Wednesday, November 16, 2011

Deregulations Enhance Uncertainty

       I'm having trouble understanding how fewer regulations lead to more certainty both in the operation of businesses and within the economic system where these businesses are seeking to find certainty?  Many businesses have become like poker players who want to stay in the games, where they have already become big winners, but only if their chips are given double value.  Playing that kind of game certainly makes increasing their winnings more likely.  But it also more likely--if not inevitably--makes more of the other players bigger losers.
       Deregulating is like suggesting that fewer rules and officials increases the chances that football and basketball games will be played more fairly.  While there certainly can be too many rules in a game, such as requiring football linemen to always be a certain number of inches from the line of scrimmage, or requiring the quarterback to not take more than four steps before throwing a pass or handing off the ball.  The rules applying to football now seem about right.   From time to time rules are changed as circumstances justify them.  But the rules aren't changed just because some running backs aren't able to make runs pass the line of scrimmage or some quarterbacks can't complete enough of their passes.
      So far, I have not heard the argument that too many regulations being properly monitored is what caused our financial disaster.  President Obama has said he is willing to review all regulations and make changes where a good case can be made for changing or eliminating them--and already has changes some.  But deregulating so that some businesses can take unfair advantage of either consumers or other businesses is kind of certainty that reasonable people would not consider constructive in an economy struggling to recovery its better days.
     Businesses have never had the certainty that they would make profits--or even survive.  Businesses go our of business somewhere, everyday.  Uncertainty is built into American capitalism.  But now a days, some big businesses want regulations that will guarantee that their teams always score touchdowns, that dropped balls will never be called a fumble, and that they will not be required to play a better game than the competition in order to win.
     When I was a boy, our baseball games often were played in the streets with the balls and bats of other children.  But the boy that owned the bat (a broomstick) and ball (a wormed tennis ball) didn't say that unless we gave him five strikes he was taking his bat and ball home.  Some businesses want five strikes and their right hand touched at first base before they can be called out.  They can say that because they own the bats and balls.
      Republicans say that placing higher taxes on businesses hurt job creators.  But how can that be true?  Businesses say they are refusing to hire more workers, not because they don't have enough money, but because there either are not enough of the kinds of people they need to hire or there is not a sufficient market for more of their products or services.  How then can giving these businesses access to more money by reducing their taxes produce more qualified job applicants and more consumers for their products?  And how can taxing them a little bit more and reducing their profits a little bit change those reasons?
     What kinds of regulations and certainties do businesses want, the kinds that existed before Barack Obama became president--the kinds that caused the Great Recession?  Are these the kinds of regulations and certainties that Republicans are pledging to reinstate?  Overturning regulations intended to prevent the kinds of intentional missteps that caused the Great Recession cannot be justified.  Neither, however, can over-regulating.  
     Who, then, should make decisions about what regulations are appropriate to equitably distribute uncertainty, and fairly serve all classes of Americans?  And by what processes are fair and just regulations most likely to be achieved?  Fair or not, it appears that those who own the bats and balls are most likely to make those decisions.  And whatever decisions they make will be proclaimed also to be good for the rest of us.
     An emerging problem with our American capitalism is that it is operating within a climate of uncertainty reinforced by internal conflicts and contradictions about the importance of propriety, ethics and morality in our society.  Winston Churchill called old Russia "a riddle wrapped in a mystery inside an enigma."  That's beginning to define attitudes, politics and economics in America.

Email: rcspoon@earthlink.net
Blog:   ronaldcspooner.blogspot.com

Sunday, November 6, 2011

Identifying and Assessing Obama's Economy

    The claim is being made by Republicans that the present US economy belongs to President Obama.  They're really talking to people who they hope do not know that Obama is dealing with a terrible economy produced by the actions of President George W. Bush:  two unfunded wars (one a war of choice), tax cuts that that were not paid for and which did not produce jobs, an unpaid-for prescription drugs plan and the Great Recession.  Republicans are hoping that lll of these economic missteps have either been either forgotten or never known.   Be that as it may, these are the main elements of the Bush's economy which ended in January 2009
     But let's see what constitutes what Republican are choosing to call "Obama's economy" since January, 2009.  If the present economy is Obama's economy the he certainly could only take credit or blame for those things that are the result of his ideas. 
(1) President Obama inherited Bush's Great Recession. (That was Obama's fault because, knowing what the economic condition of the country was, he still chose to seek the  presidency.)  
(2) He stabilized the banking system and prevented a depression.  (3) He established regulatory reform intended to prevent the same reasons to cause another recession or exacerbate the present one.  
(3) He extended unemployment benefits during the recession.  
(4) He reduced taxes on middle-class workers.  
(5) He pass a health-care law, which even Obama realizes needs fixing.  (He got the best he could get with a shaky super Democratic majority in the Senate.)  
(6) A treaty was signed with the Soviet Union.  
(7 Job loss steadily decreased and eventually has resulted in job gains.  (The unemployment rate remaining at 9.1% reflects that job gains are keeping up with growth of Americans entering the job market.  More jobs are needed to bring that percentage down.  Republicans are trying to make sure that does not happen.  
(8) Obama saved the three American auto companies, saving the jobs of hundreds of thousands of workers.  
(9) He passed a stimulus plan that created and saved the jobs of over 4 million teachers, fire fighters and policemen and policewomen, though he hoped it had done more.  (Republicans say that the stimulus failed, though they knew it had some success because many of them accepted the money to save jobs in their states.)  
(10) Several Al Caeda leaders were killed, including Osama bin Laden, and Moammar Gadhafi was deposed because of the leadership of Obama.  
(11) The President is trying to solve the nation's short- and long-term economic problems with a rational blend of $4 trillion worth of spending cuts and revenue enhancement.
(12)  President Obama has been willing to compromise: consider tort reform in connection with health-care reform and place entitlements on table in order to address national debt consistent, both consistent with the voters wishes that there be more bipartisanship in Washington and contrary to the wishes of his political base.
     These are only a partial list of the things the President has done and tried to do during the "Obama economy."   And all that Obama has done still has failed to completely rescue the country from the economic wounds inflicted by the Bush Administration.  Most of the people who are still out of work were put out of work by the deeds of  George W. Bush.   Their unemployment is not part of Obama's economy.  And Obama has not started any new wars. 
      However, wealthy people, who were further enriched by the Bush tax cuts, have not had many children fighting in the wars that George W. Bush started.  Wealthy people whose families have not as a group joined fellow Americans on the battlefields of Asia and the Middle East, should feel it their responsibility to support the nation with some of their money during this period of financial crisis.  They should gladly help restore a thriving economy in this country so it can provide jobs and proper care for those children of the poor and middle class who did their part fighting, dying and being injured on those dusty battlefields.  They did it for all Americans.  These wealthy Americans will more than make those surtaxes back in a thriving economy.
     Despite the consistent and often irrational opposition by the Republican Party, the Obama presidency has been quite good so far.  When Republicans say that because of what Obama has achieved--or tried to achieve--they cannot stand four more years of Obama in the White House, they're right:  They can't stand it, but the majority of the American people probably can.
     This economy belongs to Obama only (1) if he caused the economic troubles (He didn't.), or (2) if his attempts to fix the economy had Republican support. (They didn't.), or (3) if the economy--regardless of its condition when Obama became president--got even worse.  (It didn't.)
     If the Super Committee fails to come up with the Big Deal, look of our credit ratings to fall.  And if Republicans gain the White House, expect  ratings to sink to A or B level, and interest rates to skyrocket.
     Despite the "Occupy" movement, Senate Republicans continue with their votes on jobs to scream, "I DON'T HEAR YOU!!!!!!
     Why the media think Obama will be blamed in the 2012 for things he did not cause is either a reflection of their own poor judgement or their low opinion of the judgment of the American voters.  
     Voters may have bad understandings because of media failure to challenge lies,  allowing unchallenged lies, too often, to be perceived as truth.

Thursday, November 3, 2011

Raising Cain (A Revision)

 I'm beginning to be concerned about the way Herman Cain is being treated during the controversy about his alleged sexual harassment.  I'm concerned as a black (I learned that from Herman Cain).  I'm concerned for the same reason that many--if not most--women think he is getting his due.  I'll admit, there are some things about which I'm not able to be objective--though in those circumstances I realize that I could be the one that is wrong. 
     I am not aware of every statement that Herman Cain has made related to accusations against him by potentially as many as three women who either worked under him or in his presence as he served in some kind of leadership position.  My reaction has not been to whether he is guilty or not guilty as accused.  My reaction is to the media having rendered him "guilty until found innocent" in Cain's words.
     There are people of various persuasions who are pulling for the women to be telling the truth and others pulling for Cain to be telling the truth.  One or the other is not telling the truth, or both are telling the truth.  From what I have heard, there does not seem to be enough information surfacing to know what the truth is.
     This is what I know.  For some reason two women surfaced to announce that they had been sexual harassed by Herman Cain.  I have heard no reason why these women chose to release that information or otherwise make that assertion.
Did they not like Herman Cain because he is a black American?  Was it because he is a black American conservative?  Was it because it because they do not believe a man who has done such things should ever become President of the United States?  Or was there some other reason?  Regardless of what it was, there was something that motivated their decisions.
     The women want Cain to grant them the privilege to speak out about the alleged sexual harassment.  But why would he do that?  If they are telling the truth, he won't want them to tell it.  And if they are not telling the truth, why would he want them to  lend support to the suggestions that are being promulgated by the media?
     The media is saying that Cain is changing his story.  Well, based on what I have heard, he has.  But the story seemed to change when he was attempting to explain different aspects of the history surrounding the accusations.
     The latest information to surface suggest that during a previous senatorial campaign eight years ago he told his campaign manager that there had been a sexual harassment complaint made against him that might surface as an issue in the campaign.  He did not say he had been guilty of sexual harassment.  The media is treating that information as a confession of guilt.
     This manager ends up in Rick Perry's struggling campaign.  Was he added to the Perry team because he said he had some useful information? Did Perry know about that information before it was released?  Probably not.  He would have been provided a shield of deniability. 
     Cain said that he may have said or did something that someone might have interpreted as sexual harassment, which is possible.  We don't know the details of how the case was resolved.  Was Cain found to be guilty or were the findings inconclusive for some reason?  And if the evidence was conclusive, why did the women settle for merely a reportedly $35, 000.00? 
     A second witness has surfaced who says that he saw the sexual harassment happen, and a third woman who said she was sexually harassed by Cain and started to file a complaint but decides against it.
     I don't know why Herman Cain is receiving persistent attention to his possible involvement with these women, while the media stopped questioning Senator John McCain during his run for the presidency when he said he would answer no more questions about an alleged extra-marital affair.  These two acts are certainly different situations but not different enough in the moral severity to deserve such unequal levels of coverage. 
     What is it that Cain is supposed did?  Was it something he said, something he did or something he wanted to do?
     Was Cain a Republican at the time of the alleged incidents?  Were the women Democrats?  And if they were, was the incident made more objectionable because Cain was a Republican?
     Or was it an arrogance within Cain that made him feel empowered, because of his position, to seek liberties with these women that resulted in confrontations exaggerated because of ideological conflicts between the parties.
     I still have not idea what the truth is.  But neither do the media, though they talk as if Cain is the only player not telling the truth.  Has anybody volunteered to take a  lie-detector test?
     

Wednesday, November 2, 2011

US Needs Blend of Ideologies

     Sometimes conservatives are right.  There is some merit to their argument that safety nets create dependency by people who might otherwise be self-sufficient if they were so compelled and strove to so be.
     The Republican plan of having Social Security remain as is for those who are 55 years or older may be all right if Social Security for those younger than 55 years was phased out so that younger people become increasingly more responsible for more of their retirement needs.
     For example, a person who is 54 years of age would receive at 65 years of age 96% of expected Social Security and Medical Care coverage and would pay 96% of expected Social Security taxes.  That person will have 11 years to save up enough money to make up the differences in benefits.  They could buy some kind of supplementary insurance with the savings, save it, or invest it..
     A person who is 52 would receive 92% of expected benefits from SS and MC.  SS taxes would be 92% of expected cost.  The person 3 years longer (13 years)  to prepare for reduced benefits.
    A person who is 50 would receive 88% in benefits, pay 88% less in cost and have 5 years longer (11 years) to save for retirement costs.
    A person who is 48 would receive 84%, pay 84% and have 7 years longer to save (17 years).
    Finally, a person who start work at age 22 would pay for 46% of coverage, pay 46% of the cost, and have 47 years to save for retirement.
    This scheme has possibilities if people save, if they know how, where, how much and when to save and if they can anticipate or determine what their retirement needs would be in the future.  
     For wealthy people--many of whom are among those most critical of people who need SS and MC--the uncertainty of those needs is not a problem because most of them have inherited wealth.  Or as Rev. Al Sharpton recently put it: These are people who "were born on third base, and are acting like they hit a triple."
    But for those who must fit retirement plans into the need to live in the present on modest incomes, this is a problem.  How much health and life insurance can a family afford?  How well will children be clothes and fed?  In what kinds of homes and neighborhoods will the family live?  What colleges and universities can the children attend?  How many and what kinds of family vacations will there be?  Must both spouses work?    
     These are just some of the decisions that would affect the kinds of retirements for which people can reasonably prepare.  This can be done.  There are people who are doing it.  But people must have plans for doing it successfully.  High school economics classes could be places where students learn how to make such plans.
     But there seems to be a refusal by most conservatives to realize that not all people have the same financial skills or interests.  They don't have the same families,  parents, spouses, colleagues, associations through organizations, or teachers that can influence their skills, interests and commitments.  For these people a mandatory system of retirement planning is necessary.  Social Security and Medicare both anticipates and addresses those needs.
     Does Social Security tend to make people less independent in providing for their own retirement?  For some people that is true.  For most people, the best we can say is "we don't know."  But enabling people to prepare for their own retirement in a mutual effort with others still seems like a reasonable approach to address that uncertainty.  People pay into pension plans or buy insurance: to address periods of need which may occur at unexpected times and during periods of family uncertainty--like the present.  Social Security is multiple insurance.
     Conservative are right, however, in suggesting that our welfare system tend to promote and encourage dependency by people who have the abilities and talents not only to take care of themselves but also to make significant contributions to our economic, social and political systems.  
      But how can that talent be harnessed?  And how can we identify those who have the potential to become independent, contributing members of society, and distinguish them from those who likely will need our help?  For some people, taking care of the most vulnerable is more economical--and humane--than trying to make everyone financially independent and having them suffer the consequences if they aren't.  Safety nets are important. 
     Unfortunately, too many conservatives have acquired an unChristian-like indifference about those who come upon hard times.  They believe that the conditions of the less fortunate are always their fault, and never the fault of the circumstances which both generate and perpetuate their conditions.   Poor schools and poor teachers, for example, contribute to poor performance as adults, whereas
having the best schools and teachers contribute to success.  A country, therefore, must be guided by a blend of conservative and liberal ideas because its people will always be a blend of those who need help and those who don't.     
      Liberals--and perhaps most conservatives--believe we must prepare those who are most able to be independent, and care enough to help those who are less able so they can experience a quality of life that at least satisfies their desires and basic needs.  Most poor people don't need much to be happy, and those who are not happy with their conditions usually find ways to overcome them.  Many of our most successful people emerged from very humble circumstances.
     Lee Hamilton states it in a recent News column that the American people "don't want big government or small government, but smart government.  They want our political leaders to set ideological purity aside, and just get things done."  For everyone, I might add.  Voters get another chance in 2012 to get it right.