to town. I asked him how Social Security worked and he explained that people of his generation were receiving a gift. That he was going to be receiving monthly checks and the total amount would almost certainly surpass what he had paid in to it.

Social Security is an insurance program. It is not a savings plan. This means that the money you pay in to it is used to pay claims. If you do not reach retirement age, you will receive no money back. If you live past 100, your benefits will never run out.

Understanding this is the key to understanding why George W. Bush's plan to privatize Social Security was a farce. People were going to be allowed to invest their Social Security payments in the stock market. Social Security would have been in an immediate financial crisis, unable to pay out the benefits it was committed to paying. Either it would have gone bankrupt or the government would have had to raise taxes. The end result would have been that money raised from a tax on the working and middle class would have been used to increase investment in the stock market.

From its creation Social Security has been treated as a financially independent entity. The government calculates how much money is taken in, and how much is paid out, and it knows that today it has a $2.6 trillion surplus. It plans ahead and knows that this is enough money to pay every benefit owed to every eligible American for the next 25 years. It also knows that in about 12 years it will start running into deficits. Either retirees need to receive a little less in the way of benefits or more money needs to be paid in to the system. In the budget shutdown game from earlier this year, Obama agreed, by reducing inflation adjustments, to cut the amount of money retirees would receive. He has since backed off on this, but not before losing the waning support of people like me who think that given the great expansion of wealth at the top 1/10th of 1%, it would be more proper to have them, rather than the working class, pick up the slack. But I digress.

Conclusion. Social Security is financially sound. It will need an adjustment some time, but that adjustment is very minor.

So why does Social Security somehow keep entering into every serious discussion about reducing the national debt? This is because in 1968, during the Johnson administration, the government adopted the unified budget. Prior to that time, Social Security dollars were held completely separate from the rest of the federal budget. After 1968, Social Security continued to maintain its own records concerning income, expenses, surplus or debt, but the federal budget added the net surplus or deficit from Social Security to the national debt number. This means that without the Social Security surplus the national debt would be $2.6 trillion higher than we are being told that it is.

Another way of looking at it is to note that in 2010, Social Security's total income was $781.1 billion and its expenditures were $712.5 billion. (All numbers from Wikipedia). This means that $68.6 billion was taken in 2010 from the Social Security tax and used to pay for other operations of the federal government. By about 2023, Social Security will begin drawing down on the surplus paid in to the system by baby boomers. The federal government will then have to find other sources of revenue.

The defense of Social Security is, to me, a basic test of whether a candidate is a true Democrat. Social Security is 100% funded by the American worker and his employer. It is a tax which does not target wealth. Income over $106,800 is not taxed. It is an example of a government program that is has worked exceedingly well and which today has no deficit.

Any call to end Social Security or to reduce the payment of Social Security benefits can only appear as an attempt to maintain the present circumstances in which a tax on the American wage-earner and his employer is being used to finance the general operations of the government.

When President Obama agreed to reduce future payments to Social Security retirement beneficiaries, he showed his true colors. He sided with the ultra-wealthy against the interests of the working and middle class. He revealed once again that he is neither a liberal nor a true Democrat.

http://donaldleach.blogspot.com/

Wall Street vs the American People

It is revealing to read in the paper on the same day about the Occupy Wall Street movement and the fact that the Obama campaign is breaking records in the amount of money it is raising. From Wall Street. It brags to its supporters about the record number of individuals who have donated, but the record amount of dollars it has received it owes largely to Wall Street.

It has been interesting how many people don't get the point of Occupy Wall Street, including people who are in many ways anti-establishment. I'm thinking of Paul Tukey, my expert for organic lawn care, who filled me in on the Obama administration's quiet approval of genetically modified (he calls it "mutant") alfalfa and Kentucky blue grass seed. Leave it to Suze Orman, of all people to understand it completely (see her October 11 blog: http://www.huffingtonpost.com/suze-orman/occupy-wall-street-approv_b_1005128.html).

Main points: The very year that the taxpayers bailed out the Wall Street "banking" industry, its leadership was maintained and was even paid its normal bonuses. Today these mega-"banks" are once again showing hefty profits. Meanwhile there are still 10 million more people unemployed today than before the crisis. Those who were conned in to buying houses they couldn't afford are living in poverty, sending their kids to schools with 50 kids in a classroom, seeing their police forces cut and dealing with whatever healthcare they can finangle through Medicaid. And it is not just the poor who have been left behind. "Inflation-adjusted median house income declined 7.6% from June 2009 to June 2011." (Suze Orman)

No one resents the wealth of Steve Jobs. The technology to which he contributed will be one of the pillars of the future, post oil economy. Wall Street bankers have done nothing to improve the long-term well-being of the American people. This is so clear to me that it leaves me astonished to listen to people who have no awareness of it.

A few numbers from my April 29, 2011 blog post: Wall Street banker Henry Paulson at that time was being paid 2.4 million dollars an hour. The combined salary of the top 25 hedge fund managers was listed at 25 billion dollars. This is enough money to pay the salaries of 658,000 school teachers. The Plain Dealer confirmed the accuracy of one of our local state senators when she asserted that the banking crisis brought about a loss of $5.5 trillion to American home owners. Banks as we knew them in our childhood shared in the cost of the bad loans they made. These banks did not.

I'm yearning for an alliance with the Tea Party. Could it be that they are not the same as the new Right? When the Tea Party first emerged, I was profoundly hopeful. Then they were suddenly putting forth notions that I still don't think represents them. It seems that they felt a need to put their authentic concerns on more intellectual grounds and became the victim of the right-wing (corporate money-making) propaganda machine.

For a populist alliance with the Tea Party, the left has to realize that the Democratic party has sold out to big money. The Tea Party has to end its alliance with big money. That would allow a national move to take back our government, which seems to be the common ground of the alienated on both the left and the right.

Our candidates for City Council get elected by going around and talking to the voters. We just had one at our door. He wants the support of the people. That is where we have to get to with our federal congressmen. Our Supreme Court ruled that spending money is a form of speech and that corporations, now considered to be people, have the constitutional right to spend as much money as they wish in pursuit of political aims. The right-wing justices did not need to make this ruling. They picked on a minor case (Citizens United vs The Federal Election Commission) to bring about a radical increase in the power of big money over our democracy. The Justices supporting this decision and, in particular, its leader John Roberts need to be impeached.

Slogan coming from Occupy Wall Street: "I'll believe corporations are people when Texas executes one. "

I'm using the term corporation excessively and inaccurately. Big money is also private companies like Cargill and Koch Industries. Also, I understand that corporations are diverse and not unified. But it seems to be the term which best reflects my concerns. I'm trying to shout as loud as I can that big money is squashing democracy. It provides us with our news, and is increasingly funding propaganda research so that its news can refer to its own studies.

The characteristic argument is that government can't do anything right, but it never focuses on how much of our taxes end up in the pockets of the very people getting rich by saying that government can't do anything right.

Lincoln said we fought the civil war so "that government of the people, by the people, for the people, shall not perish from the earth."

Obama is neither a Liberal nor a true Democrat

I like to use the term "a true Democrat" to refer to someone who believes in and fights for the view of government entertained by Roosevelt, Truman and Johnson. Similarly, I hesitate to call the views today dominating the Republican party as Republican. Ronald Reagan is what I think of as a Republican. Or Barry Goldwater. Our retired Senator Voinovich of Ohio was a Republican. On the other hand, our current Ohio Senator Rob Portman and Governor Kasich are so different that I hardly feel it is accurate to refer to them as belonging to the same party. The first three were citizens. These new guys are political players who draw their inspiration from right-wing (corporate) think tanks and the right-wing press. When they left congress they hung around in the corporate sector and now they are working to bring corporate government to Ohio. (At the turn of the twentieth century, Standard Oil owned both Ohio Senators, so this is historical déjà vu).

It is becoming increasingly evident that Barack Obama is not a liberal. His views are very difficult to distinguish from those of Mitt Romney. Indeed, I've gone to referring to ObamaRomneyCare. (As governor of Massachusetts, Romney signed healthcare legislation into law that is eerily similar to the Affordable Healthcare Act.) Not only is Obamacare not socialist, it isn't even liberal democratic. It is based on the notion that the role of government is to leave initiative to the private sector, dominated today by international corporations. If you object to the mandate that people must buy health insurance, keep in mind that the mandate is for them to buy private insurance, which for practical purposes means buying it from some corporate entity.

During the debate over the debt limit, Obama repeatedly stated to his Republican opponents: "I have to deal with my people on the left just like you have to deal with those on your right." In other words, Obama was equating his liberal progressive wing with the Tea Party movement. His goal was and is to situate himself halfway between the Tea Party and the liberals in his own party, which situates him in that space that used to be occupied by something that was called "the moderate Republican," but which doesn't exist anymore. There's a blog to be written on the systematic elimination of this creature starting around 1980.

During the great debate on the raising of the debt ceiling, Obama took to referring to the need to cut "entitlements." In other words, he took up the perspective that either, 1) the United States of America is too poor to spend money on the poor, sick and elderly or 2) the "Government" is not the appropriate means of caring for the poor sick and elderly. These perspectives are by definition conservative perspectives. Of course he expressed pain at taking up these perspectives, which is typical of the now disappeared "moderate Republican" creature. Roosevelt, Truman, and Johnson argued explicitly that these perspectives were false and immoral. That's because they were Democrats. What today has come to be called Liberals.

Obama's course of sacrificing liberal principles in order to compromise with the new Right seems senseless and incoherent. It may be, however, that his advisors are simply responding to the power of big money. To maintain its power, big money needs to be perceived as independent of either political party, and donates to the candidate perceived as being independent of politics. This also explains Obama's simultaneous denunciation of the progressive left and the Tea Party. These are the two groups with the political patriotism to push for reform of the political status quo.

Thoughts on the Economy

A new economic term to be learned: the Liquidity Trap. This is when investors have money to invest, but no where to invest it. We have one today. In order to put money in the Bank of New York Mellon, you have to pay the bank. This is because neither the bank, nor the investors who put their money in this account, have any use whatsoever for cash. No one is buying anything, so it would be foolish to invest in the economy. It is obviously an absurd state of affairs, when the government seems unable to pay its bills and corporations are basically paying no taxes. Wall Sreet Journal blog, August 4, 2011, by Jon Hilsenrath. http://blogs.wsj.com/economics/2011/08/04/bny-mellon-deposit-fee-life-in-the-liquidity-trap/

Interviewed an individual today who wanted a part-time retail job nights and weekends at Gabriel Brothers. She had worked 10 years in a factory and when it closed she was making $17.00 per hour. She spent two years in another factory which also closed. She then got hired at Lake West Hospital, but is paid so little that she now wants to take on an evening and weekend job to make things meet: $7.50 per hour. We talk to these people all the time, but they find it very difficult to actually perform well at two jobs.

Daniel Griswold, Director of Trade Policy Studies at the Cato Institute, founded and funded by the Koch Brothers, gave the following statistics in his talk to the City Club of Cleveland. I didn't right the numbers down, so my memory might be off, but very slightly. In 1990, it took 10 man hours to make a ton of steel. In 2000, it took 5. Today it takes less than 2. There are two obvious conclusions. First, this increased productivity means that all things made of steel are much cheaper than they would otherwise be, and this is a wonderful thing for all Americans, especially the working class. Second, the effect on employment is a catastrophe for the working class.

The international economy has undergone a fundamental shift in the last 30 or 40 years, which requires the American people to engage in thoughtful and open-minded discussion. The problem is that the the economic changes have created immense corporate and personal fortunes which have nothing to gain and everything to lose from thoughtful and open-minded discussion.

In a series of speeches in 1933, 1934, Franklin Roosevelt addressed the nation to state the necessity of government providing work to the people. He said that if industry was unable or unwilling to provide jobs, then the government would have to do it. Over the next 10 years, the US government created 11 million jobs.

Many Americans have been convinced that the government should not be involved in creating jobs, but I believe the alternative is an extended period of high unemployment and low wages and all the negative social consequences which result from that. There seems to be a mood sweeping the country that the time has come to suffer.

Why We Have a Large Federal Deficit

I. Our government decided that corporations should not have to pay for anything.

According to Richard Wolff, Emeritus Professor of Economics at University of Massachusetts Amherst, Democracy Now, 7/20/2011: "If you go back to the 1940s, here’s what you discover, that the federal government got 50 percent more money year after year from corporations than it did from individuals. For every dollar that individuals paid in income tax, corporations paid $1.50. If you compare that to today, here are the numbers. For every dollar that individuals pay to the federal government, corporations pay 25 cents."

II. Our government decided that the extremely wealthy should not be called on to contribute more than anyone else. From 1940 to 1970, the highest earnings were taxed at 70% or more. At one point the rate hit 91%. During these 30 years, the economy boomed. Reagan lowered the highest rate to 28%. Clinton raised it to 39% and balanced the budget. Bush lowered it back to 36%. You may think it unfair to tax anybody at a rate of 70% and up, but the results of this major shift in taxation have been dramatic. In 1977, the top 1% of Americans had 9% of the nation's wealth. Today, they have 20%. Today, 120 million at the bottom have the same combined wealth as the 150,000 at the top. While corporations publish record profits, wages and employment are in a long-term state of decline. The top 1% of Americans makes close to 25% of the total income made in America. Just moving the rate back to 39% would make a tremendous difference.

The right-wing propaganda machine likes to speak of "a vast expansion of government under Obama." This is total nonsense. Ezra Klein posts a blog reproduced in yesterday's Plain Dealer, which shows where the debt really came from. To read the original post: tinyurl.com/4xogtb5 (I can't seem to copy his graph, so I'll have to describe the content).

Under Bush, 2002-2009, new costs incurred totaled 5.07 trillion. The biggest four items being:

1.) 1.469 trillion: multiple wars. (Joel Stiglitz argues that the total cost of the Bush-Obama wars will hit 5 trillion.)

2.) 1.812 trillion: Bush tax cuts (non-stimulus tax cuts first proposed by Bush during the 2000 election. He was concerned about the Clinton surplus. This is true. Not sarcasm.)

3.) 0.773 trillion: 2008 stimulus and other changes

4.) 0.608 trillion: Non-defense discretionary spending

Under Obama, projected 2009-2017, the new costs minus planned cuts total 1.44 trillion

1.) 0.711 trillion: Stimulus spending

2.) 0.425 trillion: Stimulus tax cuts

3.) 0.278 Non-defense discretionary spending.

4.) 0.152 trillion: Health reform and entitlement changes

It deserves repeating that the bulk of the current deficit comes from the consequences of having over 9% of our workforce unemployed. Not only did those people stop paying taxes, they are receiving unemployment and other government benefits intended to help them until they find a job. In the meantime, the government is doing nothing to get them back to work. Indeed, the government is laying people off.

In the Cleveland Public Schools, they are discussing whether class sizes will hit 50.

So far Obama has:

1) Agreed to cut Social Security benefits. He backed off after pressure from his own party.

2) Agreed to raise the age when the elderly can begin Medicare. He backed after pressure from his own party.

3) Signed on to a deficit reduction package which does nothing to increase revenue.

In a speech to the U.S. Senate, Bernie Sanders, Senator of Vermont said the following: "Despite Democratic control over the White House, despite Democratic control over the Senate, despite overwhelming opposition from the American people, a small minority of the members of the Republican-controlled House have successfully pushed an extreme right-wing agenda onto the American political landscape. It is an ideology which believes that despite the fact that the rich are getting richer, the middle class is shrinking, and poverty is increasing, all—all of the burden for deficit reduction should rest on working people."

August 2, 2011

http://donaldleach.blogspot.com

Tidbits

I have thoughts for more developed thinking, but haven't had much leisure to write as my job is requiring me to work more hours than I think are appropriate. In this, I feel a lot of solidarity with the working class, where it is now common for both parents to work, or for one parent to work two and three jobs. This explains why there is no outbreak of political activism among the working class, which comes home and turns on the dribble of cable news, if they get any news at all.

Our largest corporations are making more by paying people less. Michael Cembalest, chief investment officer of J.P. Morgan Chase, asserted in his bank's regular report that "U.S. labor compensation is now at a 50-year low relative to both company sales and U.S. GDP." Corporate profit margins are now at 13%, compared to just under 11% in 2000. (Source, editorial by Harold Meyerson of the Washington Post entitled: "Corporate America's Chokehold on Wages.")

Our Democratic President has now agreed to 1) raising the age at which one can begin to be covered under Medicare, 2) reducing the inflation adjustments to Social Security so that the payments will be less likely to keep up with inflation. He seems to be inching further toward the Republicans on a couple of points of principle: 1) "Across the board" means million dollar tax breaks for billionaires and peanuts for the average American, 2) "Tightening your belt" only applies to the middle and working class.

Quote from the blog of Robert Reich, July 15: "A recent paper by Cornell political scientist Suzanne Mettler surveyed how many recipients of government benefits don’t really believe they have received any benefits. She found that over 44 percent of Social Security recipients say they “have not used a government social program.” More than half of families receiving government-backed student loans said the same thing, as did 60 percent of those who get the home mortgage interest deduction, 43 percent of unemployment insurance beneficiaries, and almost 30 percent of recipients of Social Security Disability."

Most of what passes these days for tax cuts is disguised corporate welfare.

Obama is now governing further to the right than Mitt Romney did when he was governor of Massachusetts. The democratic electorate is all about jobs, and Romney might well defeat Obama if he should manage to get the nomination. When is the last time you heard Obama discuss a plan for creating jobs?

A couple of poll results in today's Plain Dealer show what Obama is banking on. 66% of Americans want the President and Congress to compromise on raising the debt ceiling. 55% of Americans are more concerned with the deficit than they are with an economic crisis caused by the failure to raise the debt ceiling. So Obama works to be the leader of compromise and the leader in fighting the deficit. It's a center-right position.

Obama knows that people like me will never vote Republican, given the influence of the Tea Party and the whole right-wing propaganda machine on even a moderate Republican like Romney or Huntsman. It is urgent to get the Supreme Court out of the hands of Thomas and Scalia. Even after his recent betrayals, I am still confident Obama will do that.

Interesting also that the poll in the Plain Dealer doesn't ask people what they think about Medicare and Social Security being reduced. That's because Obama, the leader of the Democratic party, is himself leading the way in negotiating those reductions.

I am a regular reader of Paul Krugman's blog: "The Conscience of a Liberal," affiliated with the New York Times. He is my specialist on economics. For Krugman's take on the now rejected Obama-Boehner agreement to raise the age when you can join Medicare, go to http://krugman.blogs.nytimes.com/2011/07/23/what-obama-was-willing-to-give-away/. Best point: by sabotaging and mocking any attempt to reduce the cost of private health insurance, and by raising the age when people can begin Medicare, the Republicans are ensuring that a group of people in their 60s will go without insurance for a couple more years. Many people in their 60s are already doing so. They wait for Medicare to begin treatment of chronic conditions.

The obvious fix for healthcare is to allow any body who likes to sign up for Medicare at any age. Between 3 and 5% of the cost of Medicare goes to its administrative costs. From 15 to 20% of private health insurance costs go to administrative costs. Its one of numerous examples where government does a better job than the private sector. (Numbers from Democracy Now, but I've heard similar statistics from many other sources.)

Ezra Klein on the Strategy of Republicans in Congress

I'll cede the floor on this one to Ezra Klein, Washington Post, June 28, 2011.

http://www.washingtonpost.com/blogs/ezra-klein/post/column-in-praise-of-mitch-mcconnell/2011/05/19/AGoMj1oH_blog.html

Klein's column concerns the political tactics of the Republican Party and, in particular, the political strategy of Mitch McConnell, Senate majority leader.

Mitch McConnell is the one who, in October 2010, told the National Journal: "The single most important thing we want to achieve is for President Barack Obama to be a one-term president."

So far, the Republicans seem to be succeeding. Obama challenged the Republicans to not participate in the healthcare debate. He thought they would have to participate or face an irate public, but they proved him wrong. Backed by their formidable spin machine they were able to convince almost half the country that the bill was an example of extreme incompetence and moved the country down the road toward socialism.

Now the same pattern is playing out with regard to economic policy. Obama presenting himself as the figure of compromise, willing to face-down his own liberal base; the right presenting themselves as unwilling to compromise with someone so liberal as Obama.

The Republicans have thus destroyed effective government for the four years of Obama's first term.

While the government thus produced has been horrible, politics have never been more interesting. When he finds himself trailing in the polls, will Obama come back to life? Could we finally be treated to a liberal who can articulate outrage? Or maybe his Republican opponent will be so out of the mainstream, that he won't have to. I don't know which of those two options I prefer. I don't even want to consider the option that he will go out like a sacrificial lamb.

Who is to Blame?

Our democracy is in a state of crisis. Where does the problem lie? Here is a listing of the players starting with #10, the least to blame, and ending with #1, the most to blame.

10. The Liberal Media. I didn't know there was any, until I started listening to Democracy Now. It stirred memories from my childhood in the 60s, when we had real liberals, with whom it was difficult to argue: Hubert Humphrey, Bobby Kennedy, LBJ.

9. Large Corporations and Big Business. Corporate money dominates our political system, but yet I am going to say that this is not the fault of the large Corporations. Our businessmen and women have the duty to make a profit for their company. If they do not, they go bankrupt and everybody involved is hurt. The nation as a whole is hurt. Business is, of course, much more than a game. However, it can be compared in that businesses compete to win according to rules. Their duty is to follow the rules, but it is not their place to make those rules. If blocking in the back is a legal part of the game, then any serious competitor will block in the back. Todays rules are such that large businesses have to invest in politics. Walmart had no full-time representative in Washington until 1999. That all changed when they decided they would like to go in to the banking business and were blocked by congress under the influence of the banking industry lobby. Almost immediately, Walmart's Political Action Committee became one of the largest PACs in America (read Robert Reich, Supercapitalism, chapter 4). Who can blame them?

8. The Mainstream Media, CBS, NBC, ABC, CNN, PBS, NPR. I think this is what the right refers to as the liberal media? I'm not sure.

Once there were large newspapers, and everybody argued over what the newspaper said. Most people disagreed in one way or another with the newspapers, but at least everybody was arguing over the same things. Then there was ABC, NBC, and CBS, Cronkite, Huntley and Brinkley, and that other guy. Here again, everybody knew that television wasn't giving the whole story, but everybody was arguing over the same thing. Today, everybody listens to whoever they agree with and don't even know what other people have to say. But this isn't really the fault of the news media. Or is it?

The mainstream media attempts to present all sides, and as a result they don't present any side. This is because of the gulf that has developed between the left and the right, as the right-wing has moved progressively more to the right over the last 20 years. We're moving to a system where every political party has its own media, which I have seen work quite well in Europe. The problem is that there is no media for American liberals, and their points of view are not being articulated nationally.

7. The Democratic party. The democratic party used to be a liberal party: help for the elderly, the children, the working class, the sick, the environment. Today it is the wimp party. The Democratic Party fought for Social Security, health care for all, the working class, equality, the minimum wage, and government intervention in the economy in order to avoid recessions. Today, we have a president liberal at heart, who has repudiated liberalism in public. His health care plan was written to appease large corporations, his energy program is based on tax incentives for large corporations, and instead of talking about the 8 million who lost their jobs in 2008-2009, he is focused on getting re-elected by raising 2 billion dollars from large corporations. He has apparently abandoned the small donors that won him the election last time. I'm not sure whether it is good politics, but it is surely bad for the Democratic Party and it is bad for the United States of America.

6. The Right-Wing Media. The right-wing media is part and parcel of the current Republican party. It has taken the lead in making politics a yearly, year-around form of entertainment. Its goal is to win elections for candidates supporting their right-wing ideology, and to make money for themselves while at it. It substitutes indoctrination for information. They are the marketing arm of the party. They are a threat to democracy, and liberals who don't realize this are fast asleep.

xx. The political parties. Let's be clear about one thing. It's not true that they are the same. They have never been more different. Let's look at them separately.

5. The Republican party. The Republican Party has become something quite new in American history. It sees itself as the instrument of a larger anti-government movement defined by think tanks such as the Cato Institute and the Heritage Foundation and disseminated by Fox News and right-wing radio. Membership in the Republican Party requires adherence to the details of Republican Party strategy. When Newt Gingrich criticized the Medicare provisions of his party's budget proposal, he was immediately chastised by the right-wing media and pushed to renounce his statements. The party has forced near 100% party unity in congress over the last two years. The Democrats have voted with a high degree of unity, but this is only by crafting bills to appeal to the far right of the Democratic Party (e.g. Obamacare)

The Party functions in a corporate manner with a product being first produced and then marketed. The production and marketing teams are brilliant in terms of their ability to sell the merchandise, but for the consumer, the American conservative, I think the product is poor. It doesn't take the country where the conservative American wants it to go.

A Democrat should be in favor of an active government engaged in ensuring the well-being of the citizens. A Republican should be in favor of a limited government which safeguards private initiative. What we have is a government which stifles both private initiative and effective government action, whether it be Democratic or Republican.

This presidential election period is going to be very interesting. Huntsman and Romney, for different reasons, are not in conformity with the right-wing propaganda machine. It may be that one of them will get the nomination. That would make me feel better about the American citizen.

4. Conservatives. Limited government as an ideological orientation, doesn't concern me. But the right-wing propaganda machine is not committed to effectual government. Only strong government can make the citizen free from government interference. If politics is taken over by profit-based media and funded by powerful big business interests, then government will serve those causes. Our government needs reform. The Republican party can only further true conservative values by becoming a party of true reform.

3. The wealthy class. If big business, per se, is not to blame, I feel quite the opposite about the wealthy class which has been created by big business. The role of big money in our system is insulting and is what, to a large degree, fuels this blog. While there are many exceptions, the general pattern is that our wealthiest citizens are driven by greed. Today, the top 1% of Americans are making close to 25% of total income in the country. You would think they would be thankful and generous, and all they think about is how to squeeze more billions out of the system. Take social security. Some time in the next 50 years, social security is going to need to increase revenue or cut benefits. This problem can be solved either by 1) working class Americans taking a bit less than they've been promised, or by 2) making people at the wealthy end of the scale pay a tiny bit more. To the wealthy, this is unacceptable, which is why you periodically hear talk of some sort of a crisis. The wealthy are maneuvering to avoid helping out those who have worked all their lives in their mines, in their factories, on family farms and in their offices. In the long term, their disregard for the welfare of all will lead to their own downfall.

2. Liberals. Liberals have been sleep-walking since the 60s. No major liberal program has been legislated since the 60s and liberals have stood by while the news has become dominated by forces bent on undoing the liberal pillars of our society. Today, they have little means of getting their message out. It's true that it is hard to be passionate when the liberal you elected president is selling out. Or maybe Obama's wimpishness is just typical of all liberals. (Read Sally Kohn's article entitled: "Liberals Pride Themselves on Being Tolerant. Are They Really Just Suckers."http://www.washingtonpost.com/opinions/liberals-pride-themselves-on-being-tolerant-are-they-really-just-suckers/2011/04/13/AFhsTZjD_story.html

1. The American citizen. Not many years ago, maybe 20 years ago, (I'm getting old!), I remember thinking that the American citizen was quite remarkable in his ability to sort through all the nonsense of competing claims and to make decisions based on independent deliberation. Today, I am disheartened. I don't see it happening. It is a very difficult time for the American citizen. Where do you get the truth?

But I do have a couple of thoughts. a) The notion that politics is a sport and that you are rooting for one side to win has to be rejected. Its not just about winning. You have to get the facts right in the same way you do for any other major life decision. b) You need to know and trust the morality of the salesman pitching a certain policy. He should be interested in all points of view, not just selling one because it is profitable to him. If the salesman of an idea makes money from pitching that idea, is funded by private interests, if he lives in Washington year-round, if he has made large sums of money in the politics business and if he won't tell you whether any of the above things are true, then you should not be investing in his product.

Sally Kohn on What is Wrong With Our Economy

I just discovered the writing of Sally Kohn, founder of the Liberal think tank: the Movement Vision Lab.

When I went to read one of her articles on line, a picture of a smiling face was presented with the question: "Do you own an oil company?" Why would that make me giggle? (I shouldn't laugh, because it sounded like it was mocking people with modest lifestyles who vote Republican.) Democracy Now a few weeks ago played this activist folk song entitled something like: "God Help Us, the President Is An Oil Man."

As for what is wrong with the economy, you can read Sally Kohn's op-ed piece in USA Today, May 24: http://www.usatoday.com/news/opinion/forum/2011-05-24-Dont-believe-national-debt-hype_n.htm#

A few highlights.

1) 8 million people lost their jobs during the last year of the Bush administration and the first few months of the Obama administration. No substantial progress has been made at putting these people back to work.

2) It is tragically misplaced to even contemplate tax cuts for large American business.

Why? Large American Industry is sitting on record levels of capital, which is not being invested to create jobs. Why? Because the American consumer is broke and is not buying anything. American corporations are using their tax-break money to invest in infrastructure, or just saving it for the time when their customers will start spending again.

Conclusion. Tax cuts need to be directed at the consumer. If the consumer is empowered to spend more, industry will be able to do what they already want to do: expand.

3) It is tragically misplaced to be reducing government spending at this time.

Why? Because cutting government spending directly reduces consumer spending. Not to mention that the government is itself a very important consumer.

4) It is tragically misplaced to be obsessed with the deficit and to see a Democratic president obsessing over the deficit with all these people unemployed.

Why? First of all, the biggest cause of the deficit (other than the Bush tax cuts) is that 8 million people stopped paying taxes three years ago, and started depending on the government programs set up to give them temporary support, thereby causing the government to spend more.

Why? Because our deficit, while a big, long-term problem, is not a major problem in the short-term. Sally Kohn provides some perspective. The American government has a debt-to-income ratio of 1-to-1. That means that what we owe is equal to what we take in during one year. The debt-to-income ratio of IBM is 2-1, Dupont 3-1, Boeing 4-1, Caterpillar 14-1. (I won't mention JP Morgan Chase which is at 50-1, because they are too big to fail.)

CONCLUSIONS:

1) Taxes need to be cut immediately on the American consumer. This is in the interest of American business large and small.

2) Republican economic policy is driven by an ideological obsession, hatred for government, which is counter to the interests of American business.

Another outstanding Sally Kohn article is from April 15, entitled: "Liberals Pride Themselves on Being Tolerant. Are They Really Just Suckers."

http://www.washingtonpost.com/opinions/liberals-pride-themselves-on-being-tolerant-are-they-really-just-suckers/2011/04/13/AFhsTZjD_story.html

Of course, I think this is a great article because it seems to say just what I am thinking. In fact, a future blog ruminating in my mind is entitled: "Why Liberals Repeatedly get their Butts Kicked In Debates With Right-Wingers."