Codswallop and Nosh[i]

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They didn’t cause the problem, but will pay the highest price

The world’s impoverished nations are most at risk of devastation from the consequences of a warming climate, with Bangladesh and sub-Saharan Africa in extreme jeopardy. These economically strapped countries contributed very little to a problem caused primarily by wealthy industrial states, but they will pay the biggest price.

The World Bank estimates that it will take $100 billion a year to ameliorate the effects of climate change in poor countries. The United States’ share would be $20-30 billion. Congressional leaders complain that this is too much–––but, we spent $60 billion to deal with the ravages of super storm Sandy. It doesn’t seem just that we take care of our own and then ignore the disasters that our life style causes other nations.

Critics of government spending on a social safety net complain that too many of the aid recipients are unworthy, and that we cannot afford to maintain tax-and-spend programs that transfer money from the job-creating wealthy to the undeserving poor.

Who is deserving of taxpayer-supported aid?

Most people are familiar with the Supplemental Nutrition Assistance Program (commonly known as Food Stamps), Medicaid, Women and Infant Children (WIC), and other direct aid programs.

But there is a category of public assistance that most people tend to ignore: tax write offs for private jets; mortgage interest deductions for yachts and second homes; the classification of  money earned from hedge fund investment as capital gains rather than regular income, thus reducing taxes from 39.6% to 23.8%; an annual subsidy of more than $80 billion by the taxpayers to the 10 largest banks; another taxpayer subsidy of  approximately $80 billion per year paid to corporations by local and state governments as incentives to do business in their jurisdictions. Senator Tom Coburn (R-OK) understands this problem, and he said it was time to scale back “ludicrous handouts to millionaires that expose an entitlement system and tax code that desperately need to be reformed.”  Thanks to Nicholas Kristof for these examples.

Elected leaders: should they follow or lead the crowd?

A nationwide USA Today/Bi Partisan Policy Center poll concluded that 80% of Americans want their members of Congress to cast votes that mirror the opinions of their constituents. I would agree if it could be assumed that the voters did their homework on issues and were informed about the nuances and consequences of policy choices. Our elected representatives have a responsibility to explain issues rather than merely parroting bumper-sticker wisdom spewed out by the ideological fringes in their districts/states. The idea that the men and women in Congress ought to poll their districts and vote according to the majority rather than make an informed policy decision is repugnant.

Risible or pestiferous?

President Obama’s polling is not good, with his approval hovering around 45%. But it is amusing to listen to Congresspersons point to Obama’s lack of popularity as evidence of his failures. The public’s approval of Congress stands at 13% with a 77% disapproval.

The Center for Worker Freedom is part of Grover Norquist’s empire. The organization complains regularly that unions are political. Yes, they are. So is the United States Chamber of Commerce, and so are the PACS affiliated with large businesses. In addition, companies and industry pay millions in fees to lobby Congress.

According to Bloomberg News, the ratio of top executive pay to the average worker in General Electric is 491:1; Lockheed Martin, 315:1; and, the President of the United States to the average government worker is 27:1.

What many have suspected seems to be a fact: The primary purpose of many candidates who run for Congress is to get elected so they can collect vast sums of money to get elected again two or six years later.

The 113th Congress holds the dubious distinction of being the least productive in history. The House was in session for only 135 days in 2013 and for this year has scheduled 97 days of work prior to the November, 2014 elections.

A well-regulated militia?

Kansas Governor Sam Brownback signed a bill into law on April 16 that strips the power of local governments to enact restrictions on the sale of guns and ammunition, and on how guns can be transferred, stored and transported.

The National Rifle Association hailed this legislation as a model for the nation. The wording is clear: “No city or county shall adopt any ordinance, resolution or regulation, and no agent of any city or county shall take any administrative action governing the purchase, transfer, ownership, storage or transporting of firearms or ammunition, or any component or combination thereof.”  I guess the principle of all politics being local has been repealed.



[i] Please excuse the weird words in the heading and the last subhead. I am not trying to show off, but am having fun with Peter Meltzer’s book, The Thinker’s Thesaurus.

 

Something is Out of Balance Here

Hunter Hawaii  and more 073Is America’s ever-increasing gap between the very rich and everyone else the “defining challenge of our time” as President Barack Obama proclaimed? Or (as some on the political right argue) is it a natural cycle of capitalism that will eventually lead to accelerated economic growth and increased employment?

I’ve read books and papers written by economists and theorists; I’ve listened to speeches from politicians and advocates; and I know people who are on both ends of the high-low economic spectrum. My conclusion is that most of the economic theory is at best arcane, and the political debate is more often than not ideological hooey.

My opinion is that inequality in America is a national disgrace, and my reasoning is found in Chapter Five of The Idea of America. But mine is primarily a subjective opinion grounded in the belief that we are faced with a moral crisis, and the heart of the issue is fairness rather than economic theory. And this notion of fairness has a face: Donna, in Missoula Montana, one of the people on the low end.

Donna is a single mother. She lost a job she loved and her home when her employer went out of business during the recession. She and her two children live in a mobile home adjacent to a campground I stayed in on my 2012 journey across the USA.

Donna told me, “My life consists of getting the kids up, dressed, fed and off to school; catching a bus to work, being on my feet for six hours, then hurrying home to be there when the kids get back. I help them with their homework, try to make a meal out of our food stamp allotment, get them to bed, and then relax for a short while before I go to bed. I don’t know what I will do when school is out next month. I can’t afford day care and I can’t leave them alone. But I have to work.”

Now juxtapose Donna and her situation with the high-end earners, America’s corporate executives.

In the face of their opposition to extending unemployment insurance for the long-term jobless, their advocacy for slashing their own taxes, and their fight against an increase in the minimum wage–––those at the top of the business pyramid have taken good care of themselves.

These fortunate few include the leaders of the nation’s financial industry: Bank of America paid its chief executive total (salary, stock, incentives and bonuses)  compensation of $14 million in 2013; JP Morgan $20 million; Wells Fargo, $19.3 million; Citigroup, $17.6 million; Goldman Sachs, $23 million; Capitol One, $18.2 million.

In 2012 corporations in the S&P 500 index compensated their chief executives at a rate 354 times that of the average employee. The late Peter Drucker, a prominent business consultant and professor, recommended a 20-1 ratio. It is no wonder that America’s corporations are seeking to repeal a provision in the Dodd-Frank financial reform bill that requires the ratio to be published each year.

To bring it closer to home, most Americans receive electricity and/or gas from a corporate utility. The chief executive officers of these entities often earn total compensation of between seven and 10 million dollars a year.

What is the gap between the utility CEO and other employees in their company? The most visible of those employees are linemen, the men and women who brave the elements to keep our lights on and the air conditioners running. They work long hours, often in inclement weather and dangerous situations, climbing utility polls in fierce storms to fix downed power lines. For their efforts they are paid modestly. The median salary for a journeyman lineman is less than $70,000 with minimal incentives.

Why should we care about this vast gulf of income inequality? We should care for many reasons, some economic and some social. As I wrote in the book, “We should care as a matter of human decency and because a growing inequality destabilizes a society… People at both ends of the wealth scale lose a sense of connection with one another, a sense that we are united as a nation in a common cause.”

Thomas Piketty, a French economist and author of the book Capital in the Twenty-First Century, wrote, “The risk of a drift toward oligarchy is real and gives little reason for optimism.” Americans should halt this drift before it becomes established policy.

 

 

 

 

 

I Agree with Mitt Romney

Republican Presidential candidate Mitt Romney was right on point when, in announcing Congressman Paul Ryan as his running mate, he said, “I happen to believe that this is a defining election for America; that we’re going to be voting for what kind of America we’re going to have.”

The divide between Romney’s vision of America and that of President Barack Obama—and between the Republicans and Democrats as a whole­­­—could not be more sharply defined. It is a divide between two diametrically opposed moral visions, and is clearly reflected in the candidates’ positions on issues ranging from military spending to the nation’s commitment to the poor and physically vulnerable.

It is also clearly set out in the two candidates’ views on the qualities they will look for in future appointments to the United States Supreme Court.

Obama’s opinion on the matter is reflected in his appointments of Justices Sotomayor and Kagan. Romney signaled his ideas when he named Judge Robert Bork as his senior advisor on court appointments. Politico reported that “On his campaign website Romney says,  ‘I will nominate judges in the mold of Chief Justice Roberts and Justices Scalia, Thomas and Alito.’”

The future of the Supreme Court is important to consider in this election because the next president will most likely have the opportunity to shape it for decades to come. Justices Scalia and Kennedy are both 76, Justice Ginsberg is 79, and Justice Breyer is 74.

Progressives should shudder at the thought of a Romney appointment replacing Ginsberg and/or Breyer with someone in the mold of Scalia, Thomas or Alito. This would give the conservative block an unassailable majority with which to undo what I see as a generation of social progress in such areas as health care, civil rights, affirmative action, and work-place issues.

Conservatives, on the other hand, should similarly be worried about the prospect of Scalia and/or Kennedy being replaced by a progressive justice who might tip the balance around such topics as women’s reproductive rights, regulation of businesses, protection of the environment and campaign financing.

Most of the political debate rages around specific issues: healthcare, assisting the poor and physically vulnerable, entitlements, tax and spending policy, military budgets, infrastructure repair, regulating financial institutions, protecting the environment, (to name a few).

Anyone who is following the race from either side of the divide knows the particulars of Obama’s and Romney’s positions on these and other contentious issues.

But I am concerned about something broader than the specifics. I’m wondering which  “vision” of America each candidate would bring into the Oval Office.

In my opinion, to be an informed voter, each of us ought to reflect on our own vision for this nation, and then compare that with those of the two candidates. Policy particulars flow from a well-defined vision, and to know where a President intends to lead the nation requires us to discern his philosophical mindset about the role of government in service of the common good.

I have done this exercise and, while my vision doesn’t perfectly align with his, there is a clear similarity between my hopes for America and those expressed by Obama.

I share my reflection below (which is paraphrased from my forthcoming book The “Idea” of America: Are the Founding Principles Eroding or Enduring?) and I invite you to share your reflections at the end of this post or at The Pub.

The America I envision is not one that moves back to the “old days” that were ruled by a predominantly white business aristocracy. My America is a nation that embraces the words expressed and recorded in the Declaration of Independence: It is a self-evident truth that all people are created equal and “endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.”

My America upholds and maintains the intent of the nation’s founders as expressed in their Preamble to the U.S. Constitution: that the Constitution was established for the purpose of forming a more perfect union, establishing justice, ensuring domestic tranquility, promoting general welfare, and securing the blessings of liberty for ourselves and our posterity.

I acknowledge that concepts such as “perfect union,” “justice,” “general welfare,” “domestic tranquility,” and “liberty” might mean different things to different people at different times in history. Their meanings are certainly different in today’s economically, religiously and ethnically diverse America than they were to a group of white, economically-elite, bright and courageous but slave-owning men who made up the homogenous group known as “founding fathers.” But the richness and the promise of the words have served us well since they were adopted at the Constitutional Convention in 1787.

My America holds high the original motto of the United States, E Pluribus Unum: “out of many, one.” While the Congress in 1956 replaced it with “In God We Trust,” it remains inscribed on the official seal of the United States.

My America embraces the words of welcome on the Statue of Liberty’s pedestal: “Give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse from your teeming shore. Send these, the homeless, tempest-tossed to me, I lift my lamp beside the golden door.”

For me, America’s principles are clear: Our nation was built on a commitment to equality, justice, freedom and democracy and our first leaders made a promise to ensure the blessings of liberty and to promote the general welfare for all the people and their offspring.

America was founded as a nation dedicated to building unity from diversity, and to welcoming with open arms all those who are deprived of liberty, justice and opportunity in their homeland. Our agreement was to work together democratically versus being subjects to a monarch or any dictatorial regime. In doing so we remained committed to a democratic rule in which the freedom to dissent is protected and encouraged, the rights of the minority are safeguarded, and our proud duty to hold our elected representatives accountable to us is maintained.

My America is a democracy that depends on rational debate among reasonable people to resolve differences. In my America, politics is an honorable profession in which elected representatives seek consensus solutions to seemingly intractable problems, never forgetting that their duty is to the people and to upholding our foundational principles, rather than rigidly holding to partisan dogma.

This latter point is where my vision of America has been derailed as her leaders have become lost in a cacophony of brash words, rigid dogma, and a rapacious unwillingness to seek common ground among competing ideologies. The result has been three years of a gridlocked Congress and a frustrated and dispirited citizenry.

While both parties share in responsibility for our obstructionist politics, I give my nod to the Republicans as the primary culprits.

According to a new book by Michael Gurnwald of Time Magazine and reviewed in The Hill on August 12, 2012, “hours before Obama was to pitch his stimulus directly to Republican House members,” then House Minority Whip Eric Cantor (R-VA) declared “We are not here to cut deals and get crumbs and stay in the minority another 40 years…We are not rolling over…We are going to fight these guys… We’re not going to lose any Republicans.”

According to Gurnwald, Vice President Joe Biden told him  that before Obama’s inauguration “I spoke to seven different Republican Senators who said, ‘Joe, I am not going to be able to help you on anything…’ The way it was characterized to me was: ‘for the next two years we can’t let you succeed in anything. That is our ticket to coming back.’”

Political history of the last four years certainly lends credence to Biden’s words and the partisan effectiveness of the Republican tactics. The Republicans in the Senate have successfully blocked much of the Obama agenda during his first term by what I regard as a Constitutional misuse of the filibuster rule.

While obstructionist tactics have worked for them politically, the future of America has been imperiled through gridlock on almost every substantive issue, including deficit reduction, infrastructure repair, reigniting the economy, budgets, farm policy, court appointments, and international treaties. I am sure that their right wing cheers their behavior, but what is despicably disingenuous is that they then blame Obama for not getting anything done.

So Romney is correct: “This is a defining election for America… we’re going to be voting for what kind of America we’re going to have.”

That is my perspective on the divide and on “My” America. What’s yours?

Disgrace: Romney Pledges to Repeal Healthcare Law

A note from the editor: The following article is written by David Prescott. David  is a long-time friend and colleague; a retired businessman from Princeton, NJ; a big thinker and an ardent environmentalist now living in Santa Fe, NM;  and a man of impeccable integrity. What do you think about David’s ideas? What would you add? Add your thoughts at the bottom of this post, or go to The Pub

Mitt Romney pledged that he would repeal “Obamacare” on his first day as president if he wins. The ultra-conservative billionaire Koch brothers have allocated $9 million from their super-PAC Americans for Prosperity to run ads in swing states calling for repeal of the law and thus for the defeat of President Obama in the November elections.  How quickly the Republicans forget!

The foundation of “Obamacare,” the individual mandate, upheld as constitutional by the Supreme Court, was a report and recommendation in 1989 by the Heritage Foundation, a conservative think tank.  The idea was incorporated in Republican sponsored legislation as a viable alternative to the health care reforms sought by President Clinton.  Bob Dole, a Republican presidential candidate, was a co-sponsor of the bill.  Mitt Romney endorsed the bipartisan Wyden-Bennett bill whose centerpiece was the individual mandate in a 2009 interview with “Meet the Press.”  He has now come 180 degrees.  Why?

The reason for Romney’s switch is that his money sponsors—people like the Koch brothers— believe that the United States should be a “you’re on your own” kind of place where the smart and wealthy and well-placed take care of themselves and the others, “Oh well, tough luck, you’re on your own.”  Sorry that you can’t afford the health insurance premiums because you are unemployed or because, as most Americans, your income has not risen in real terms for about 40 years while health insurance costs have sky-rocketed.  Sorry that you have a pre-existing condition that won’t be insured because the financial risk to a corporate interest is deemed too high to take.  There is always the choice of suffering with your condition or incurring enormous debt, so large in fact, that you are likely to have to file for personal bankruptcy.

The opposition to “Obamacare” is only a part of the picture. The deck is badly stacked against ordinary Americans already as a result of the continued rising economic inequities in our society.  This information is not new.  Financial inequality—the gap between the rich and the rest of us—has been growing over the past 40 years.  Now, 1% of our citizens own 36% of the nation’s wealth.  The top 20% own 85% of United States’ wealth leaving the other 15% shared by 80% of our people. The economy essentially doubled in the last 40 years.  Half got little benefit as the median wage grew only 7% during that period. According to recent statistics, 75 million Americans earn less than the median income of $34,000 per year and 25% of all jobs pay less than $22,000 per year, the Federal poverty level for a family of four. These statistics should enrage every working man and woman in America creating purpose for social unrest.

This disturbing  growing wealth gap benefits few to the detriment of many and contributes significantly to long term national economic decline ultimately depriving everyone irrespective of their current economic or social status.In my view it would be a shame for us to continue this trend by electing a president who promises to begin his term by overturning a signature safety net law that finally bucks the trend.  I don’t want to live in a nation that tells its sick and disadvantaged “you’re on your own.”

 

 

Conflicted on Taxes

The Republican Party agenda on taxation is conflicted: Republicans are in favor of slashing taxes … unless the tax cut benefits people who are not wealthy, and is proposed by Barack Obama.

The President has asked Congress to cut every workers payroll tax bill in half, from 6.2% to 3.1%. His proposal also reduces the employers’ share of the tax by 50% on the first $5 million of a company’s total payroll.

Are the Republicans rejoicing? No, they are fighting the initiative because it would fund the $248 billion cost by imposing a surcharge on incomes exceeding $1 million.

They, instead, would prefer to see the 2% payroll tax holiday expire on December 31, 2011, a move that would effectively increase taxes on everybody.

Senator Jon Kyl (R-AZ) claims that the current 2% reduction “has not stimulated job creation” and believes that it would hinder economic growth by imposing “more taxes on the people who do the hiring.”

I am not an economist, but Kyl’s claim strikes me as a disingenuous one. It simply makes sense that adding $1,000 in the paychecks of working people will in fact stimulate the economy, i.e., when that extra money is spent in neighborhood stores; and, most analyses I read about unemployment issues report that big businesses are not taking the lead in hiring people, small businesses are.

Big businesses are instead sitting on their record profits and paying out huge bonuses. For more on this, click HERE and  HERE.

There is another crucial factor in the equation when discussing Social Security taxes. The cut off for wages on which the payroll tax is assessed is $110,000, meaning that a worker making $110,000 or less pays the tax on 100% of wages earned. Conversely, a person making a million dollars a year pays tax on approximately 10% of their income.

If all of these earnings were subject to the social security payroll tax it would rise $100 billion would be raised each year— easily funding the cost of the Obama program and wiping out the projected long-term deficit in Social Security. For more information click HERE. (Note: this study was published in 2010 when the ceiling was $106,800)

Yet again, instead of supporting solutions for the long haul,  the Republicans adopt a policy position that hurts American workers and further damages the economy. Why? They believe that suffering workers and a bleak economy will hurt the President’s reelection chances.