Saturday, April 30, 2011

GOP and the Party of Crazy

According to former Colorado Republican congressman - and occasionally ranting lunatic - Tom Tancredo, President Obama withheld his birth certificate on purpose to "make the GOP look nuts."

Hmmm ... ya' think?

Then again, I don't think the GOP has needed any help looking like the "party of crazy." They've been handling the nutcase side of politics rather well on their own. Though, even if it wasn't intentional, once the nuttiness began, I wouldn't doubt Obama was shrewd enough to allow it to happen. Yet, if he really wanted to go that route, he would have let the whole thing run throughout the primaries of 2012.

Tom Tancredo continues his analysis by exclaiming that Obama pulled the ultimate Muhammed Ali "rope-a-dope." I wouldn't disagree, though the most amusing part is Tancredo identifying the GOP as "the dope." He, of course, would be leading candidate in that race from his extreme comments and rather pathetic runs for president and governor of Colorado in the past few years. I mean, seriously. Anyone who identifies President Obama as "a greater threat to the United States than Al-Qaeda" is either a truly extreme politician, or a conspiracy nutcase who is holding on by a very thin thread.

And, so we're left to continually ponder where this stuff comes from. A decade ago, I was completely comfortable dividing my vote between the Democrats and the GOP, always choosing the most moderate and pragmatic leader. Alas, it has become increasingly difficult to walk that line. From seemingly aloof and misguided positions on tax rates and foreign policy to education and immigration reform to clear naivete about foreign policy and the true costs of government to intentionally ambiguous takes on labor, the "free market," and health care, I just can't find common or moderate ground with the GOP.

I have hope .... but it's wearing thin.

Monday, April 25, 2011

Atlas Shrugged ... So do I

The rise of interest in Ayn Rand's monstrous and fantastical ode to the wealthy elite - Atlas Shrugged - has baffled me for a while. It seems that many don't actually read it - but rather check the Wikipedia entry - and if they do read it, they don't read it with any sense of reality. For the one thing everyone - including Rand - seems to miss is that no true capitalist would ever pursue the principled stand of John Galt. In fact, if Galt is as principled as he seems, he never would have become successful in the first place. The reality is that innovators and business leaders like Galt are driven by, for lack of a better word, greed. And they aren't going to walk away from making more just to prove a point to the government and all those needy, lazy workers who are sucking them dry.

It's just such a preposterous thesis - and a truly disconnected viewpoint from someone who claimed to preach the gospel of unfettered capitalism. The creative and economic elite wouldn't shut everything down - they'd do what they've always done - buy politicians. No one is going to stand on principle and stop making money, though they may grandstand about it. But if I know anything about business leaders it is this - they would pretend to join the crowd, all the time planning to back out and take over in the vacuum that would result from all the business leaders walking away. And, of course, many of the innovators are people like Steve Jobs and Mark Zuckerberg, who are calmly creating away in their garages and dorm rooms, and not worrying that someday the government will take away all their riches, so they just won't create in the first place. That'll show 'em!

What a bunch of hogwash.

Saturday, April 23, 2011

Military Mis-Appropriations

I wonder how serious the debt and deficit would be if, twenty-three years ago at the end of the Cold War, American voters and legislators had taken an honest and realistic look at defense spending. My guess? Trillions of dollars would have been saved, and our country would feel safer and more secure than it does now. A recent feature investigation in Time Magazine asks - and answers - the same questions.

For at least a decade, I have argued with debt and deficit critics about the need to cut military spending. From unnecessary and unproved or outdate weapons systems to convoluted and secretive appropriations programs linked to local jobs with military contractors to hundreds of thousands of soldiers stationed around the world in stable societies, the military is a behemoth of spending that results from lack of oversight. As Time points out with the famous quote from Truman about the "military industrial complex," the nation needs "an alert and knowledgeable citizenry" to carefully analyze and budget for our military needs and peaceful goals.

Wednesday, April 20, 2011

Thoughts on Taxes and Deficits

Some thoughts from a discussion over at Darren's blog -

Of course, higher taxes won't end our debt in a year or two, and no one is proposing it could. And no one is proposing 100% confiscation, which is absurd. Of course, marginal rates of 89% existed during the country's exceptional economic boom from 1945-1965. Not that I'm arguing higher rates solve the problem - just that they don't necessarily cause more problems. The economy is about far more than marginal tax rates.

However, had rates not dropped to historic lows over the past decade, the debt would be far, far less. Extrapolate the lost revenue over twenty years and the case is obvious for allowing rates to rise for the wealthiest. If, for the past thirty years, capital gains and dividends had just been taxed as income, as uber-rich people like Buffett and Gates have proposed, and FICA was not capped, this current debt crisis would hardly exist. So, raising taxes on the rich - over the next decade or so - will do wonders in paying down the debt. And the garbage about "killing jobs" by "punishing the job creators" is exactly that, garbage. Supply and demand doesn't work that way - and no effective business owner turns down a good investment or refuses to expand his business simply because he might pay 19%, rather than 15%. A good deal is a good deal and business investments are made on timeliness first.

Budget criticisms about foreign and PBS/NEA/NPR are political not fiscal, and they don't have much relevance to the debt/deficit concern. As are comments on Ponzi schemes and socialism. Social insurance is a good investment for any society - just look at the economies of Singapore and Germany - and the debt problems are essentially solved through means testing and allowing the government to negotiate with providers. Just look at prescription costs for veterans if you disagree. And we've actually been "printing money" since the 1970s and the boat is afloat.

Taxes are the revenue the state uses to fund state business. The greatest percentage of revenue will come from its greatest concentration of it. The wealthy can simply afford to pay more for the functioning of the state, and they have clearly gleaned as much from a society that has been stable enough - because of said government/society - to create such wealth.
No wealthy business owner amasses wealth in a vacuum - it accrues from all contributers along the supply/demand line. And the infrastructure that allows that to occur and flourish is maintained by a government of representative democracy.

Limit/end corporate welfare (agree with you there), means test the safety net and allow for negotiations and cuts without hysterical "killing grandma" cries, cut back the military/security behemoth, don't cut taxes to "spur growth," plan to pay for wars while fighting them, and have a nice day.

Saturday, April 16, 2011

Taxes and Growth

In response to the budget plan by Paul Ryan and the GOP which cuts taxes by $4 trillion, both Charles Blow in the New York Times and Walter Mondale in the Washington Post attempt to clarify the issue of taxes and growth. The question is whether Americans can do the math, or whether they are still deluded by either sound bite ideology or simple ignorance of economic facts, rather than theories.

The TEA Party likes to claim that Americans are "taxed enough already." Yet, as Mondale points out, taxes are at their lowest rates in forty years - and, consequently, is government revenue which leads to deficits and debt at both the state and federal level. Sadly, too many voters don't see the connection, and they are reluctant to pay for what they want ... and that's precisely because politicians and leaders have convinced them they are already paying for what they don't want.

Thursday, April 14, 2011

Obama versus Ryan

Let's be clear - I am not enamored of Obama's deficit reduction plan and budget for 2012. While the message and philosophy of his speech was honest and fundamental to promoting "the general welfare" of the United States, the plan falls short in several areas of necessary spending cuts and tax revisions. However, while Obama's plan disappoints me, Ryan's plan is, in my opinion, far worse. The Path to Prosperity is a specific budget cutting proposal, no doubt. However, the assumptions it makes about future growth and prosperity are ideological and naive at best, but more likely reckless.

The audacity of crying bankruptcy and slashing social spending is simply wrong when it is being balanced by $4 trillion in tax cuts. If the problem is being broke and not having enough money, the answer is most definitely not to cut revenue further. Of course, the Ryan plan is taking that course on the misguided notion that the US can't tax the "job creators" as Colorado representative Mike Coffman calls them. Keeping the 01/03 tax cuts has no definitive impact on job and economic growth. It simply doesn't. That ideology has been discredited time and again. Increased demand grows jobs, and investors create new businesses whenever they want. There is no shortage of investment capital right now, and no shortage of business who could hire people. And it's not taxes that are preventing that from happening.

Obama's plan on the other hand is not clear enough on the tax increases that need to happen. But the deductions problem is pretty clear. Deductions are meant to ease the tax burden of people whose living allowance margin is thin. And the more deductions they have, they greater chance they will buy a house or purchase consumer goods. That's simply not the case with people earning more than a million dollars. They need no incentive to spend their extra cash. They spend whenever they want. Arguing that fewer deductions means these people have less money to hire people and start business is simply wrong and ideologically bullheaded.

Thus, I predict that Obama can win the next election with this plan - and I think the Democrats can even take back some lost seats. But that doesn't mean I think it's a great plan. It's simply not the disaster that Mr. Ryan presents. As I've noted before, you can't trust economic policy from a man who rants about the high corporate tax rates and seems willingly naive to the idea of corporate tax deductions.

Tuesday, April 12, 2011

Taylor Swift Gone Wild

Just out of curiosity - because my kids are such fans - I checked out the price and availability of concert tickets for Taylor Swift's show on September 27 at the Pepsi Center in Denver. I was initially surprised to see tickets were still available. And then I was shocked to see the cheapest - and worst - seat available .... at the back of the venue ... in the nosebleed seats .... on the venue's website .... not from scalpers ... were ... $125 each. Gasp!

That is, in my opinion, completely beyond the pale.

Taylor Swift is a phenomenally talented musician and a seemingly very genuine young woman. I am impressed with her songs and her public demeanor, and I don't question my children listening to her music. "But, Girl, you concert prices are out of control." Taylor is forgetting where she came from. And she is forgetting who her fans are. And she is neglecting to take an active interest in the business side of her career to ensure that regular folks have a reasonable shot at sharing in her live performance of the songs they made popular enough for her to charge whatever she wants.

Professional sports is no different. A lifelong St. Louis Cardinals fan, I was supremely disappointed in the stalemate between Albert Pujols and the team over his next - and final contract. Reports claim he expects to be the highest paid player in the league and that equates to a 10-year, $300 million contract. That is a bit ridiculous - especially because he will be in his forties at the end of the contract. This is as a member of the same team as Stan "The Man" Musial - a player who once signed his contract without looking at it, and when the press asked him if he wanted to review it first, he said, "I'm getting paid to play ball. I'm sure it's fine."

Let's hope the air someday goes out of the entertainment bubble, and prices return to a reasonable rate. But I'm not holding my breath.

Monday, April 11, 2011

Economics Plans

The White House says President Obama is set to release his budget and/or deficit reduction plan sometime this week. If that's the case, then both David Brooks and Fareed Zakaria are correct about the Ryan Plan forcing the discussion and throwing down a gauntlet on government budgets that must be addressed. Yet, I still far that Zakaria and Brooks are far too generous in identifying the bill as courageous and forward-thinking. It's still too naive in terms of growth and the role of tax rates, and it is simply unconscionable in terms of the faith it plays with the free market and insurance companies concerning health care for the elderly.

Yet, my gut instinct tells me that the President's plan is going to be equally naive concerning spending. And he is going to lose the battle on taxes if he keeps targeting as low as earners making more than $250,000. While I do feel that amount is comfortably wealthy, it is not an vast sum of money, especially in places like New York and California. He could certainly argue for higher rates on people in the million dollar tax brackets and address the revenue problem more rationally. Better yet, it should, as both the Wyden-Gregg and Ryan Plan argue, focus predominantly on the deductions. Certainly, we can come to consensus that the mortgage deduction is a reasonable tax break for many Americans, but it is unnecessary for people making more than 500 Gs, or for purchasing more than one residence.

So, if we could focus on that. We'd be getting somewhere. Broaden the base, flatten the rates, narrow the deductions for all, end them for the top 20%, and be done with it.

Sunday, April 10, 2011

Pepper Spray & Eight-Year-Olds

By now, you've probably read about the unruly eight-year-old boy who was pepper sprayed and cuffed by school police officers in a Denver suburb. I know, I'm still trying to get my mind around it as well. Yet, arguably, this story is much more complex than you might initially think.

Everything in my adult/teacher/parent mind tells me that there is no reason to pepper spray an third grader. My son is eight, and short of him having a gun, I can't think of any situation where I couldn't restrain him, even taking away from him a "sharpened stick" like the boy in the story was wielding. Some middle school and high school kids might be reasonable targets for pepper spray or even a taser if they are "threatening school personnel" and "throwing TVs and desks" at a door behind which the teachers had barricaded themselves. But an eight-year-old?

Yet, the district superintendent has defended the action as not only "legal" but in the best interest of the safety of the boy. Police officers are trained to take down the most dangerous and aggressive of people, and there is every reason to think that in restraining and removing the child, he could have ended up with bruises or a broken finger or wrist or arm or a concussion. And we can predict the lawsuits coming from that. In fact, the boy's mother wondered why the police didn't just talk to him as they had done on the two other occasions when they had been called to deal with this child.

And therein lies the complexity.

Clearly, this child is a problem. And previous "talking" may have led to the escalation, as the boy has learned he can get what he wants. The mom - who does not come off well in interviews - has clearly failed in almost every aspect of parenting. And she has burdened her son with issues he will struggle with for years. She claims doctors have refused to medicate him because it's not a medical problem. I agree. It's a parenting problem. And while the boy "never acts that way at home," I'd conclude it's because he gets everything he wants. My guess is the boy comes home each day and sits on the couch for hours watching SpongeBob or playing video games while his mom brings him every bit of junk food his heart desires. I'd guarantee homework is not an expectation in that house.

Thus, the boy was subdued, cuffed, and transferred to an alternative school for behavior disabled schools. Well, that's certainly appropriate, albeit about ten referrals and two police visits too late.

Oh, that we could have some discipline for mom as well.

Saturday, April 9, 2011

The Ryan Plan and the Future

The Ryan Plan ..... hmmmmm.

The Ryan Plan is a starting point.
The Ryan Plan is the end of effective government.
The Ryan Plan is visionary and courageous.
The Ryan Plan is draconian and shortsighted.
"The Ryan Plan isn't perfect, but it's forcing Americans to confront reality ..."
"The Ryan Plan is simultaneously ridiculous and heartless."

I don't know what to think of the 2012 budget proposal from Wisconsin congressman Paul Ryan, but it makes me uneasy. And I don't like to feel uneasy about plans the government is making. At the same time, I've been feeling uneasy about the growing debt and deficit since about 2003 (unlike many who suddenly found God on government spending in 2009). In response to the budget, which Ryan is somewhat smugly calling a "Pathway to Prosperity," and which is a more concise version of the "Roadmap to the Future" he published two years ago, liberals and conservatives are weighing in. David Brooks and Paul Krugman of the New York Times have offered some contrasting commentary on the Ryan Plan, and Matt Miller of the Washington Post has criticized the plan with specific numbers breakdowns from the Congressional Budget Office.

The Ryan Plan intends to cut $4 trillion over the next decade from the budget and make sweeping changes to the way the government funds health insurance for the poor, disabled, and elderly through Medicaid and Medicare. Basically, the plan would retain Medicare for all people 55 and older, and would shift to a $15,000 voucher to buy health insurance in retirement after that. It would turn federal funding of Medicaid into "block grants" to states which they would fund according to their own plans and abilities. It would balance the budget by ... wait for it .... 2040. And it would accomplish all of this by making no cuts to military spending. It would accomplish this by not raising taxes. And it would accomplish this by lowering the unemployment rate to about 3%. That number, it should be pointed out, is a projection from the Heritage Institute - a rather ideological group who is basing the projection, not on numbers from the GAO or CBO, but on theories about supply side economics.

Overall, I concede Brooks' point that the Ryan Plan is a bold starting point. But I hope that's all it is. Because it truly is a ridiculous plan. No one on the recent debt commission has rationally argued that we can fix our long term deficit problems without raising some taxes. Ultimately, a revision of the tax code can lower some taxes, raise others, and close loopholes. And social insurance in the form of Medicare and Social Security could and should be fixed through simple means testing and more credible indexing. Beyond that, any proposal that doesn't seek to cut military spending or agricultural and corporate subsidies is either incredibly naive, myopically ideological, or just disingenuous.

We'll see.

Friday, April 8, 2011

Reverse-Read Poem - Lost Generation

Working on a "multi-genre" research project with my class today, and a student introduced to the idea of a "reverse-citation poem" - one that can be read forward to reveal one message and backwards to reveal the opposite message. Fascinating.

Here's the example he shared. It's called "The Lost Generation" by Jonathan Reed: