Category Archives: Economy

A Message To Moderate Republicans:

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To those long-time Republicans who fondly remember the Party of Lincoln, the party that held the Union together against the forces of slavery, the party that supported the “live and let live” principles of Goldwater, the party that stood with Reagan against the Soviet Union:  I have some very bad news for you.

That Republican Party no longer exists.

It was hijacked by neo-cons who started a “pre-emptive” war and resorted to torture in defiance of the Geneva Conventions.  These “new conservatives” bought votes with their unfunded Medicare drug plan.  They abandoned fiscal responsiblity by running up huge deficits and massive debt.  And they drove our economy off a cliff.

But they aren’t the only hijackers of your once proud party.  Your party has also been taken over by a group of intolerant zealots who intend to force their own unforgiving brand of Christianity on everyone; people who want to create a nanny state that dictates behavior, particularly that of women, gays and the poor.

Then, in 2010, your party embraced the “Tea Party” and yet another extreme agenda.  These people hate – I mean HATE – our government and anyone who supports it.  They hate public education, “entitlements” and government regulation – even to preserve the environment.  They refuse to compromise.  If anyone even mentions the word, they’re labeled RINOs (Republican in name only) and pushed aside.  They hate immigrants and people of color – any color but white.  And, if they don’t get their way, they threaten to exercise their “Second Amendment rights.”

Despite your best intentions, you won’t be able to fix the Republican Party from within.  There are simply too many of them and too few of you.  There is no Ronald Reagan waiting in the wings to save your party.  Instead, you have “leaders” such as Newt Gingrich, Michele Bachmann, Rick Santorum and Paul Ryan – the rising star who follows the self-centered principles of Ayn Rand, instead of those of Lincoln, Goldwater and Reagan.

Sooner or later, you’ll realize that the only real options left for moderate Republicans are to become Independents with no hope of choosing candidates, to form a new party, or to join the Democratic Party which has become the party of fiscal responsibility.

As someone raised Republican turned Independent turned Democrat, I can assure you that you will be very welcome in our party.

What Politicians Aren’t Telling You About The Economy.

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As a result of the 2008 economic crash created by the lack of regulation of Wall Street gamblers, new home construction has slowed to a relative trickle.  According to the National Associaton of Home Buildiers (NAHB), the number of housing units started in the U.S. totaled only 609,000 in 2011.  That compares to 1,131,000 in 2006 as measured by the US Census Bureau and Department of Housing and Urban Development.

Using NAHB estimates that for each new home built three jobs are created, these numbers represent a loss of more than 1.5 million jobs.  They also represent a loss of $67,000 in federal taxes and $23,000 in state and local taxes for each home not built!

And that’s just part of the problem.  In addition to the jobs lost that are directly related to home construction, there are job losses for landscapers, pool builders, movers, the makers and sellers of furniture, window treatments, appliances and more.  Indeed, a writer for The Outer Banks Voice tracked the number of people involved in building his new home in 2010.  He counted a total of 219!

Now multiply that number of 219 times the 522,000 fewer homes built in 2011 than before the Great Recession and you see the scope of the problem.

But there is some good news.  NAHB estimates 1.7 to 1.8 million new homes are needed each year to accommodate population growth and replacement of older housing stock.  So we are creating tremendous pent-up demand.  Sooner or later, the housing market is going to explode.  But it’s going to take time.  Those who bought homes between 2005 and 2008 were burned by home ownership.  They were taken advantage of by unethical mortgage lenders.  They were foreclosed by uncaring banks.  And even if they didn’t lose their homes, they have found that their homes are worth far less than before.

How do you get these people to forget the recent past and jump into the market again?  Given the low prices of homes and low interest rates, there are plenty of incentives.  But, unfortunately, it’s going to take years.

Americans tend to have short memories, but not when it comes to their money.

How “Starve The Beast” Became “Starve The Poor.”

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For years, Teapublicans have marched to a tune called “Starve The Beast.”  The premise is that government has gotten too big and expensive so, in order to bring it under control, they must deprive it of the revenue needed to fund it.  As band-leader-in-chief, President George W. Bush cut taxes, primarily for the wealthy.

As a result of those tax cuts, two unfunded wars and a bill designed to buy the votes of seniors in time for the 2004 election, the Bush administration squandered the Clinton-era budget surpluses and led us into massive deficits and an ever-growing national debt.

Rather than being alarmed by these Bush decisions, Teapublicans reveled in them.  And, when the economy collapsed in 2008, Teapublicans recognized two opportunities:  One, by blocking every attempt to speed up the recovery, they hope to make President Obama a one-term president.  Two, by howling about the enormous deficit and debt they created, they hope to make it easier to cut government and the things Teapublicans seem to hate most: Medicare, Medicaid and Social Security.

They say Americans can no longer afford such programs.  They point to the long-term “instability” of Medicaid and Medicare while failing to admit that much of that instability is caused by the skyrocketing medical and pharmaceutical costs they refuse to address.  I believe their hatred for “Obamacare” is driven by the fact that it will help mitigate costs, thereby saving Medicaid and Medicare.

Likewise, Teapublicans seem to relish every new report on Social Security that shows the program running out of funds in the not-too-distant future.  They point to the large group of retiring Baby Boomers as the reason the program needs to be privatized (gotta get it out of the clutches of big government, you know).

What they fail to mention is how easily Social Security could be permanently fixed.  Either increasing individual contributions to the plan by little more than 1 percent or removing the cap on incomes above $106,000 would protect Social Security for future generations.  But that wouldn’t allow Teapublicans to meet their long-term goals of privatizing Medicaid, Medicare and Social Security.

As for the people whose health care would be left at the mercy of large, greedy insurance companies and the retirees who might be relegated to dumpster-diving the next time the stock markets crash, no worries.

Teapublicans are more than willing to starve the poor in order to Starve The Beast.

Sen. Phil Gramm. A Legacy Of Failures.

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Unquestionably, Gramm’s actions as a US Senator were failures for consumers and our economy. But given the massive profits of the “too big to fail” financial institutions, they were great successes for Wall Street and large corporations.

In 1999, then Republican Senator Phil Gramm co-sponsored the Gramm–Leach–Bliley Act, aka the Financial Services Modernization Act, aka the Citigroup Relief Act which was enacted by the 106th US Congress and, unfortunately signed into law by President Bill Clinton. It repealed part of the Glass-Steagall Act of 1933 which had successfully protected consumer finances by erecting firewalls between banks of deposit, security investment companies and insurance companies. The Gramm–Leach–Bliley Act removed those restrictions allowing financial institutions of all kinds to consolidate.

The bill was crafted to provide legal cover for Citigroup which, a year earlier had been formed by the merger of Citicorp and Travelers Group. For the first time since the Great Depression, the merged organization combined banking, securities and insurance services that included Citibank, Smith Barney, Primerica and Travelers.

For Wall Street, it was the best legislation money could buy.

But Sen. Gramm’s meddling on behalf of large financials didn’t stop there. In 2000, he sponsored the Commodity Futures Modernization Act which was also signed into law by President Clinton. It weakened yet another post-Depression law, the Commodity Exchange Act of 1936, freeing over-the-counter derivitives transactions between “sophisticated parties” from regulation under federal securities laws. It is the law that permitted credit default swaps.

Combined, the two Gramm-sponsored laws created an environment of massive profits for Wall Street and led to the 2007 subprime mortgage crisis which cost the world economy an estimated $7.7 trillion! And if that doesn’t give you cause for concern, consider this:  Despite being the poster boy for our current economic problems, Gramm was selected as the senior economic adviser for John McCain’s presidential campaign.

Had McCain been elected with Gramm advising him, imagine where our economy might be now!

The Politicization Of Everything.

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The publicity for the Trayvon Martin killing served to emphasize the depths of our culture.  When the Samford, Florida Police Department announced that the killer, George Zimmerman, would not be charged, Martin’s family was understandably outraged.  They asked MSNBC’s Rev. Al Sharpton to pick up the case and publicize it nationally.  Of course, that meant that Fox News Channel and right-wing radio had to take the side of George Zimmerman.

If a travesty such as the Martin case can be politicized, I guess we shouldn’t be surprised that every other part of our culture is viewed through the same divisive lenses.  We have politicized science, education, health care, contraception, religion, race, women’s rights, the environment, the military, our judiciary, veteran’s affairs, Social Security, Medicare, guns, energy, agriculture, sports and, of course, journalism.

That hasn’t always been the case.  Prior to the early 80s, evolution was considered settled science.  Few questioned our education system.  Religion did not intrude in the classroom, except in parochial schools.  Outside of our military, no one carried guns except police and criminals.  And the media were bound by high standards of objectivity.

What changed?

Following the debacle of Watergate, the moribund Republican Party made an unholy alliance with evangelical leaders. Later, the Fairness Doctrine was repealed unleashing conspiracy talk radio.  Evangelists flooded radio and cable television with conservative politics and the message that Christianity was under attack.  Greedy right-wing mouthpieces like Rush Limbaugh, Sean Hannity and Glenn Beck filled the airwaves with their theories of a New World Order.  Rupert Murdoch built a media empire on hate and Teapublican talking points.  And worst of all, the National Rifle Association and American Legislative Exchange Council began writing legislation and recruiting state legislators to serve their ideological agendas.

And our conservative-leaning populace sucked it all in.

So here we are…arguing about racism, judicial “activism,” contraception, the origin of “personhood,” immigration, Bible studies and prayer in the classroom, religious messages in government buildings, cutting taxes for the rich, guns on campus, etc., etc., etc.

And all the while we’re arguing, the real problems such as a crumbling infrastructure, economic inequality, the exodus of high-paying jobs, too-big-to-fail corporations, climate change, the extinction of wildlife, an increasingly inaccessible and unaffordable health care system, and massive national debt are only getting worse.

Teapublican Lie #27.

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“President Obama’s stimulus failed because it didn’t hold unemployment under the promised 8 percent.”

In fact, President Obama’s transition team based that projection on the GDP numbers from the 3rd Quarter of 2008, which showed an economic decline of 3 percent.  However, in the 4th Quarter of 2008, the US economy fell off a cliff resulting in a decline of 8.9 percent; far worse than anyone expected.  So the original recommended stimulus could not possibly have reached the goal of 8 percent unemployment.  And Teapublicans threatened to filibuster the stimulus if it was made any larger.

As he took office, President Obama faced the worst economic decline in US history…even worse than the Great Depression!  Not only had the GDP declined at the rate of 8.9 percent, the economy was shedding 800,000 private sector jobs each month.

Despite unprecedented opposition by Teapublicans, the Obama administration’s policies have dramatically turned those numbers around.  Since taking office, the GDP has turned from the 8.9 percent decline to a sustained growth rate of 2-3 percent.  And the economy has added an average of roughly 200,000 jobs each month.

That’s a sustained turnaround of 11-12 percent in GDP and a positive swing of approximately a million jobs per month!

Almost any fair-minded observer would label the turnaround as utterly miraculous.  Indeed, a British economist stated that to have done more, “President Obama would have to have been Winston Churchill on steroids.”

GAO Report Shows Why “Obamacare” Is Necessary.

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There were many reasons why health care reform was necessary when President Obama and the Democratic Congress were overwhelmingly elected to office in 2008.  Not only were health care costs climbing at a rate more than 3 times that of inflation.  Medicare and Medicaid were being overwhelmed by increased costs and unregulated fraud.  More than 30 million people were without access to affordable health care.  Insurance companies were denying coverage to those with pre-existing conditions.  Insurers were also placing lifetime limits on health care for customers.

In addition, corporations were exporting jobs to places like China, Vietnam and Indonesia in order to avoid paying employee benefits.

Faced with these overwhelming problems, along with an economy that had fallen off a cliff and massive unemployment, President Obama and the Democratic majority had little choice but to find ways to bring the health care industry under control.

Of course, Republicans did not want to help.  To enlist their support, Democrats chose to abandon their preference for single-payer universal care.  Instead, they embraced the Republican idea of insurance mandates through private companies.  After all, the idea had worked in Massachussetts under “Romneycare.”  Indeed, the program had proven to be popular.

Not surprisingly, in their anti-Obama fervor, Republicans immediately labeled the plan as “socialist.”  And despite lengthy negotiations in which they offered dozens of amendments and killed the public option, Congressional Republicans voted against their own concept.

Let’s fast forward to 2012:  Several provisions of the Patient Protection and Affordable Care Act (PPACA) have already been proven to work.  Children up to age 26 may now be covered under their parents’ insurance plans.  Insurance companies may no longer refuse coverage to those with pre-existing conditions.  A number of wellness programs have been implemented.  And Medicare fraud has been curtailed.

However, the majority of the provisions of the PPACA, including those which will have the greatest impact on costs, will not take effect until 2014.  But there’s a chance that we may not be allowed to see those benefits.

If the conservative-laden Supreme Court rules that “Obamacare” is unconstitutional, the ever-increasing number of people (now roughly 60 million) who will be unable to afford health care will grow.  And health care costs will continue to rise, dragging down our economy and jeopardizing Medicare.

And what of the federal deficits and debt that Teapublicans claim to be so worried about?

According to a report by the Government Accountabiity Office, the Patient Protection and Affordable Care Act (PPACA) would have “a major effect on the structural gap between revenues and spending driven by rising health care costs and demographics gap.” In other words, “Obamacare” would go a long way toward reducing our deficits and debt.

Without the PPACA, we can expect the cost of health care, along with our deficits and debt, to grow dramatically.

A Truly Momentous Court Decision.

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With the US Supreme Court poised to decide on the insurance mandate of “Obamacare,” there are a few things to keep in mind.

First, the idea of the mandate that Teapublicans now oppose was originated by…you guessed it…Teapublicans!

Second, the federal government already mandates that our citizens and businesses purchase insurance…even health insurance.  You are currently mandated to pay for Social Security insurance and Medicare, and employers are mandated to pay for unemployment insurance.

What’s different about the federal government mandating that we pay for health insurance?

If the Court rules that the insurance mandate is unconstitutional, will we then see lawsuits claiming that the other mandates are unconstitutional as well?  Will we no longer have Social Security, Medicare, and unemployment insurance?  Teapublicans have already tried to dismantle these safety nets.

And what will happen to our health care system?  Since Congress has previously passed legislation mandating hospitals to provide emergency medical treatment to anyone, regardless of their ability to pay, those costs will continue to be passed along to the insured through higher fees.  Given the fact that more than 60 million Americans will be left uninsured, health care costs will continue to rise at a rate more than 10 times that of inflation.

Moreover, the rising cost of health care will continue to push multi-national corporations to send jobs overseas.  The number of uninsured will continue to increase, unemployment will remain high, and quality health care will eventually become affordable only to the wealthy.

It’s no exaggeration to state that this decision is the most important in the Court’s history.  The political implications will be even greater than the conservative majority voting to give the 2000 election to George W. Bush and voting to permit corporations to buy our elections.

On Being Arizona.

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Arizona’s finger-wagging, scorpion-eating Governor and its Teapublican legislature continue to blame President Obama for federal policies they claim have nearly bankrupted the state.  They brag that the state has been able to weather the economic downturn only because of their firm, cost-cutting measures.

But based on their actions, it’s clearly untrue.  The Arizona legislature apparently has so much money that it feels comfortable throwing it away!

For example, by cutting corporate taxes 18 years in a row and approving millions in tax credits for private schools, the state has dramatically reduced revenue. At the same time, the legislature wants to force the state Board of Regents to spend more than $13 million on metal detectors and storage lockers to keep guns out of college classrooms should a misguided new gun bill be passed into law.

One legislator wants to spend more than $8 million on a special election to put a Teapublican version of redistricting maps before the voters because he doesn’t like the maps created by an Independent Redistricting Commission. The Teapublican legislature has already spent tens of thousands on legal fees in an unconstitutional attempt to remove the chair of the Independent Redistricting Commission. It has spent millions in legal fees to defend SB1070. It has spent tens of thousands for legal fees in an attempt to stop voter-approved medical marijuana. And it’s spending tens of thousands more to fight the Patient Protection and Affordable Care Act (aka Obamacare).

And that’s just scratching the surface.

Despite a voter-approved 1 percent increase in the state sales tax intended to improve education, the Teapublican legislature refused to allocate the funds to public schools.  The legislature is treating the funds as a “surplus,” so it can further cut taxes for corporations and the wealthy.  As a result, teacher salaries are now so low that many automatically qualify for food stamps and Medicaid.  Some schools can no longer afford to perform routine building maintenance, to purchase replacement school buses, or even to buy textbooks.

Under Teapublican leadership, Arizona’s state capitol has been sold to private investors, thousands of children are being denied access to health insurance jeopardizing thousands of health care jobs throughout the state, and state parks have been closed or sold to local communities.

Instead of trying to correct these problems and improve the state’s moribund economy, Teapublicans have proposed bills that would permit hunters to use silencers and high-capacity magazines.  They’ve passed a bill allowing Bible study in public schools while banning Latino history courses.

They’re considering a new “birther” bill, an assortment of anti-union bills, a variety of anti-immigrant bills, and the usual anti-abortion bills.  And, in what appears to be the centerpiece of Teapublican legislative quackery, they’re pushing a bill that would allow employers to deny contraception for female employees unless the women can prove that the prescription is needed for medical reasons.  (I can see it now – female employees being asked to climb on their desks for a vaginal examination by their bosses.)

Of course, if many of these bills are signed into law, they will immediately be challenged in court.  As a result, the only people who are thriving in Arizona are the attorneys.

The Teapublican Time Machine.

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For several years, Teapublicans, especially white pre-Baby Boomers, have fondly remembered the days of their childhood when life was simple. When they could gas up the ’57 Chevy for $3.00 and cruise Main St. all night. It was a white-dominated “Father Knows Best” society of tidy neighborhoods with white picket fences.

Now those same Teapublicans seem determined to take us back to that era.

They can’t seem to grasp that those post-war days are really gone. Those days simply can’t, and won’t, be duplicated. Moreover, Teapublicans can’t seem to grasp the cultural dynamics that created the era they so fondly remember. It was an era of union-based manufacturing jobs that paid well enough to allow Mom to stay home with the kids. It was an era of small retailers, instead of big box chains; of neighborhood diners, instead of fast food chains. It was an era when everyone understood the importance of government and of working together – an attitude necessary for the defeat of Hitler and Hirohito. And it was an era when most of the products we used were made in the USA.

What these nostalgia-loving Teapublicans too easily forget are the seamy underpinnings of that era. African-Americans were segregated and denied the vote. Women were left out of business and politics. Young women were disdained and abandoned if they were unlucky enough to get pregnant before marriage. They were not allowed to attend school. Many were sent away to religious schools to be “rehabilitated” and have their babies in seclusion before giving them up for adoption. Many were simply barred from leaving home so the neighbors wouldn’t find out that they had become “fallen” women. If they chose to keep their babies, they received no child care payments. And if they didn’t want to have their babies, their choices consisted of tumbling down stairs, coat hangars, lye or back-alley butchers.

Yet the Santorum and Gingrich led Teapublicans want to revisit those days. Indeed, the policies being pushed by these candidates may well turn the “way back clock” back past the 60s and 50s, past the horrors of World War II, past the Great Depression, and past the Roaring 20s…all the way back to the 1800s, the days of Robber Barons. A time prior to the formation of the middle class. A time when there were no safety nets for those who were down on their luck. A time when rich industrialists ran everything, and when everyone else slaved 7 days a week to scratch out an existence.

Lest you think I exaggerate, consider the following legislative initiatives and proposals: All of the Teapublican candidates are on record as saying they would cut taxes, especially for the rich and for large corporations. They would eliminate capital gains taxes for the wealthy. At the same time, they would raise taxes on the poor. They would repeal the Patient Protection and Affordable Care Act making it impossible for tens of millions Americans to afford health insurance. And they would cut or destroy Medicare and Social Security.

They would drastically cut government, eliminating the Departments of Education and Commerce at a time when our economy is just beginning to show signs of recovery. They would eliminate the Environmental Protection Agency allowing large corporations to pollute our water and air at will with no consequences. They would continue or increase oil subsidies under the GOP’s “drill, baby drill” mantra. At the same time, they would eliminate subsidies for sustainable sources of energy.

They would likely start yet another war by attacking Iran, unleashing a torrent of hatred from the entire Muslim world and destablizing the Middle East and most of Asia. They would deny women the right to control their own bodies, even making it more difficult to obtain contraception. And perhaps most alarming of all, they would weaken the Constitutional separation of church and state.

Interestingly, despite the Teapublican candidate’s promises to shrink the federal government and cut the national debt, their fiscal policy proposals would actually increase the national debt according to the non-partisan US Budget Watch, while President Obama’s proposals would begin to shrink the deficit!

Even if you’re not a progressive as I am, a trip backward in the Teapublican time machine has to be an alarming prospect for all but the most right wing religious zealots.