Saturday, December 18, 2010

Bailing Out America

 
     Who are the rich people who need their tax cuts extended--when they shouldn't?
     They are not billionaires.  They are people who became millionaire because of the Bush tax cuts, and at the expense of the working class, but lost most of it during the Great Recession.  They are people whose trusts, many established for their children, grandchildren and great grandchildren, were also hit.     
     They are people who invested more than they could ultimately afford on homes that were too big. on mansions they could't afford, and on expensive cars for each member of the family.  
     They are people who spent much of their children's inheritance on worldwide trips, entertainment and recreation, not expecting the Great Recession and the decline in prices of their homes whose sizes too often exceeded the needs of the family.  
     Many of these are people who impoverished themselves by poor management of their wealth, and hope to bounce back on the backs of the middle class to which they only recently belonged, and they won't feel guilty about impoverishing them so long as they regain their financial standing.  
     Many of these people were rich people, who earned as much a $500 thousand a year, who have become middle class again, and fear they may have lost their last best opportunity to again enrich themselves legitimately.      
     Many of them are having to take care of adult children who did not prepare themselves for secure employment, forcing parents and the children into a lower standard of living.
     Many of them are trying to build new wealth at the expense of the middle class and working poor, money which they should have saved for their children's future and present needs.
     However, people with hundreds of millions of dollars in wealth or more  don't need tax-cut extensions.  They're generally smart enough, shrewd enough or positioned well enough to have invested wisely and avoided being terribly damaged by the recession.  Most of them actually used the recession, and the lead up to it, to further enrich themselves. Many of them were already super-rich, with enough money to adequately fund even trusts of  future generations. 
    The only problem with funding future generations is that top academic talents may go undeveloped to the detriment of the nation.  And if moral virtues and traditional values are not the underpinnings of their ambitions and if those talents were to be used to seek out weaknesses  within our political and economic systems for personal gain--then maybe the nation is better off with their not be well-educated.
     Poor management of money, of course, enriches some elements of the population, whereas, wise management of money enriches a different set of elements, and often provides jobs for a different kind of employee.
     The people of the emerging economies want to have what Americans have, and the more they achieve that goal, the more Americans trend toward conditions from which they have come.
     Former British Prime Minister Gordon Brown pointed out in a recent interview that while the emerging world is presently taking jobs and wealth from the Western world, those jobs and that accumulation of wealth will eventually produce consumers who will want to buy the kinds of thing we will either make or make better and faster than anyone else.  
     But that will only happen in the US if we educate our children better than everybody else, so they can either generate the creative ideas, produce unique but necessary products, or play their parts by enabling both of these to happen through education and productive, rewarding labor.
     In the meantime, although there are many formerly rich people (and people who were just well off) who need tax cuts to return to their status among the elite, there are very rich people whose standards of living have not be seriously impacted by the Great Recession, and would not be impacted were their wealth reduced in some cases by a billion dollars or two, and in other cases by several hundreds of million dollars, and  still others by several tens of millions of dollars.  Some of them spend hundreds of millions of dollars seeking political office.
     Now, is the time for President Obama to call on the patriotism of the wealthy who really did not want or need their Bush tax cuts extended, and ask them to come to the rescue of the nation that made their wealth possible by giving back to the government, not only any tax cuts to which they are entitled to over the next two years, but give even more as they can afford.
     Right-wing conservative Republicans have criticized wealthy Americans who have expressed opposition to Bush tax cuts being extended for the wealthy, suggesting that they could give it back if they don't want it.  Well, this is the time for every liberal, moderate, and conservative American, for every religious leader and congregations, for every doctor, lawyer, and Indian chief, for every bank and corporation who has an American agenda to, not only make that appeal, but make a generous contributions to this "bailout" of America.  Middle-class generosity would make the job even easier.
     Our brave young men and women, the vast majority of whom have neither amassed nor inherited wealth of any consequence, are sacrificing their lives and jeopardizing their futures to protect this nation, its way of life and the opportunities it affords fellow Americans.  Those who have benefited from those opportunities, be they businesses or individuals, should be willing to show that nation, in times of dire need, their gratitude in measures commensurate with their good fortune. 
     But we need somebody of note to take the lead toward sacrifice and a new national pride, toward a renewal of the American economy to one where lost wealth and lost opportunities can be restored, both for ourselves and our posterities.
     This is a venture where Democrats and Republicans should find common ground.

Ronald

Wednesday, December 8, 2010

Democratic Compromise or Capitulation

     The Democrats and Republicans have come to an apparent "compromise" on the Bush tax cuts; that is, the President's words announcing the agreement sounded like a compromise:  Tax cuts for the middle class to  be extended permanently, while cuts for the wealthy would be extended for another two years.  Unemployment benefits would be extended for another thirteen months, and other tax benefits would help stimulate the economy.  Even at that, I would have preferred extending the tax cuts for the wealthy by one year, and making extending it for the second year contingent on evidence of significant job growth as a result of it.
     But I understood wrong.  Under the agreement, ALL tax cuts would be extend for two years--that includes the middle class cuts.  And unless businesses are going to plow profits during the next two years into middle class salaries and wages the way they did for upper-income tax payers during the past thirty years, the middle class will be no better able to fit such cuts into their budgets in two years than they are now.   
     There are, however, two good things about this agreement: (1) Extension of tax cuts for the wealthy for two years still gives the present congress and the President control over further extensions for them and (2) middle-class voters will again have a chance in November 2012 to realize and rectify their mistake, and return Democrats to a majority status sufficient to make middle class cuts permanent.   
     But I still don't see any figures made public showing how much the taxes at various income levels of the middle class would increase if the tax cuts expired.  They should have been announced continuously before the last Nov. elections and certainly should be publicize now and for the next two years if this agreement prevails. 
     Faced with the reality of this agreement, I have to rate it more capitulation than compromise.  With Republicans willing to hold the middle class hostage to demands of the rich, the President had to capitulate by taking what Republicans were willing to give him.   There are Democrats who say the President and Democrats should refused this compromise and fight.  But most of these people likely can afford to have their taxes increased.  
      It remains to be seen whether senate democrats will hold out for a better agreement (or a real compromise).  They could demand that the middle-class tax cuts be made permanent.  Such a stand would assume that middle-class tax payers could (or were willing to) take a tax hit, and whether the unemployed could (or were willing to) go another two years without further unemployment relief.  If there were sufficient jobs created during the next two years despite increased taxes, then the need for unemployment benefits would be less.  But that would be up to the business community.
      This is the kind of quagmire which the people chose on November 2.  The middle class voted against itself.  Many of those who are unemployed blamed Democrats for their condition and voted for Republican, and many middle-class workers, not realizing that they were offering themselves to be hostages for the enrichment of the wealthy, did likewise.
     While voters obviously did not understand the consequences of their votes, Democrats did--or should have.  I heard very little from the party, warning middle-class voters what would happen to their taxes if Republican gained sufficient strength in Congress.  The dilemma that we face now was predictable when the idea of extending tax cuts for only the middle class was first conceived..
     But even if all of the tax cuts are extended, we may be no better able to effect job growth and economic recovery than we are now.  Why? Because instead of the middle class and borderline rich continuing to spend tax savings that stimulate job creation, they may decide to start saving because of the chance their taxes will increase in two years.    
     Capitalism requires that risk be taken and shared by all participants in the economic system:  consumers, corporations, insurances companies, banks--everybody.  But just as businesses are claiming uncertainty as a basis for not employing more workers now, won't there be the same uncertainty during the next two years as they prepare for the uncertainty about what will happen in next two years, and couldn't that uncertainty continue to offer the same reasons for businesses not to hire during future extensions?
        Ultimate, there seem to be only two endings possible for the tax-cut dilemma facing present-day Democrats and Republicans: All tax cuts will eventually either be made permanent or all of them will expire.  Letting taxes expire not only would be devastating to many members of the middle class, but it hinders the economic recovery by keeping businesses afraid to hire, and middle-income and borderline rich people, afraid to spend.  Making the tax cuts permanent, together with compromise spending, will deepen the hole of the federal debt, all with no strategy for long-term debt reduction and economic recovery.  Either way, however, it's heads the wealthy wins, tails the middle class and working poor lose.  
     We will be borrowing to put in the pockets of the wealthy money that will be paid back through the sacrifices of everybody else.  No wonder the Republicans leaders are smiling.
     
Ronald

Sunday, November 21, 2010

Spinning Nov. 2 Elections

November 21, 2010


To:  The Editor

     Nov. 2 has come and gone, and now is time to speculate about what "the American people" said.  In just about every other word they speak, Republicans are spinning that  "the American people" said they want what Republicans want.  And they spin it as if Republicans simply want what "the American people" want.  The fact is:  the American people want different things.  But what we all want, is a quick return to the days when there is a lot less threat to or uncertainty about our future.
     I was hopeful that voters would conclude that their best hopes rested in the character and agenda of the Democratic Party.  It was Democrats that at least tried to produce jobs with stimulus legislate,--which worked, though not to the extent needed or expected.   
     It was not Obama's fault, however, that cities, counties and states did not have plans in place that could make use of the money.  It is not his fault that many cities, counties and states that were prepared to use the money chose instead to leave workers unemployed.  Voters rewarded Republicans for limiting the success of the stimulus they limited.  Because of Republican repudiations, too many voters gave Democrats no credit for either their intent or for whatever success was achieved.
     The message that voters sent rest in the fact that they gave Republicans the House but denied them the Senate.  It would have been easy for voters to vote straight Republican tickets and elect enough Republicans to the Senate to give them a majority.  The message was:  We're hurting.  We're worried.  We don't know what is needed, but we expect the President and Congress to figure it out.  Its like a patient going to a doctor and saying, "Doc, I don't feel well.  Nothing hurts; I just don't feel good."  Obama and fellow Democrats have been prescribing medicine, but Republicans have done everything within their power to prevent the patient's accessing and taking the medicine.  The patient still feels bad, but blames the doctor rather than those who denied them access to the medicine.
     In this election, voters are saying to Democrats:  Maybe it wasn't your fault that we didn't receive the medicine, but we're going to blame you until you find a way to get that medicine, whatever it is, to us.  Voters said in effect: maybe you'll have to give it to us in your office or bring it to our home.  But find a way.  Their message to Republicans is:  Get in there and help get the medicine to us.  If someone tells you another medicine is better, discuss it with the President.  We elected him to be our personal physician.  If his medicine is not right time will tell.
     The fact is Republicans were not obstructing Democratic ideas because Republicans thought they were bad ideas.  They opposed them because they were afraid they would succeed.  Defeating Democrats, not healing the patient, was the goal of Republicans from the beginning.  That goal has not changed.  And whatever they agree to will be with hopes that it fails--with a little help from them if necessary.
     I suggest the following strategy for any bipartisan compromise:  (1) Identify the sectors where there are new ideas or concerns by either party, for example, health care, financial regulations, education, energy independence, clean energy and the environment, comprehensive immigration legislation.  (2) Within each sector, allow each party to identify in writing changes it would like to see made in each sector.  (Parties would have met in advance to decide what changes they would recommend.)  (3) List by party all recommendations submitted for each sector.  (4) Allow the parties to take copies of both sets of ideas back to their caucuses and choose between alternatives.  (5) Pair up the ideas about each area and have caucus prioritize their choices from most important to them to least important.  (6) Flip a coin to determine who gets the pick first.  During the first cycle, the winner picks the area that party determined to be highest priority.  The loser gets their 2nd and 3rd choices, then winner the 4th choice.  During the second cycle, the loser of the first cycle chooses first, the loser 2nd and 3rd and winner 4th, etc.  In case there is only set of ideas left, flip a coin to determine which party's idea will be accepted.
It seems complicated, but it's fair.
     A far as extending the tax cuts for the wealthy,  Democrats had better get something mighty good in return.  Extending tax cuts for the rich only became an issue when it was almost too late to negotiate a deal with health care, comprehensive immigration legislation,  the environment, etc. 
     The president had a great press conference on Nov. 3.  He took blame for results that were not his fault.  Critics questioned as if they also bought it was his fault, and that he felt none of the people's pain.  But nobody can feel the pain of a situation like someone who has been there.  
     The President did more than say he felt the people's pain, he tried to alleviate it.  He stimulate the economy to save and create jobs, he extended unemployment benefits, he provided money for small businesses to be better able to hire people.  He lowered middle-class taxes so people would have more money during tough times.  He kept American auto manufacturers in business, saving automaker jobs and jobs at the dealerships and suppliers. These jobs kept people in homes, and gave workers buying power that kept other workers employed.  
     Yet, the President is constantly criticized for seeming not to care.   But Republicans, who have tried every trick in the bag to prevent help from going to these people, are never asked how they feel about not helping those in need, nor are they criticized for seeming not to care.
     Again, President Obama seems anxious to reach across the aisle.  And, again no Republican talks about reaching back to compromise on something that Republicans feel passionately about.  Democrats should demand that Republicans reach back with things they value.  If they won't compromise their "principles," why would they (and the American people) expect Democrats to compromise theirs.  

Ronald

     
     

Friday, November 12, 2010

An Election Like No Other

     This year's mid-term elections very likely were the most crucial elections in American history.  The American people were faced with the need for earth-shaking reforms, from very complex survival needs to the very daunting needs to adjust to a new economic reality in America.   Voters had to determine whether America would become a place where "survival of the fittest" prevailed, or where no group of human beings was considered dispensable, and none was deemed indispensable.  As was the case with the founding of the nation, however, solutions would only be provided by our brightest Americans who are also among our most moral, ethical and empathetic Americans.  
     Someone said that democracy requires and moral ethical majority.  "Survival of the fittest" with a moral, ethical and empathetic foundation both prepares and enables the strongest, brightest and wealthiest to then provide the means for maximum opportunities and preparation of those of lesser attributes so they, too, can make their maximum contribution to society.  But where conscience is no longer a factor in decision-making, "survival of the fittest" leads to domination rather than support of those less fit.
     Someone else has said that the test of a nation's character is how well it treats its poor.  
     And as the American people have become wealthier, we are becoming less willing to share that wealth with those who are less fortunate.  This attitude eventually impoverishes the middle class.  Increasingly more American families have children in poor schools than in good schools, guaranteeing to grow that pool of needy Americans who either don't know or can't control what is best for them.  
     Strangely on Nov. 2, American families, most of whose children attend poorer schools, expressed a belief that Republicans offered their children a better chance for a quality education--despite there being no evidence of this.  Thomas Jefferson said that democracy cannot survive with an uninformed, poorly educated electorate.  
     But instead of providing quality education for all children, too many parents have succeeded in providing the best schools, courses, teachers and classmates for our own children so they will be among the "fittest" to survive.   But they do this with no intention that their children be among the "fittest" so they can then help those who are less "fit."
     Someone said that democracy requires a moral, rational majority.   We need to be able to trust those with whom we survive.  But we can't continue to elect people we don't trust, for the wrong reasons, and expect honest government.  What we are to become as a nation, we are now becoming.  We can only hope that the last election results is not evidence that we are already there.  It certainly will be difficult to elect people who are better than we are ourselves.  And we cannot care more for other people than our minds have been taught and our hearts will allow.  Those who lie most, deceive most, and care less about those of us who have come upon hard times have been able to convince a majority of "the American people" that their successful war against the poor is due to God's being on their side.
     These are confusing times, indeed, when people think that those who got them into trouble are more likely to lead them out, and those who cost them jobs are more likely to bring those jobs back.  
     During this campaign, Tea Party participants depicted President Obama as a socialist--and as a nation we are socialistic: Social Security, Medicare, public schools, public universities, public highways, public support for medical research. public financing of the military, public judicial systems, public police and fire services, etc.  Little did voters realize, though,  the kind of political system they were making possible.  Even in communist China the government determines the parameters within which businesses operate, and establishes people-friendly ends that business must pursue.  In the end, the success of political and economic systems does not rest in what the system is called but in the results it achieves--its ability "to do the most good for the most people."  
     But America in the process of doing the most good for the fewest people, and we are finding ourselves operating contrary to all the words of wisdom that have been spoken and guided the behavior of mankind for thousands of years.  Even "do unto other as you would have them do unto you" is beginning to be treated as a joke.   
Whether it sought it or not, big business has been handed control of both elections and the Supreme Court, and a return to little regulations, no oversight, and no obligation to be people-friendly in its behavior.  It can reduce workforce or what workers are paid at will.  They can cut work time and workers would have to accept it because there would be no better paying jobs elsewhere.  Judging from the unidentified financial contributions given to the Republican party during the last election, there are more corporate bad guys than good guys.
     In the past, businesses made money off middle-class and the working poor who both spent more and accumulated more debt than they could afford.  Not being paid what their labor was worth, too often these Americans used credit and credit cards to cover financial shortfalls. That money bought things and activities (and paid interest on debt) that enabled businesses, both the lenders and the sellers of goods and services, to generate more profits.  These profits exceeded what business should have expected (or even would have been possible) had workers lived within their means and saved according to their future needs.  But this allowed investors at the top of wealth ladder to further enriched themselves by climbing on the backs of those working Americans who were doing the ground-level work for both businesses and this society.  
      The fact that the rule of big business is not only conceivable but, with the help of the Supreme Court, quite achievable should ring a alert bell and be cause for great concern by moral and rational voters on whose wisdom and actions survival of our democracy depends. 

Ronald

Wednesday, November 10, 2010

Thinking through Political Decisions

November 10, 2010


To:  The Editor

     When a nation's children rank 23rd and 24th (and falling) in science and math, respectively, there is little surprise that their parents ("the American people") also will not think rationally in the political decisions they make.
     Rational decision-making in politics--as in education--is a problem-solving activity.  As in science and mathematics, both begin with a set of given conditions that are relevant to a goal to be achieved during a solution process.  Each goal has it own set of relevant conditions.
     A student who has not been taught to think critically and reason logically in English, history, government, health and other non-science and non-mathematics classes will not automatically do so in science and mathematics classes either unless science and math teachers encourage, stimulate and teach them how to do so. If voters have not been taught to think rationally in their schools, how can they be expected to do so in preparation for election day?
     Being prepared to think rationally in preparation for election day does not mean that all people will come to the same conclusion.  With difficult math and science problems some times the correct solution is reached by students only because the answers are in the back of the book.  Rational thinking will not alway lead to the correct answers to problems, but it gets one on the road toward the solution.
     Solutions to all problem require access to correct information and knowledge of relationships between and among the variables existing within that body of relevant information.   The relationship between a home to live in and a good job is simple:  If the father has a good job, the family will have a place to stay.  An employer, however, does not relate directly to the family having food and a place to live.  But both an employer and family needs relate to the father's having a job.  Hence, if the employer hires the father, there will be food on the table and a place to live.  But employers also have needs, further complicating the problem.
     I once attended a conference of science teachers who were setting the guidelines for the curriculum of a science course, and the teachers had been led to conclude that teaching the scientific method was no longer appropriate because even real scientists did not use it.  I was unable to convince them that the scientific method was not just an approach to tackling science problems, it was useful in problem-solving and decision-making in everyday life activities--like voting.
     I'm again reminded of my favorite mathematics teacher, Burton West, saying to us:  "Think, young people, think."  If children are not taught and encouraged to think in school, who will teach and encourage them to do so after they become adults? 
      In a recent column, Bill O'Reilly asks, " Why do the West Coast and the Northeast continue to embrace liberalism, especially when it has led to economic disaster?"  That statement was aimed at an uninformed and misinformed audience whom O'Reilly hopes remains so about such facts.
     Often, when voters are not able (or inclined) to think rationally during political campaigns, they either flip coins to decide how to vote or engages in "trial and error problem-solving.  Trial and error works sometimes but mostly when one knows the answer and has much time to solve the problem.  Flipping the coin always has a fifty-fifty chance of being right, but votes tend to cancel each other.  Recent elections suggest that the present electorate is resorting to both methods in making political decisions: If the bunch who are in office are not getting the job done," trial and error" says choose someone else.  "Flipping the coin says: I don't know which is better; I'll just pick one.  At least I'm voting.  Both can be persuaded, by the party which claims to know and represent what "the American people" want.
      President Obama was doing what "the American people" wanted:  Preventing a depression required that money be spent to stabilize banks.  It required that money be spent producing and saving jobs.  Saving General Motors and Chrysler saved jobs at the automakers, their dealerships and their suppliers.  Health-care reform was aimed at  reducing the contribution of health-care costs to the growing national debt.  Keeping economic conditions and unemployment from getting worse and effecting an economic recovery, slow though it may be, made Democrats worthy of two more years.  "The American people" disagreed, and TV personalities, almost to a person, espoused that kind of thinking by them as reasonable.
      No person who survives an auto crash in critical condition goes home the next day.  Yet that's what "the American people" thought was possible with America's great recession.  Trial and error thinking has demanded another doctor, presuming that with another "doctor", our economy would have been well the next day.  The reason why people don't make bad decisions in medical emergencies is because they don't constantly hear and submit to other people who tell them to do what is contrary to their better judgment.  Yet, in politics, "the American people" allow surrogates to think for them.
      Granted, liberals are no more thoughtful than conservatives about what is best for government to be and be doing.  The more rational or centrist elements of either ideology could move the country forward.  But ideologies no longer control political agendas.   The contest is no longer one of political and social ideas; it is about whether the wealthy have the right (and should be allowed) to become richer at the expense everyone else.  
     Middle-class voters, whose incomes have been stagnate for the past ten years or more as incomes of the wealthy increased, and others who earn less than $250 thousand dollars a year, essentially said on Nov. 2:  If taxes of the wealthiest Americans are increased on Jan. 1, then, we want ours increased also.         
     How can Democrats regain the faith of "the American people" who use trial and error, flipping the coin and the thinking of others to make political decisions?  How will Democrats deal with "the American people" who allow questionable financial contributions to essentially buy their votes?  Better education might help; a better national character would demand it.  But Republicans won't allow either.  

Ronald
     
         

Friday, October 22, 2010

Strange Things Are Happening

Isn't it strange that so many people who have jobs and so many of those who don't have jobs seem to support the same political party this year?  Isn't it strange that people who have plenty of money and those who don't have nearly so much seem to support the same party?  And isn't it strange that people who have homes and those who can afford pay on their home mortgages are on the same political side as those who have lost homes and cannot afford to pay on their mortgages?   Something strange and troubling is happening.  

One would think that those without jobs would be thankful that condition have improved enough that their parents or siblings or children still have jobs and, as a consequence, can help them--maybe even provide a place for them to live--until things get better.  It's strange.

Ronald

Wednesday, October 20, 2010

Let Your Conscience Be Your Guide

October 21, 2010


To:  The Editor

     If you (Texas voters) had to let either Rick Perry or Bill White hold all of the money you possess, and did not intend to count it either when it was given or when it was returned, which one would you trust more to be custodian of this money?  Which would you trust more, Barack Obama or Newt Gingrich?  Nancy Pelosi or John Boehner?  Sharron Angle or Harry Reid?  Your Republican candidate for Congress or the Democrat?  If your plans are to vote for the candidates you trust less, will your conscience have been your guide or will it have died?
     I believe it has not died.  I believe that Republicans will likely take some seats in Congress, not because the polls suggest it is so, but because those who prefer the Democrat's agenda will choose to stay home on election day.  I believe that regardless of what voters have said in the polls, they will trust Democrats more to bring us through to a sustainable economic recovery.  President Obama has even said he will be willing to work with Republicans who may have managed to win only because his 2008 supporters are not so motivated this time.  
     But that cooperation will require that responsible Republicans be elected.  You'll remember, Obama tried to work with the present crop of Republicans with very little success, other than one or two Republican defections on a few very important occasions.  But where voters must choose between broadminded Democrats and Republican ideologues or less, Republican and independent voters (and the American people) would be better served if they helped elect Democrats who are willing to work with Republicans.
     The value of the Tea Party in this year's election is important in that it says to Obama and the Democrats that they have one more chance to get this thing right.  Most Tea Party members are smart.  They know that Republicans don't have a plan to bring about a quick recovery from our present economic condition.  They also know that Republican didn't have a plan to even bring us as far as Democrats have.  How do they know?  They know because Republicans never say specifically what they will do to hasten recovery if they are placed in charge.  Nor do they say specifically what they would have tried in 2009 to hasten recovery had they been in charge.  (Why Democratic candidates aren't emphasizing this on the campaign trail is a mystery to me.)
     The main reason why Republican can't fool all members of the Tea Party is because many (if not most) Tea Party members joined the movement and attended rallies only because they were invited to do so by employers, friends or family members whose invitations they thought they could not refuse.
     The news media and news analysts aren't can't seem to make up their minds why Republicans will or should win congressional seats in November elections.  They vacillate between the notion that Republican will win seats because a lack of enthusiasm by the Democratic base in an off year election and the desire of people polled to have the country move in in a different direction.  Both could be true, but neither might be.
     I don't believe people want a different direction for the country.  They want the same direction:  They want jobs and job security in the America they have known.  Democrats will not lose congressional seats in November because of the votes of the ten percent who are unemployed nor because of the fifteen percent who would like jobs:  Democrats will lose seats because of the anxiety of middle-class workers and the working poor who have jobs but fear they will lose them unless economic conditions improve.  Many of them seem inclined to place their hopes in the change of direction that Republicans would provide.  Many of these voters don't have the time to evaluate track records of political parties nor can they place slow economic progress in a proper perspective when rapid progress is what many people need and everybody wants.
     So Democrats will lose some seats, but not because they should lose them.  They will lose them because the combination of (1) voters who always vote Republican, (2) those who vote always Republican when there is no clear choice or reason not to, and (3) those who can be persuaded by reason, and are somehow are persuaded that Republicans will manage to get it right if they are only given another chance.
     But so much anonymous money has been poured into the campaigns this year to support Republican candidates that the process has been distorted and no longer necessarily nor properly reflects the will of the people.  The people--even those whose party is benefiting from this flood of financial contributions must decide if that's a fair advantage and whether it's an advantage they wish to retain.  A vote for a Republican candidate in this November election will be a vote that elections where outcomes continue to be determined by exorbitance amounts of money from unknown donors.  There have always been people who would not mind this practice.  But that had not be true of a majority of Americans.
    Many of us have already made up our minds how we will vote.  But there is a significant minority who are undecided and will be watching Fox and MSNBC more to help get a closer look at what is true (and claimed to be true) about the two parties and their candidates.  These most conscientious voters will have made the difference during this election.  
    I'm betting that on November 2 voters will prove that the American conscience has not died, that the ways we elect our representatives for government and the ways we pursue economic, political and social progress in the United States will confirm, again, that our sustaining American traditions and our deep-seated American values still matter.

Ronald
     

     

Monday, October 4, 2010

A Grand Partnership for America 2

October 4, 2010


To:  The Editor

     Everybody knows that needed progress on the economy has not been achieved primarily because businesses are not hiring, banks are not lending and too many consumers are choosing to save more and spend less.  Consumers are trying to offset their declining incomes by excessively using credit cards and home-equity loans.  If businesses hire consumers and if they stay hired and are paid equitably with higher salaried employees, these consumers will buy.   And if businesses promise to keep workers hired so long as profits increase, then workers will gradually consume more goods and services if they stay hired and paid equitably with higher salaried employees. even as they pay off debt and save.  
     Also, if people have secure jobs and equitable incomes, banks will be more willing to lend to such people.  If economic conditions warrant them companies would be expected to reduce the number of workers--or reduce the hours worked--and banks would be expected to reduce the number of loans they will approve in light of such declining incomes.  Renters would have an incentives to save so they can make the kinds of down payments that make them better risks in both good and tough times.   
     Some degree of certainly about the job market is necessary, but that certainty should have little to do with extending tax cuts for the wealthy.  When the workforce increases, increased purchasing power increases profits that offset the costs of doing business.  Wealthy investors benefits from rising stock markets and business profits.  Businesses and the wealthy have known for ten years that the tax cuts would expire in January.  Where was the uncertainty?  If our economy system has degenerated to the point where uncertainty renders that system no longer able to tolerate and eventually overcome reasonable risk, then its time to find out why.  
      Republicans say all the economy needs to reestablish that certainty is an extension of tax cuts for the wealthy for at least  two more years.  But if those tax cuts can do that much to help the economy during the next two years, why have the cuts not achieved that during the past two years, or for that matter, the past eight years?  What would wealthy do with their money the next two years that would generate jobs?  And if low taxes for the wealthy is so good for middle-class American workers, why not reduce their taxes for the wealthy to zero?  
      When Barack Obama campaigned about retaining the tax cuts for people earning less than $250 thousand per year, but allowing them to expire for those earning more, Republicans didn't complain.  Obama continued to express that intention after being elected president.  Republicans still didn't complain.  Republicans didn't argue against allowing the tax breaks for the wealthy to expire, even as they criticized all of the President's other attempts to end the Great Recession and establish for the long term a stable, energy independent economy.     
If Republican really believed that Obama's plans would not revive the economy, and that extending the tax cuts for the wealthy was necessary for that recovery, why were they not suggesting that tax-cut remedy much sooner?   
     The fact is that, if Republicans had requested as extenuation of tax cuts for the wealthy too soon, the President would have required Republicans to give Democrats something in return, such as support for a larger economic stimulus package, health-care reform with a public option, and more rigorous legislations on climate change, financial regulations, comprehensive immigration, education reform initiatives, etc.  And the President might have demanded passage of his legislative agenda before the November elections. 
     There had been indications that some kind of tax-cut compromise might be worked out between Democrats and Republicans before the November elections.  But significant political damage had already been inflicted on Democrats by Republicans, who criticized and refused to support Obama's initiatives despite most having had bipartisan input.  When they were not watering down Obama's plans, they were blocking them.   Now they want to compromise.
      One form of compromise would be to make the extension of the Bush tax cuts for the wealthy contingent (1) on Democrats retaining control of the House and a filibuster proof majority in the Senate, (2) on businesses showing good faith by increasing hiring prior to the November elections, (3) on banks promising to lend if businesses hire and (4) on extensions being limited to three-months intervals,  consistent with some prior established bench marks showing more banks lending, more businesses hiring, and more people working more hours with all workers receiving equitable pay rates.   Meeting benchmarks would merit other three- months extension of the tax cuts.       
     Democrats' decision to delay votes on the Bush tax cuts for those making less than $250 thousand per year until after the November elections should have the benefit of getting the base of the Democratic party out to vote.  The base will realize that if Democrats don't win in November with sufficient majority in the Senate, then Democrats, Republicans, nor Independents earning less than $250 thousand a year all will have their taxes go up in January.  And if tax cuts for the wealthy are as vital to economic recovery as Republican claim, then all Republican--even wealthy Republicans--should prove it by supporting and voting for Democrats, 
     At hand is another chance for Democrats and Republicans to work together, this time to establish time frames and benchmarks with banks and businesses that can enhance their confidence in the other, and to allow each to show that such reassurances can actually increase jobs and lending, and hasten economic recovery.
      Middle-class Republicans and Independents who had thoughts of voting for Republicans, and middle-class Democrats who had plans to not vote all but just sit back and continue enjoying their tax-cut extensions should consider changing their election-day plans.  

Ronald

Friday, September 24, 2010

     I was afraid of the boogey man when I was small, though I had never seen one.  I believe it because those whom I trusted told me he existed.  And despite the fact that they did not tell me how he looked or what he would do, for a while the possibility of his existence kept me quiet or in my seat.
     Obama and the Democrats are being portrayed as the bogey man by the real boogie man: Republicans.  Americans have been seeing the boogie man, and the damage he can do, for last ten years.  How could so many people not recognize him?  One reason is because they have the delusion that the boogie man must be black.  I alway pictured him as being black myself.  But if you check throughout history, bogey men have come in all shapes, colors, nationalities and genders.  Most recently, they happen to be Republican.  But the "Republican Tea Party" is saying, no, the boogey man is President Obama.
     Many Obama's supporters also are second-guessing the President on some of the decisions he has made.   Some say he should have been concentrating on the economy instead of health care and financial regulations.  
     Well, what else could he have done about  the economy and job creation?  Republicans and conservative Democrats would not approve a larger stimulus package.  Also, Republicans would have liked Obama to have been devoting all of his time on an economy and job-creation, because they were going to make sure nothing he tried worked.  He would have been criticized by Republicans for not being able to "walk and chew gum at the same time,"  and by Democrats,for acting as if he couldn't.
     Everybody knows that progress on the economy has not been made mostly because businesses are not hiring, banks are not lending and too many consumers are choosing to save more rather than spend too much.  If businesses hire, the people they hire will buy--if they stay hired.  If businesses promise to keep workers hired so long as profits increase, then workers will gradually consume more even as they save.  
     Also, if people have secure jobs, banks will be willing to lend to people with stable incomes.  If economic conditions warrant it, companies would be expected to reduce the number of workers--or reduce the hours worked--and banks would be expected to reduce the number of loans they will approve.  Renters would have an incentives to save so they can make down the kinds of payments that make them better risks.
     But there must be some degree of certainly about the job market.  That should have little to do with taxes.  When the workforce increases, increased spending increases profits that offset increased taxes.  If our economy system has degenerated to the point where uncertainty renders it no longer able to tolerate and overcome risk, then maybe its time to change the system.
      People say all the economy needs is to have the tax cuts for the wealthy extended at least two more years.,  If those cuts can do that much during the next two years, why have the cuts not done anything the past two years, or for that matter the past eight years?  What would wealthy do with their money in the next six months that they did not do the past six month?
      Barack Obama campaigned that he would retain the tax cut for people who earn less that $250 thousand per year, but allow them to expire for those earning more. Republicans didn't complain at that time.  
     Obama continued to express that intention after being elected president.  Republicans still didn't complain.  Republicans didn't argue against allowing the tax break to expire for the wealthy, even as they criticized all of the President's other attempts to end the Great Recession, and establish for the long term a stable, energy independent economy.     
      Which raised the question: If Republican really believed that Obama's plans would not cure the economy's ills, and that extending the tax cuts for the wealthy was necessary for economic recovery, why were they not mentioning that until recently?   The answer: If Republican had requested as extenuation for the wealthy too soon,  the President might have required them to support the implemention of some of his initiatives like a larger stimulus package, health-care reform, climate change legislation, financial regulations, comprehensive immigration legislation, education reform, etc.  He might have demanded passage of his legislative agenda before the November elections, and that they stop trashing the initiatives. 
     There is some hope now that some kind of compromise might be worked out between Democrats and Republicans before the November elections.  But irreparable political damage may already have been done to Democrats.  Republicans didn't help support Obama's programs despite most legislation being bipartisan in their composition.  And when they were not watering down Obama's plans, they were blocking them.   Now they want to compromise.
      Well how is this for compromise?  Make the extension of the Bush tax cuts for the wealthy contingent (1) on Democrats retaining control of the House and a filibuster proof majority in the Senate,  (2) on businesses agreeing to increase hiring prior to the November elections and on banks promising to lend if businesses hire, and (3) on three months extensions of the breaks after January 1, 2-11 producing more bank lending and business hiring, where the number of people working, the numbers hours worked, and pay rates of middle-class workers all increase.   If job and lending increase during the three-month period, extend them for three more months, and continue extending three-month periods every year for up to two years, or so long as there is significant job growth and lending accompany the extensions.
     Delaying the Bush tax cuts for those making less than $250 thousand per year until after the November elections would be an incentive to get the base of the Democratic party off their behinds and vote.  If Democrats don't win, then nobody get their taxes cuts extended.  If tax cuts are that vital to the economic recovery of the country, then Republican need to prove it by electing Democrats, who are the only party that can guarantee extension of the tax cuts since the President is a Democrat. 
      I'm still having trouble understanding how extending the tax cuts for the wealthy will help the economy recover.  But this is a chance for Democrats and Republicans to work together with banks and businesses to enhance their confidence and allow them to show that those reassurances can produce jobs.
      Middle-class Republicans who intend to vote Republican, middle-class independents who intend to vote Republican, and middle-class Democrats who had planned to not vote--and just sit back and wait for their tax-cut extensions-- need to consider changing their elections plans.

Ronald

Friday, September 3, 2010

Who is in charge during economic paralysis?

WHO MUST TAKE CHARGE, IF NOT GOVERNMENT, WHEN BANKS DON'T KNOW WHETHER, WHEN OR HOW MUCH TO LEND; BUSINESSES DON'T KNOW WHETHER, WHEN OR HOW MANY TO HIRE; AND CONSUMERS DON'T KNOW WHETHER, WHEN AND HOW MUCH TO SPEND AND SAVE?

Saturday, March 27, 2010

Switching Homes to Address Crisis

         SWITCHING HOMES TO ADDRESS THE HOUSING CRISIS


     Why is it not possible--or of no consequence--to have families move out of more expensive homes which they cannot afford into lower priced homes which they can afford, and that exist within the same general areas or within distances which do not cause an reasonable travel inconveniences and expenses to workers and families?  

     For purposes of illustration, two methods are suggested, using the following simplified numbers and situations representing various home buyers:

    HOME OWNER                     MORTGAGE                              MONTHLY NOTE

               (1)                                      $800,000                                        $8,000    
           
               (2)                                        600,000                                           6,000

               (3)                                        400,000                                           4,000

               (4)                                        200,000                                           2,000

               (5)                                        100,000                                           1,000

METHOD I
     Suppose that home buyers (1), (2), (3), (4), and (5) are in homes they cannot 
afford but can afford one of the lower priced homes listed.  Each homeowner could be allowed to assume the mortgage of one of the less expensive home that the family can afford, maybe the most expensive home the family can afford.  Ideally, (2 )has a home and monthly payment (1) can afford; homeowner (2) pursues the home of homeowner (3); and homeowner (4) buys the home of homebuyer (5).  The point is to get families into homes they can afford at this time.  The home of home buyer (1) could be sold as described in METHOD II.

     All mortgages that are endangered would be identified, and arrangement made, with government help, to work out exchanges among the lending agencies and home buyers.  Government financial interventions may be used, where needed, to expedite the mortgage exchanges.

METHOD II
     Suppose home buyer (1) can no longer afford a monthly note of $8,000 but can afford the monthly payment of $4,000 on house that Homeowner (3) owns.  And suppose Homeowner (3), whose house is paid out, would like to--and can afford to--buy a larger house, maybe the one home buyer (1) or (2) is buying.  Let them switch homes, with (1) now acquiring a mortgage on the home owned by (3), who would use that money paid for his home as down payment on the larger home.     

     Why would these not be possible--and practical--within a defined geographical area? And why might it not be possible even over a wider area if homeowners are willing, and find it to their advantage to travel farther to work if they can keep and live in their own homes?  A tax credit for gasoline and toward the purchase of a new car for transportation might be offered.

     In each case there would be a problem of matching compatible homeowners.  But whatever can be achieved might be worth the effort.

     Something similar happens with renters:  When family incomes become less, families move to apartments where the rent is lower. 

Ronald C. Spooner

Wednesday, March 24, 2010

Starting Health-care Reform with Blank Sheet

I have tried to figure out what would be the process of starting over in developing a new, bipartisan health-care bill, starting with, as Republicans call it, "a blank sheet of paper." Would that also involve somehow starting over with blank minds.
Every attempt to change or replace an existing program, set of by-laws, or other guidelines for operation, some person or group decides that some process needs to be either initiated or changed. There is seldom, if ever, a group of people assembling to decide what is needed or what needs to be changed.
Now, in the case of Health-care reform, if blank sheet means that nothing has been written down by when those responsible for writing the rules or guidelines, I can understand that. But that would not mean that participants would not have ideas written down in their minds or on their own pieces of paper.
So let's suppose there is a blank sheet of paper on which the eventual plan is to be written, how would the discussion begin? With the chairman asking if anybody has an idea about what needs to be done or how the group should proceed?
Suppose someone suggest that the first item to be discussed in formulating a health-care bill would be those to be covered by the bill. One party likely would support one level of coverage, and the other party another level, especially if party member have previously discussed the matter among themselves. Would such prior discussions be appropriate. One would expect that some prior thought would have been given to ideas before they are recommended for consideration. Otherwise, how would a committee member be prepared to justify the recommendation.
It makes sense, therefore, that each member would come to the committee meeting with ideas and their implementations written down in their heads or on paper. It would help if these ideas were not previously discussed with other party members. Members would them feel less inclined to support ideas simply because the committee member is a member of his or her party.
But that is where the problem lies.