Category Archives: Economy

What Is Our Real Legacy For Future Generations?

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Much has been written about the national debt that is being left to future generations; how that debt is the greatest threat to the future of our nation.

I beg to differ.

Not that the debt isn’t a serious issue, but our nation faces many more daunting problems. For example, our infrastructure is crumbling.  Roads and bridges are in disrepair. Our electric grid is woefully inefficient and unreliable – approximately half of all the electricity generated is lost in the grid. Our rail system is antiquated. Ports and canals need to be expanded and remodeled. And our computer systems are increasingly vulnerable to hackers.

In addition, the vast majority of the world’s scientists – real scientists – are sounding alarms about global climate change. Their computer models show that our dependence on burning fossil fuels will raise sea levels by as much as three feet by 2100, drowning some of the world’s largest cities, many of them in the US.

These scientists aren’t politically-motivated. They aren’t beholding to corporations. And they aren’t making unsubstantiated claims. They say that human-caused climate change is as proven as gravity.

Making the investments to address these issues now makes infinite sense. Not only are interest rates at all-time lows. Making changes would create an enormous number of high-paying jobs. And when more people make more money they purchase more and pay more taxes. All of which will help reduce the deficit and debt.

In fact, Nobel laureate economists tell us that such investments will do more to reduce our debt than austerity measures.

So what are we waiting for? Why do we listen to Wall Street-financed politicians instead of economists? Why do we listen to oil-soaked politicians instead of climate scientists? We have been shown a road map to the long-term health of the United States and the globe. These are not Democratic issues or Republican issues. They are human issues.

Isn’t it as important to leave future generations with a safe, efficient infrastructure as with a surplus? Isn’t it as important to bequeath them a sustainable planet as with a reduced debt?

Detroit Is Merely The Canary In The Coal Mine.

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It’s popular for conservatives to blame the bankruptcy of the City of Detroit on a history of Democratic leadership. Indeed, the conservative commentators seem to revel in the city’s troubles. And since Detroit has a high percentage of African-Americans, the problems also conveniently fit their racist narrative.

The wingnuts believe that this simply couldn’t happen to a government run by white conservatives.

Hmmm…What about California? Following a government led by Ronald Reagan and, more recently, Arnold Schwarzenegger, the state was teetering on the abyss. But after a return to Democratic leadership, California is regaining economic health and running surpluses. The same can be said for Minnesota.

Detroit’s problems aren’t merely the fault of city leadership. The state of Michigan has failed to deliver the aid it promised. But the real problems are the result of national and international politics. As part of globalization, greedy corporations shipped Detroit’s manufacturing jobs out of state and out of country in order to avoid paying for employee health care and pensions. In addition, many of the city’s mostly white executives fled to the suburbs leaving the poor and the unemployed to pick up the tab for their excesses.

Given the many factors contributing to the city’s financial problems, it would have been virtually impossible for Detroit to overcome them by itself. Detroit didn’t create the problems on its own. It shouldn’t have to face them alone.

Moreover, Detroit may be just the first large city to declare bankruptcy. Other cities that were once home to large manufacturing plants are facing many of the same difficulties. And, depending on what happens in Detroit, they may follow its lead.

Sadly, the situation in Detroit reminds me of the aftermath of natural disasters. When the Midwest was devastated in the nineties by floods, many on the East Coast objected to paying for disaster relief. Many across the nation objected to paying to help New York City after 9/11. Many objected to the cost of rebuilding New Orleans after Katrina. And congressional representatives and senators from other states voted against funding to New Jersey and New York to pay for relief from Hurricane Sandy.

Far too many Americans lack compassion for their fellow Americans. Instead of looking for ways to help, they are more intent on affixing blame. They assume that they are so smart that such a disaster could never happen to them. Invariably, they are wrong.

How Would You Pay For Uninsured Healthcare?

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Conservatives in Arizona and other states are mouth-frothing mad over the expansion of Medicaid for those who can’t afford health insurance. They claim that it’s a matter of personal responsibility; that the current system is fine; that people should simply go without healthcare if they can’t afford it.

Hmmm…

The people saying that consist mostly of the Bible-thumping, church-going crowd. You know, the good “Christians” who claim to follow the guy who once said something like, “What you do unto the least of these, you do unto me.”

What these people don’t understand, in addition to the Bible they claim to study, is that even people without money deserve healthcare. In fact, our federal government came to that realization years ago. That’s why hospitals are mandated to treat those in need, even if they can’t afford to pay for the treatment. As a result, most of the working poor (people below or near the poverty line are already eligible for Medicaid) delay medical care as long as possible. When their conditions have reached a point where they are more difficult to treat, they go to the Emergency Room where treatment costs many times more than care at a doctor’s office.

Who pays for their treatment? The very people who are whining and bitching about expanding Medicaid to cover more of the working poor. As a result, the whiners pay considerably more than they would if everyone had health insurance…even government-paid health insurance.

So the question is this: How would you like to pay for your brothers’ and sisters’ healthcare? Through the efficiently-run Medicaid system? Or through the many times more expensive E.R.?

Families In Deep Doo-Doo.

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It seems that nearly every week, a new study is released that shows the growing income disparity in the United States. Recently, an Associated Press survey found that 80 percent of adults in the US face near-poverty and unemployment at some point in their lives. Another study by the International Human Rights Clinic at New York University’s School of Law found that 1 in 6 (50 million) Americans face food insecurity, including 17 million children.

Now, the medical journal Pediatrics has published a study measuring the psychological impact on mothers who are unable to afford diapers.

The study, “Diaper Need And Its Impact on Child Health,”  by a group of Yale researchers, found that 30 percent of mothers have struggled to pay for diapers and more than 8 percent of low-income mothers reuse soiled diapers! Not surprisingly, the researchers concluded that the lack of clean diapers “seriously affects maternal stress, child health, and child development.”

So, in the richest nation on Earth, a large percentage of our people can’t tend to the needs of either end of a baby!

We have millions who can’t afford the most basic necessities despite working full-time jobs. We have tens of thousands of homeless – many of them families and veterans. And, instead of passing laws to raise the minimum wage; instead of eliminating tax loopholes that encourage companies to ship manufacturing jobs overseas; instead of passing bills to help create jobs here at home; House Teapublicans plan to cut $40 billion from our food stamp programs over the next 10 years.

It will be difficult since the House has only 9 scheduled work days between now and the end of September, but I’m certain they’ll find a way.

Growth Of The “Moocher” Class.

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During the 2012 presidential election, Mitt Romney was famously caught on camera talking about the 47 percent he claimed pay no taxes. That led to the conservative media referring to the 47 percent as the  “moocher” class; those people whose votes could be bought with promises of free “stuff,” such as food stamps, unemployment insurance and access to healthcare.

According to a new survey exclusive to The Associated Press, Romney had the numbers wrong. The survey shows that 80 percent of adults in the US face near-poverty and unemployment at some point in their lives. You read that correctly…80 percent!

In addition, the latest NBC News/Wall Street Journal poll found that 22 percent of Americans have been significantly affected by the sequester budget cuts. And those who earn less than $30,000 per year have been hardest hit. Moreover, 1 in 6 (50 million) Americans face food insecurity, including 17 million children.

The vast majority of these people work full-time jobs; some work two jobs or more and still can’t make ends meet. Yet conservatives call these people “moochers” and “takers.” Fox News Channel and conservative radio hosts vilify and ridicule the working poor. Instead of placing the blame where it belongs…on greedy corporations and an economy that no longer offers the majority of Americans an opportunity to realize the American Dream…Congressional Teapublicans blame the problem on labor unions, pensions, Social Security, Medicare and Medicaid. They have voted to cut food stamps and unemployment insurance benefits. They have voted 39 times to repeal Obamacare, denying access to healthcare for more than 50 million poor Americans. And, instead of voting to fund projects that would rebuild our infrastructure and create good-paying jobs, they vote to cut taxes for the wealthy.

In the two and a half years since regaining control of the House by promising to focus on jobs, Teapublicans continue to push for budget cuts and to place obstacles in the way of our economic recovery.

As a result of their indifference to the plight of ordinary Americans, our economy continues its slow recovery. We continue to see the loss of good-paying jobs to other countries. We continue to see the loss of pensions and income security for the elderly. And we continue to see a widening gap between the rich and the poor.

Teapublicans are right to talk about the “givers” and “takers” in our society. But they have things backwards. The “givers” are the working people who pay a disproportionate share of their income to taxes, including payroll deductions and sales taxes. And the “takers” are the very wealthy and large corporations who benefit from corporate welfare and record profits.

GOP: 1.6 Million Jobs Don’t Matter.

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There was a story this week that was overshadowed by Anthony Weiner’s penis, San Diego Mayor Filner’s hands-on management style and Congressman Steve King’s idiotic statements on immigrants. It was news that the CBO (Congressional Budget Office) reported that sequestration cuts forced by the Republican-dominated House will prevent the creation of 1.6 million jobs over the next year.

The report came as an answer to Speaker John Boehner’s oft-asked question, “Where are the jobs under the Obama administration?”

Yet the CBO report was met with a resounding yawn by Republican leadership. They are far more interested in preparing for the next debt ceiling crisis and moving to repeal “Obamacare” a few more dozen times. Indeed, Washington insiders claim that jobs are no longer seen as an issue by Republicans because the economy is growing despite their obstruction.

The economy may be growing, but not nearly fast enough. More important, salaries have not grown at all, except for those at the top.

Nevertheless, the Republican majority continues to ignore jobs in favor of cuts to Social Security, Medicare and Medicaid. Since taking control of the House with the promise of creating jobs, Republicans have not presented a single bill that would create jobs or rebuild our failing infrastructure. They have refused to negotiate a budget deal with Democrats. They won’t even create a committee to resolve differences with the Senate budget bill.

Indeed, this Congress is on track to pass the fewest bills in history!

Think about that for a moment. Our population has grown dramatically. Our nation’s problems are far more complex than ever before. Our infrastructure is crumbling. Our electric grid is cobbled together with antiquated technology. Climate change is claiming shoreline at an alarming rate. (Maryland’s Governor O’Malley recently stated that the state is losing 1.6 acres every day.) A large portion of our population doesn’t know where the next meal is coming from. And a growing number of our military veterans are struggling.

The problems are many. But Republican solutions are few and very far between.

Here We Go Again. Another Debt Crisis!

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In 2011, Speaker John Boehner and his GOP cronies nearly sent the US economy into a death spiral by refusing to raise the debt ceiling unless President Obama agreed to severe budget cuts. When the president and other Democrats tried to negotiate a common sense agreement that would not lead to a double dip recession, there was a lengthy stand off. The markets were so shaken that US government bonds were downgraded for the first time in history and large parts of our economy came to a standstill.

The GOP tantrum and resulting hit to our economy was completely unnecessary. President Obama was already in the process of cutting the deficit at a faster rate than any previous president in US history! Indeed, in June, we had a monthly budget surplus for the first time in years. And for the fiscal year ending Sept. 30, the deficit will be the lowest since the financial calamity of 2008 – nearly half the previous year’s deficit.

If President Obama is allowed to continue his policies, we will almost certainly see a full recovery of the US economy and the growth will lead to even less spending and more tax revenue as Middle Americans’ get better jobs and their salaries grow.

But that would expose the fraudulent economic policies of Boehner and his fellow Guardians Of Privilege. And they simply can’t allow that. So, once again, they’re threatening to take our economy hostage. Boehner says that he plans to adhere to the so-called Boehner Rule, demanding one dollar in spending cuts for every dollar increase in the debt ceiling.

This is nothing less than economic suicide for the United States!

The debt ceiling is an arbitrary limit that has no affect on the deficit. It merely limits the Secretary of Treasury’s ability to pay outstanding debts. Failing to raise the debt ceiling in order to pay our debts would turn the US into a nation of deadbeats. It would damage our reputation internationally, and it might well lead to an exodus of investments in US bonds, making it more difficult and costly to fund our national debt; a debt largely created by Republicans.

Even dragging out negotiations over the debt ceiling, as in 2011, will lead to serious consequences. It will make employers and investors nervous enough to hold onto their money. That will lead to a market sell-off and increased unemployment. That, in turn, will lead to increased federal spending and decreased revenues. And that will lead to increased deficits and increased debt…exactly the opposite of what Boehner and his fellow nitwits claim to want!

Similarly, the effect of President Obama agreeing to significant budget cuts on top of those already imposed by sequestration will also severely harm our economy. If you doubt that, just look at what has happened as the result of Europe’s austerity measures.

According to the GAO (Government Accounting Office), the 2011 debt ceiling crisis raised the borrowing costs for the government by $1.3 billion in 2011 and an estimated $18.9 billion over 10 years. And, in case you’ve already forgotten the pain it caused, the debt crisis also caused the Dow Jones Industrial Average to fall 2,000 points in just two months. It damaged our economic recovery. Worse, it cost many people their jobs and negatively affected millions of lives.

By all means, Mr. Boehner, let’s do that again!

Egypt’s Morsi = America’s GOP

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When asked to explain the removal of President Mohamed Morsi, Egyptian leaders said that Morsi had offered no plan; no vision to solve the nation’s problems. Instead, he focused on consolidating the power of the Muslim Brotherhood and instituting Sharia law.

In many ways, his actions paralleled those of the GOP in the US.

Like Egypt, we have millions of unemployed. We have tens of thousands of recent college graduates with no jobs; not even any prospects of jobs. We have millions who, despite working full-time jobs, live in poverty. Our infrastructure is crumbling around us.

So how are Congressional Republicans dealing with these problems?

Like the Muslim Brotherhood, they are focused on consolidating power. In Republican-controlled states, they are gerrymandering Congressional districts to ensure their re-election. They are pushing through laws to limit the voting rights of minorities. And they are instituting their own form of repressive, antiquated laws to control women’s bodies; to control who may marry; to pick economic winners and losers.

The GOP has offered no legislation to address our growing number of problems. No jobs bills. No plan to rebuild infrastructure. No plan to help workers earn a living wage. No plan to break up our growing number of monopolies. No plan to deal with climate change. No plan to control healthcare costs. No plan to take the corruption out of politics.

The GOP’s only vision is to obstruct the plans of President Obama. If anything, that makes them worse than Morsi’s Muslim Brotherhood.

Visit To The Border Exposes The Complexity Of Immigration.

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My wife and I recently traveled to the border town of Douglas, Arizona. Along the way, we passed dozens of Border Patrol pickup trucks and two checkpoints. Upon arriving in Douglas, we were greeted by an imposing wall stretching along the border and a town in visible decay.

You see, Douglas was once a shopping destination for Mexican families. Many drove for miles to purchase items that were difficult to find or too expensive in their own country. Many walked across the border to work. Families lived on both sides of the border. All of this is readily confirmed with a quick glance at many of the business signs, which are in Spanish. Not English. After all, this land was owned by Mexico long before it was transferred to the United States.

Unfortunately, much of that cross-border commerce seems to have come to an end. Many of the storefronts are empty and many buildings are boarded up. It is now much more difficult to cross the border and there are far too many incidents in which Mexican citizens have been detained or threatened. It appears that many Americans have also avoided the area.

These are just a few of the consequences of our failed immigration policy.

Other consequences include the blight of our modern day “Great Wall” or “Iron Curtain.” It’s nearly as expensive and no more successful. The wall has reduced the number of migrants crossing the border illegally. And it has blocked the traditional migratory patterns of wildlife, maybe speeding some desert animals on their way to extinction. But it hasn’t stopped the traffic of illegal drugs. It has simply funneled them into a concentrated area which has posed a danger to ranchers and other residents in the area on both sides of the border.

This is no way to deal with immigration.

If we’re to get a handle on the issue, we must pass legislation that creates work permits. We must create an effective national ID system. We must make it easy for businesses to verify workers before hiring them, and we must make it easy to prosecute businesses who hire undocumented workers. We must create a path to citizenship for those who are already here, especially the “dreamers” (those who were brought here at an early age by their parents). And we must stop our large agribusiness corporations from dumping subsidized corn into Mexico and Central America, making it impossible for small farmers to make a living and forcing them to seek employment elsewhere.

Perhaps, most important, we should decriminalize drugs and make them available with a prescription from pharmacies. That would take the profit out of the illegal drug trade and force the drug cartels to find a new occupation. It would depopulate many of our prisons, saving billions in taxes. It would also eliminate the need for “users” to deal with criminals and to commit crimes in order to purchase their drugs.

Well, I can dream, can’t I?

Organized Bank Crimes.

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After an ill-advised investment in grain futures in the late 80’s, I became more convinced than ever before that small investors are at the mercy of large investors. Not just in commodities, but in other markets as well. If your timing happens to coincide with that of the large corporations and the wealthy, you profit. If not, they take your money.

In other words, all markets are inherently rigged. Because large corporations and the wealthy gamble such large amounts of money, they control the price of commodities and securities.

We’ve seen this play out in a variety of ways since 1999. That was the year President Clinton caved to the big money lobby (reported to have spent $300 million over 25 years) and a Republican-controlled Congress by signing a bill that repealed the Glass-Steagall Act. According to the likes of former Fed Chairman Alan Greenspan, former Senator Phil Gramm and former Treasury Secretary Robert Rubin, repealing the law would “free” Wall Street from onerous regulation so the banks could “innovate” and grow.

A year later, Clinton signed another such onerous bill, The Commodity Futures Modernization Act of 2000. Ironically, that was also the year of the dot.com crash.

Our financial markets have taken us on a frightening roller coaster ride ever since.

In my opinion, these bills turned financial markets into international high stakes casinos with a variety of complex games that allow the house and the big players to constantly adjust the rules in order to skim more money from suckers like us.

We’ve seen the big players run up the price of commodities, such as gold and oil, at the expense of ordinary citizens. We’ve seen them pump up the real estate market with subprime mortgages designed to fail. When the inevitable happened, the institutions holding those mortgages were bailed out by taxpayers. They then stepped in and snapped up foreclosed homes at a fraction of their actual value. These events also resulted in the loss of trillions by pension plans and the holders of 401ks.

So, thanks to the gambling of financial institutions, millions of ordinary citizens lost their homes and their financial futures at the same time.

The Dodd-Frank Wall Street Reform and Consumer Protection Act was designed to protect us from such risky and unethical behavior by financial institutions. Signed into law in 2010, Teapublicans have not allowed the act to be fully implemented. Even worse, they are working on behalf of their Wall Street benefactors to dismantle the bill. Even some freshmen Democrats seem to have fallen under the spell of Wall Street and the promise of campaign contributions. They recently voted for a bill written almost entirely by the banksters’ lobbyists that would water down Dodd-Frank.

For their part, financial institutions seem totally unphased by any regulations. In the past year, we learned that financial institutions manipulated LIBOR (London Interbank Offered Rate) the benchmark interest rate that determines the international cost of borrowing. After stealing billions, a handful of the big banks involved in the scandal have paid fines that amount to a stern slap on the wrist. Of course, such penalties only encourage financial traders to continue their games.

Now we’re learning of yet another rigged game – the currency market (aka the Foreign Exchange market). According to a Bloomberg report, “traders at banks around the world have regularly worked together for ‘at least a decade’ to move a key benchmark currency rate in ways that profit them and hurt their clients.”

It seems the old adage that “it takes money to make money” has never been more appropriate.