Category Archives: Economy

Cutting Defense Spending Does Not Have To Compromise Military Readiness.

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Although Teapublicans insist on cutting government spending despite our fragile economic recovery, they categorically refuse to consider cuts to our defense budget.  They claim such cuts will leave the US vulnerable to attack.  So, when they passed the Ryan budget plan in the House, they included significant budget increases for the Pentagon.

In doing so, they disregarded a Pentagon report requested by Senator Bernie Sanders that shows, over the past decade, the government has awarded contracts totaling $1.1 trillion to defense contractors and their parent companies found guilty of defrauding the government.  In other words, when a military contractor is found guilty of defrauding the government, we demand a settlement.  Then we give them an opportunity to do it again!

If Teapublicans are serious about cutting deficits, the military/industrial complex is the very first place they should look.  Not the last.  The military budget is so bloated the Pentagon can’t even determine what happened to the $60 billion or so that has gone missing in Iraq and Afghanistan!

The money that can be saved by cutting Medicare, Medicaid and Social Security pales by comparison to the money that could be saved just by increasing oversight of military spending.  Moreover, the money spent on safety nets tends to go right back into our economy, while much of the money wasted on military fraud tends to line the pockets of CEOs and foreign dictators.

Of course, Teapublicans don’t want to stop with cuts to safety nets.  They want to hack away money from education, too; money that is truly an investment in our future.  Money that will pay us back in innovation and future increased tax revenues, as opposed to excess military spending that will result in more fraud and waste.

Both parties say this election will determine the future of our nation for generations.  The question is what future do you want?  More military and more wars?  Or a better standard of living for our youth and our seniors?

It seems like an easy choice for me.

This Is A Reason To Vote For Romney?

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Teapublican presidential candidate, Mitt Romney, has said that anything more than 4 percent unemployment is a failure for the Obama administration.  (It should be noted that the US has rarely achieved such a low unemployment figure.)  Now Mitt says that by the end of the first term of a Romney presidency, unemployment should be somewhere around 6 percent!

Hmmm…so Romney is already predicting that his first term will be a failure?

Even more puzzling is the fact that the Congressional Budget Office (CBO) estimates that continuing the policies of President Obama will result in an unemployment rate of 6 percent by 2015 – a year before the end of President Obama’s second term!  So, if this election is all about jobs as Mitt Romney has said, tell us again Mitt:  Why is it we should vote for you?

Requiem For The American Dream.

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This isn’t so much a blog post as an obituary.  The American Dream was defined as the ability for Americans to rise above their parents’ experience.  The ability to, as the result of education and hard work, become a success.  It is measured by the distribution of wealth and upward mobility.

In both of those measurements, the US now trails most of the world’s advanced nations.  A report by the Organization for Economic Co-Operation and Development (OECD) found that social mobility between generations is dramatically lower in the US than Denmark, Australia, Norway, Finland, Canada, Sweden, Germany and Spain.

The American Dream didn’t pass into history as the result of natural causes.  It was starved to death by Teapublicans who signed Grover Norquist’s “no new taxes” pledge.  It was bludgeoned by the likes of George W. Bush, Richard “The Dick” Cheney and their cartel of oil companies and military defense contractors.  It was driven off a cliff by greedy Wall Street bankers and their enablers such as former Senator Phil Gramm.

Republicans may have led the attack on the Dream. But many Democrats participated. President Clinton signed the Republican bill that revoked the Glass-Steagall Act allowing Wall Street bankers to gamble with your money and our futures.  He also signed a Republican bill opening commodity markets to gambling.

Many Congressional Democrats cast their votes alongside Republicans to starve government through the Bush tax cuts.  And they added their names to legislation approving the invasion of Iraq.

As the result of these actions, corporations were allowed to rake in large profits while sending our jobs offshore.  They were allowed to stash profits in offshore accounts to avoid paying taxes.  Banks were allowed to privatize their profits and socialize their failures.  The wealthy got even wealthier while paying lower taxes.  Banks got homeowners to sign mortgages at inflated interest rates, then took their homes to support the banks’ gambling habit.

The only question left is what now?  Will we allow economic disparity to grow dividing our nation into the haves and have nots?  Or will we resurrect the Dream?  The coming elections will provide the answers.

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.