Category Archives: Economy

A Fair Solution For The Debt “Crisis.”

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For the past four years, we’ve heard a lot of whining about the federal deficits and debt, primarily from red states.  Although quiet during the prolific spending spree of the Bush administration, once President Obama took office, Teapublican anger swelled throughout the old South and in states like Arizona.

Ironically, many of those who scream the loudest receive Social Security and Medicare. And many others take advantage of other federally-funded social programs such as food stamps, unemployment insurance and the GI Bill.

That caused me to wonder how the contributions of the most vocal states stack up compared to the largess they receive from the federal government. Certainly, given their angst, you would expect that they pay far more in federal taxes than they get back.

You would be wrong.

In 2007 (the most recent data I could find), Arizona contributed $35,485 million in federal taxes and received $48,012 million back in federal spending. So the state received $1,976 more per person than it contributed. In other words, it’s a state of “takers.”

In fact, of the 28 states that receive more than they contribute, the vast majority are reliably red!

On the other hand, the vast majority of the “giver” states are reliably blue. The top five (Delaware, Minnesota, New Jersey, Connecticut and New York) are all blue states, contributing $4,500 to $12,285 per person more than they receive.

Of the 22 states that pay in more than they get back, only Arkansas, Georgia, Nebraska, and Texas are red states.

So here’s my solution for the federal deficit: Let’s give red state Teapublicans what they want. Let’s balance the federal spending in those states to the amount they pay in federal taxes. All states can share the cost of national defense, natural emergencies, etc. But when it comes to the cost of highways, roads, bridges, universities, health care and retirement programs, each state is on its own. That means red states will have to raise taxes or dramatically cut services.

Then we’ll see if they still think the federal government is the enemy.

The Worse-Than-Do-Nothing Congress.

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In 1948, President Harry Truman labeled the 80th Congress the “Do Nothing” Congress since it refused to pass most of the bills of the Franklin D. Roosevelt administration and the Truman administration. Instead, it focused on passing a few bills to benefit big business.

Believe it or not, the recently ended 112th Congress was worse!

Not only was the 112th unproductive. It was counter-productive. At several points in the last two years, its approval rating among voters was 10 percent. That’s right, 10 percent! That makes it even more unpopular than communism which has an approval rating of 11 percent in the US.

Among the 112th’s few accomplishments was lowering the credit rating of the US government for the first time in history. By blustering and balking at raising the debt ceiling and threatening to pay debts that Congress had already spent, it nearly collapsed the world economy. And instead of focusing on creating jobs and improving the US economy, it spent most of its time trying to discredit President Obama.

It passed no bills to build infrastructure, to increase exports, to bring jobs back home from overseas, to reform immigration, to regulate the type of military-style weapons used in the Newtown massacre, or to bring fairness to our tax codes.

Indeed, the 112th passed the fewest bills ever.

The 112th rabidly talked of lowering the deficit and reducing the national debt, but it succeeded only in kicking the can down the road for 11 months. In doing so, it created an artificial “fiscal cliff” that nearly dragged us back into recession. Teapublicans in the 112th bragged that they didn’t know the meaning of compromise. Dominated by a rabid Tea Party caucus led by likely escaped mental patient Michele Bachmann, the 112th even refused to follow its own leadership.

Incredulously, it even refused to vote for financial aid for the victims of Hurricane Sandy! An inaction that prompted several of its national leaders to say that if you donate to GOP campaigns, you must be “out of your mind.”

So goodbye, 112th! You will be forgotten, but not missed.

UPDATE: Following its failure to negotiate a long-term solution for the “fiscal cliff,” Congress’ approval rate is now in the single digits. Understandably, Congress is less popular than head lice and cockroaches! 

“Fiscal Cliff” Bill Includes More Largess For Wall Street.

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Avoiding the “fiscal cliff” should have been a simple matter of extending the Bush tax cuts for 98 percent of Americans. After all, this was the central issue in the presidential campaign. But the GOP (Guardians Of Privilege) have never passed up an opportunity to take from the poor and give to the rich.

So buried in the bill are a few very expensive gifts for the rich and the powerful.

For example, Section 322 is a $9 billion provision that allows banks and multinational corporations to defer taxes when they engage in “active financing.” Their lobbyists claim it’s necessary to help them compete overseas. But critics say that it’s a merely another windfall that encourages the banks and manufacturers to create more jobs overseas.

Yet another payoff to Wall Street is Section 328 which extends tax-exempt financing for the area around the former World Trade Center for another year. Originally intended to help fund reconstruction following 9/11, much of the financing has been used to build luxury apartments, instead. It even helped finance the construction of Goldman Sachs’ new headquarters (as if they actually needed the help).

Of course, news of the bill’s passage sent the Dow Jones Industrial Average soaring. As a result, hedge fund managers and the other Wall Street executives can rest assured that they’ll be in line for seven figure bonuses again this year.

So congratulations, fellow taxpayers. Thanks to lobbyists and the GOP, we just gave the wealthy and the powerful a late Christmas gift.

And all we got in return was the shaft!

From The Age Of Enlightened Minds To The Age Of Dimwits.

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The so-called Tea Party “Patriots” are fond of comparing themselves to the Founding Fathers in order to promote their self-serving, narrow-minded philosophy. Indeed, they named themselves after those courageous souls who dared to stand up to the British at places such as Boston Harbor, Lexington and Concord.

Yet today’s teabaggers couldn’t be more different from the likes of Thomas Jefferson and Benjamin Franklin.

The Founding Fathers were committed to education, to science and reason. By contrast, the Tea Party is committed to superstition, faith and brutish behavior. The Tea Party believes in slashing funding for education. Its followers dismiss science, and they consider those who are well-educated to be anti-American elitists.

According to Jon Meacham’s wonderful biography Thomas Jefferson, The Art of Power, Jefferson was an avid student of history and philosophy. He believed that “…reason, not revelation or unquestioned tradition or superstition, deserved pride of place in human affairs.”

Tea Party adherents, on the other hand, reject reason and cling to an inaccurate version of history in order to make our nation fit their narrow-minded ideology. An ideology based on the Articles of Confederation rather than the Constitution which replaced them, and on a plutocratic interpretation of Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations that seems to reject government intervention in the free market. Yet many scholars reject that interpretation, pointing to the fact that, time and again, Smith warned of the dangers of businesses forming cabals and monopolies in order to fix the highest price “which can be squeezed out of the buyers.”

In order to realize the best possible future for our nation, who are we to follow? George Washington or Eric Cantor? Benjamin Franklin or Sarah Palin? Thomas Jefferson or Michele Bachmann?

You decide.

Who’s Really Behind Gun Violence?

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Certainly the NRA and other gun rights groups deserve a lot of the blame. Over the past 30 years, they’ve evolved from organizations intended to preserve hunting and to promote gun safety into lobbyists for gun manufacturers.

But the real blame for increased violence belongs to those who have fostered paranoia. Paranoia about crime. Paranoia about minorities and immigrants. Paranoia about a potential financial crisis. Paranoia about non-Christians. Paranoia about a world catastrophe. Even paranoia about our own government.

The loudmouths on Fox News Channel and right wing radio have convinced the weak-minded that non-white, welfare-abusing “takers” are out to get them and the fruits of their labor. In their little minds, Democrats and liberals are destroying the United States. They believe that our nation is headed toward bankruptcy and socialism or worse.

The result has been a dramatic spike in sales of “tactical” weapons (aka military-style assault rifles and shotguns) and semi-automatic handguns since 2009. There has also been a six-fold increase in non-Islamic domestic terrorist groups since 2009. And we now have thousands (maybe tens of thousands) of “preppers” who are stashing food, water, weapons and ammunition in preparation for what they consider the inevitable failure of our nation.

Moreover, the vast majority of gun sales and paranoid activity has taken place in the Southern US, mostly since the election of our first black president.

Coincidence? I think not.

Will GOP Lemmings Follow The Tea Party Over The Cliff?

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In 2011, the Tea Party led our nation to a fiscal precipice by refusing to raise the debt ceiling unless Democrats agreed to cut so-called “entitlements.” The resulting impasse led to a lowering of our credit rating and widespread uncertainty, causing consumers to curtail spending and businesses to suspend hiring.

Following that debacle and ensuing unsuccessful attempts to reach a budget deal, Congress instituted sequestration cuts beginning in January of 2013 that were intended to be so onerous that neither side would want them to take effect. With negotiations still stalled, we now face massive cuts to the defense budget and social programs unless Republicans can convince their Tea Party members to accept revenue increases (most notably, higher taxes for the wealthy) and fewer budget cuts.

They’re unlikely to be successful.

These Tea Party “Patriots” are willing to collapse the world economy in order to maintain the “purity” of their ideology. An ideology that maintains the federal government’s only purpose should be to protect our shores. They believe that everything else the government does is a waste of money and an intrusion into their personal rights.

Education? That should be left to parents and private or parochial schools. Welfare? It’s everyone for themselves. No matter the circumstances, it’s your fault if you fall on hard times. You need to take personal responsibility. Regulations? Those are just another big government intrusion; corporations and people should be free to do as they please.

These Tea Party buffoons actually believe that our citizens will do better if they don’t have to pay taxes to build schools, roads, railways, and airports. They believe that national parks should be sold to the highest bidder; that pollution is a figment of liberal imaginations; that the Federal Reserve, welfare, unemployment benefits, government pensions, Social Security, Medicare and Medicaid should be abolished.

They see a future so austere, that millions of government workers will be laid off without benefits. Of course, they fail to understand that such cuts will force thousands of businesses into bankruptcy and tens of thousands of workers into charity soup lines. If they were interested in facts, the Tea Party wouldn’t have to search long to see the effects of such austerity plans.  The economies of Greece, Italy and England are all struggling as the result of much less significant budget cuts. The consequences have been recessions, riots and political upheaval. But none of that matters to Tea Party Patriots. The only things they seem to care about are their absurd ideology and, of course, themselves.

So we are left wondering if President Obama and Democrats can convince John Boehner, Mitch McConnell and other Republicans to ignore the austerity zealots.

Will Fox News Channel and the loudmouths on hate radio turn off the propaganda machines long enough to let sanity prevail? Or will they simply follow the Tea Party “Patriots” over the fiscal cliff like the small-minded lemmings they appear to be.

Can We Finally Flush The Trickle Down Theory?

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The notion that cutting taxes for the wealthy somehow creates jobs has never been proven to work.  Not once.  Never.  Ever.

In fact, there is much evidence to the contrary.

Many economists and non-partisan academic studies have pronounced it a fraud.  Not even the Reagan-era budget directors who resurrected the idea from the dust bin of history believe in it anymore.

Indeed, one need only compare job creation during the Clinton administration with that of the George W. Bush administration to see the fallacy of tax cuts as a job creating stimulus.  When Clinton raised the top marginal rate to more than 39 percent, the economy grew dramatically.  When Bush cut the top marginal rate to 35 percent, the economy began its slide over the cliff.

There’s more.

The idea failed in the early 1900s when it was known as Horse and Sparrow economics.  And contrary to the the notion that low taxes create jobs, the Eisenhower administration grew the economy when the top marginal rate was 91 percent!

Despite all of this evidence, Republicans continue to claim that tax cuts create jobs.  Why?  Because Republicans sold the soul of their party to the very wealthy and to large, multinational corporations.  They have to find some way to sell this lame idea to the poor and middle class voters.  So, like a sleazy carnival barker, they loudly proclaim that it is the miracle cure for every struggling economy.

What they fail to mention is that the real miracle will be if it ever works.

GOP Racing Toward Oblivion.

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According to Fox News Channel and conservative hate radio, President Obama only won a second term because the majority of Americans wanted free stuff and they believe Democrats will give it to them.

(In other words, they’re assigning blame to the 47 percent as described by Mitt Romney.)

In a remarkable show of cluelessness, Teapublican pundits ignore the fact that their party did everything in its power to deny minorities the right to vote; that they want to deny millions access to healthcare; that they want to balance the budget on the backs of the poor and the middle class; that they want to eliminate safety nets such as Medicare and Social Security; that they want to eliminate taxes for the rich; that they want to impose their religious values on everyone; and that they want to deny civil rights to minorities, women, gays and lesbians.

It’s a surefire winning strategy…for Democrats.

Let’s hope Teapublicans continue to pursue this strategy. Wouldn’t it be great if all future political contests were between Democrats and the Green Party?

Proof That Tax Breaks For The Rich Do Not Create Jobs.

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For years, economists have scoffed at the notion that tax breaks for the wealthy benefit the rest of society.  The policy failed in the early 1900s when it was known as Horse and Sparrow economics.  And it failed in the 1980s when it was called Trickle Down economics. Indeed, even the architects of Reagan’s economic policy now admit the policy is a failure.

The notion was further debunked in the 1990s when President Clinton raised taxes on the wealthy resulting in millions of new jobs.

But evidence has never stopped Teapublicans from claiming that the only way to create jobs is to cut taxes for the wealthy and multi-national corporations.  They continue to claim that tax cuts are the only incentives for the so-called “job creators.”  Of course, this year’s crop of Teapublican candidates is pursuing the same policy.  They’re counting on voters who are frustrated by the slow recovery from the enormous economic crisis they created to buy into the same old malarkey again.

Teapublicans deny that they are responsible for the crisis and that their obstructionism is responsible for the slow recovery.  They say, “Trust us.  Tax cuts will work this time.” 

Unfortunately for Teapublicans, the non-partisan Congressional Research Service created a report that, once again, found that lower marginal tax rates for the wealthy have no effect on economic growth and job creation.   So what did the Teapublican leadership do with this information?  Did it sway their opinions?  Did they modify their policy?

Certainly not.

According to a story in The New York Times, Senate Teapublicans led by Mitch McConnell persuaded the Congressional Research Service to withdraw the report.  After all, they wouldn’t want the voting public to know the truth!

The Cultural Pendulum.

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During my 40+ years in advertising, I learned that our culture is like a pendulum.  It swings far in one direction then back an equal distance in the other direction.  However, it’s on a 360 degree axis, so it never comes back to quite the same place twice.

You can see this pendulum effect play out in many ways, including politics.

In the late 1800s and early 1900s, wealthy men such as J.P. Morgan, Cornelius Vanderbilt, and John D. Rockefeller wielded most of the political power.  These industrialists made billions off the backs of others.  They controlled their employees with an iron fist.  They controlled government the same way.

It was an age when workers, including children, were forced to labor in deplorable conditions.  They were paid little for back-breaking work in mines, in sweatshops, in factories and on railroads.  There were no safety and environmental regulations.  No labor unions.  No salary negotiations. No retirement safety nets.

Following the labor strikes of the early 1900s and following the Great Depression, things began to change.  People realized that they had been abandoned by the powerful and the wealthy.  The need for collective action became apparent.

Sadly, the pendulum is swinging back in the direction of the plutocrats; the so-called “job creators.”  We’ve been through decades of union busting.  Middle class jobs have been exported to other countries in search of ever lower labor costs.  Financial, environmental and safety regulations are under attack.  The top one percent has enjoyed an ever-increasing share of the national wealth while the wages of the poor and the middle class have declined.

More disturbingly, there is evidence that the pendulum is accelerating toward the right.  The wealthy and powerful have been emboldened.  The mere fact that a candidate for the Republican presidential nomination felt comfortable promoting the exploitation of child labor during the Republican debates should send a chill down everyone’s spine.  Now business owners and corporate executives are even demanding that their employees vote for Mitt Romney or be fired.

If the Republicans take control of the White House and Congress, our nation will swing even further toward the Horse and Sparrow economy; an economy based on the notion that if you feed enough oats to the horse (the wealthy and the multi-national corporations), some will pass through and end up on the road for the sparrows (you and me).