Category Archives: Economy

GOP Asks You To Sacrifice On Behalf Of The Wealthy.

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The new crop of Republican deficit hawks are seeking billions of dollars in cuts to education, health care, public broadcasting, environmental protection and pension funds.  “It’s necessary for everyone to sacrifice in order to reduce the deficit,” they say.

Funny that they’re not asking the wealthy or large corporations to do the same.

Indeed, $70 billion of the deficit consists of the Bush era tax cuts for the wealthy.  And large corporations?  In addition to their ever-lower taxes (Cutting taxes on corporations creates jobs, don’t you know?), they enjoy a raft of tax loopholes, tax incentives and outright subsidies.  For example, the world’s most profitable companies (Big Oil) are actually paid to search for oil.  And we provide grants to universities to create new and better pharamceuticals.  Then we allow the large pharamceutical companies to patent the new drugs and sell them to our population at obscene prices.

So when you hear Republicans talk about sacrifices, ask them what sacrifices they’re willing to make.  Are they going to opt out of their government paid health care?  Are they going to cut their salaries?  Are they going to raise taxes on the large corporations that contribute to their political campaigns?

You know the answer.

The Real Reagan Legacy.

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On the occasion of Ronald Reagan’s 100th birthday, Republicans and other conservatives simply could not contain their myopic admiration for “The Great Communicator.”  In reality, he should have been called “The Great Propagandist.”  Or, perhaps, “The Great Bullsh***er.”

For, I believe, the collapse of the middle class can be traced directly to the decisions made during his terms in office.  Take the assault on labor unions.  It was Reagan who decided that he could not be troubled with the PATCO strike.  So he fired most of the nation’s air traffic controllers and replaced them with new, more obedient controllers.

Or take “Reaganomics,” AKA “Voodoo Economics” and “Trickle-down Economics.”  Under Reagan, the administration began the biggest transfer of wealth in the nation’s history.  All upward.

He began by paving the way for interstate banking, which effectively did away with usuary laws that limited the interest rate banks could charge for loans.  And he ended tax deductions for the interest paid on loans.  (For those too young to remember, prior to Reagan, all of the interest paid on loans for education, cars, credit cards, etc. was tax deductible.)  The effect was to enact a huge tax increase on the poor and the middle class while, at the same time, cutting taxes for corporations and the wealthy.

Reagan’s economic disciples, such as George W. Bush, have not only further cut taxes for corporations and the wealthy, they have continued the assault on labor unions by providing tax incentives for corporations to ship jobs overseas.  They have dramatically cut the estate tax and capital gains taxes.  They have provided subsidies for some of the world’s most profitable corporations – oil and pharamceutical companies.  They have attacked Social Security, Medicaid, Medicare and even public education as “entitlements.”  And people like Wisconsin Governor Walker are trying to put an end to collective bargaining.

The result of the policies of all these Reaganophiles is that the 400 wealthiest people in the nation now control 50 percent of the nation’s wealth.  To be clear, that means 400 people now have as much money as the bottom 110,000,000 Americans combined!  Even Reagan’s own budget director now admits that “Reaganomics” was a disaster for the middle class.

So pardon me if I choose not to celebrate the Reagan legacy.  To me, that would be akin to celebrating the legacy of influenza.  Or measles.  Or polio!

Arizona Leads U.S.

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It’s true.  The state of Arizona is leading the nation.  Just not in a good way.

For example, we have one of the nation’s worst economies.  Our schools, home prices, and poverty rank among the nation’s worst.  Our gun shows lead the nation in exporting weapons to the Mexican drug cartels.  And, based on the actions of our state legislature, we must have more non-institutionalized lunatics than any other state in the union.  (Of course, if said legislators have their way, we may not be part of the union much longer.)

To elaborate, just consider the bills currently pending in a legislature that is overwhelmingly dominated by Republicans:

SB1433 would set up a committee of 12 lawmakers (of course, they would be mostly Republican) to review federal laws and regulations to determine which are “outside the scope of the powers delegated by the people to the federal government in the U.S. Constitution.”  If passed, the legislation would directly challenge federal supremacy as written in Article 1, Sections 8 & 10 of said Constitution.

SB1308 and HB2562 would limit federal authority setting up interstate compacts to honor each others’ birth certificates segregating children who are considered U.S. citizens from those who are not.

SB1309 and HB2561 would redefine Arizona citizenship in defiance of the 14th Amendment of the U.S. Constitution.

SB1328 would make it legal for Arizonans to defy any federal law or rule if federal employees or members of Congress do not have to comply.

SB1391 would create an interstate firearms freedoms act guaranteeing the right of citizens to bear arms free of federal regulation.

SB1393 declares that the state has the exclusive right to regulate carbon dioxide emissions within the state boundaries while SB1394 protects the right to emit carbon dioxide from human-caused activity.

SB 1545 would allow the production of nuclear fuel in Arizona free from federal regulation.  (It’s unknown if that also includes the production of nuclear weapons.)

SCR1016 would require the approval of the legislatures of half the states in order for Congress to increase the federal debt.

HB2077 requires any federal agency coming into an AZ county to first register with the county sheriff before conducting official business.

HB2471 would bar the appropriation of any state funds to comply with a federal mandate unless the federal government provides a report to show the mandate is constitutional.

HB2472 would allow the state to acquire federal property by eminent domain unless the federal government first receives permission of the state legislature.

HB2537 permits the AZ house speaker and senate president to defend last year’s SB1070 immigration law by lawsuit if necessary.

HB2544 requires U.S. presidential candidates to provide certain proof of citizenship before they can appear on the ballot in Arizona.

HCR2015 calls for a constitutional convention to adopt an amendment to require the consent of three-fourths of the states to increase federal debt.

HCR2022 proposes a constitutional convention to require a balanced federal budget.

On top of all this, the state attorney general has just announced that he is suing the federal government for not defending the border against illegal immigrants and drug smugglers.  (I guess more than 10 border agents per mile doesn’t qualify as a defense.)  Amazingly, it seems that Arizona Republicans are more interested in attacking the U.S. government than dealing with the very real problems in our own state!  Can’t you just picture Nero fiddling while Rome is burning?

Self-Inflicted Pain.

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Beginning with the Reagan administration, the U.S. has, in effect, taken out its very large supply of guns, taken careful aim and shot itself in the foot.  Of course, I’m speaking metaphorically, but the damage to our nation is very real.

The Reagan administration’s notion that you could dramatically increase defense spending, increase corporate welfare, demonize unions and cut taxes has had a devastating and lasting impact on our country.  It’s because of Reaganomics that our deficits and national debt began to spiral out of control.  Even Reagan’s own budget director has since labeled Reagan’s economic policies a failure.

Of course, the Repugnants, aka right-wing Republicans, are fond of blaming our deficits on Democrats.  But that’s revisionist history.  Under Reagan and Bush The Elder, the deficits reached new heights.  Clinton and, in fairness, a Republican-led Congress, turned those deficits into surpluses.  Then Bush The Junior turned the entire economy upside down by pursuing two unfunded wars, lowering taxes and deregulating Wall Street.  In order to save us from a world-wide economic collapse, President Obama had to increase spending by providing loans to banks and automakers.  He also, for the first time, included the cost of the wars in Afghanistan and Iraq in his budget.

Republicans have seized on those actions to unfairly blame Obama for the deficits.  Now they want to use the deficits to undo all of the nation’s safety nets for children, the poor, the ill and the elderly.  At the same time, they continue to call for further tax cuts for the wealthy.  (Never mind that our taxes are now the lowest in 60 years.)

There is, of course, an alternative to what Bush The Elder once referred to as “voodoo economics.”  As the economy continues to improve, we could raise taxes back to pre-George W. Bush levels and close the enormous tax loopholes that have been exploited by large corporations.  At the same time, we could reduce the out-of-control defense budget and use a portion of the savings to create jobs by rebuilding our factories and infrastructure.

But if that makes sense to you, don’t hold your breath.  As long as those large corporations and defense contractors are allowed to fund the campaigns of Congressional Representatives and Senators, it’s not likely to happen.

Arizona’s SB1070 7 Months Later.

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In April of this year, Jan Brewer signed Arizona’s controversial anti-immigrant bill into law.  It was hailed by conservatives far and wide as a great first step in closing our border to keep Mexicans from taking our jobs and using our services.  And at least 12 more states are considering similar legislation.

So how is 1070 actually working out?

In the 7 months since its signing, many of the most controversial parts of the law have not yet gone into effect, and the state has spent more than $10 million to defend the law in courts.  An estimated 100,000 undocumented workers have fled the state to find jobs elsewhere, taking with them the money they paid for rent, clothing, groceries, gasoline and more.  A very conservative estimate of the financial loss to the state would be somewhere in the vicinity of $4 million.  And their contributions as a workforce to the state could be estimated at more than 10 times that.  In addition, the law has led to boycotts from other states and cities which has already cost our tourism industry more than $141 million.  Add to that the jobs lost in the tourist industry and the cost rises to more than $250,000.  Based on the latest estimates, the new law has cost Arizona nearly $500 million!

“But certainly the state has seen some benefits from the law, too,” you say.

Not really.  It has served to create distrust between Arizona’s white population and Latino population.  The law has turned many other states and cities against us.  And the drug war still rages along the border, fueled by American guns and our insatiable appetite for illegal drugs.

The only ones who seem to have benefited from the law are Jan Brewer, John McCain, Russell Pearce, and other right-wing Arizona politicians who used scare tactics related to the law to get themselves re-elected.  Which is no doubt the over-riding reason for passing the law in the first place.

Okay, Republicans, now what?

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You lied, cheated and spent your way into control of the House of Representatives.  You took control of more governors’ offices.  And you took control of 19 more state legislatures.

Much of your success was the result of massive corporate donations and your filibustering of legislation that could have helped turn this economy around – the economy that collapsed on your watch due to your lack of oversight and regulation.  Remember?

You blamed your mess on President Obama, Nancy Pelosi and Harry Reid.  Then you talked about “taking your country back,” resorting to 2nd Amendment remedies, if necessary.

You won on promises of less government and lower taxes.  So what next?

Plan to cut the size of government?  Maybe you haven’t noticed, but the downsizing of state, county and local governments is one of the primary reasons our economy is so slow to recover.  We’re losing government jobs faster than private industry can add jobs.  Moreover, the lack of government oversight of Wall Street is one of the main reasons we’re in this predicament.

Plan to cut taxes by renewing the ill-conceived Bush tax cuts for the wealthy?  Then plan on adding $80 billion to our deficit over the next two years.  Want to repeal “Obamacare?”  Then plan on adding yet another $138 billion to our deficit over the next 10 years.  (Not to mention the fact that you’ll be denying health care access to more than 30 million Americans.)

Plan on cutting the deficit?  You could cut half of our bloated $663.7 billion defense budget (not including the Iraq and Afghan wars).  But what will you do about the defense contractor jobs you eliminate?

The most radical Republicans talk about eliminating or privatizing all “entitlements” such as Social Security, Medicare and Medicaid.  They want to get rid of the Department of Education, the Environmental Protection Agency, and the National Science Foundation, as well.  All of that combined would save $1.48 trillion a year, completely offsetting the deficit and leaving us with a surplus of more than $200 billion each year (not including tax cuts for the wealthy, rising health care costs, increased military spending and increased border security).

But we’d have a nation of uneducated, unheathy children and heavily-armed, destitute senior citizens.  Try running on that platform in future elections.  Or will you do as some Tea Party candidates suggest, and limit voting to landowners or those already in office?

How Much Is Your Vote Worth?

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$100? $1,000? $10,000? More? This year, corporate and foreign-funded shadow groups seem willing to spend whatever it takes to convince you to vote Republican.

Unfortunately, you won’t get to pocket the money.  But, thanks to the Supreme Court decision in the Citizerns United case, corporations (both domestic and foreign) are now able to pour hundreds of millions of dollars into advertising campaigns that attack Democrats. Even the Chamber of Commerce is getting into the act. The group has solicited large donations from businesses in China, Saudi Arabia, Dubai, Bahrain and other nations to spend on attack ads against Democratic candidates. Best of all, unlike the $20 donations you give to candidates, the corporations can give anonymously. The shadow groups don’t have to disclose the source of their millions.

Now you may be asking, “Why are corporations so willing to open their vaults for politics?”

The answer is obvious. They expect something in return. And, as always, Republicans stand ready to give it to them. Republican candidates promise to continue their fight against labor unions. They will continue to promote lower taxes for corporations and the wealthy. They are committed to eliminating pesky regulations that protect the environment and consumers. And they continue to attack so-called entitlements such as Social Security and Medicare.

This year, Republicans even offer a few new bonuses for their corporate masters. Many of the so-called Tea Party candidates on the Republican ticket have questioned the Constitutionality of the minimum wage and unemployment insurance. After all, who wants to waste money on a bunch of lazy deadbeats who can’t hold a job?)  Further, Newt Gingrich is even recommending that GOP candidates attack food stamps! 

If all this corporate money is able to buy enough votes, just imagine what that could mean for working people. American workers can look forward to lower wages, fewer benefits, unaffordable health care and no safety nets. Who wouldn’t want that?

Tax Cuts As An Economic Stimulus.

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It’s one of the most important issues that will be debated in the coming months. Democrats, including President Obama, want to let the Bush tax cuts for the wealthiest two percent of our population expire. They claim that we can no longer afford these tax cuts and letting them expire would reduce the deficit and create more fairness for the middle class.

Republicans, on the other hand, claim that the majority of those making $250,000 or more per year are small business owners and that raising their taxes would cost us thousands of jobs. Indeed, they would not only make the Bush tax cuts permanent. They would cut taxes even further as a stimulus for creating jobs.

There are a couple of things I find troubling with the Republican logic. Most small business owners make far less than $250,000 per year. And those who make more than $250,000 likely won’t spend the extra money on their businesses. As a small business owner, I know that’s just not how things work. While some will put the extra money back into their business, most will invest the money in securities, save it or spend it on themselves.

But don’t just take my word for it. Let’s look at how most economists view tax cuts as a form of stimulus: They estimate that tax cuts have a return of 32 cents of economic growth for every dollar spent. On the other hand, programs like food stamps (which many Republicans oppose) have much higher rates of return. It’s estimated that such programs generate $1.71 of economic growth for every dollar spent. And, according to Mark Zandi, John McCain’s economic adviser during the 2008 presidential campaign, those unemployment benefits that Republican teabaggers so oppose are estimated to generate $1.61 in economic growth for each dollar spent.

As the nonpartisan Tax Policy Center put it: ” The tax cuts of 2001 and 2003 provided much less stimulus to the economy than other policies of equal cost would have. The underlying reason is that although the tax cuts were well-timed to provide a short-run economic stimulus, they were poorly designed for this task.”

They did, however, provide a nice windfall for the wealthiest Americans while adding billions to our deficit.

The Perpetual War Machine.

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As President Eisenhower was leaving office, he warned, “We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist … Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.”

Consider the warning unheeded.

For 2010, the U.S. defense budget is $692,000,000,000 – more than the total of all 194 other nation’s combined. And that doesn’t even include the money being spent in Iraq and Afghanistan! By comparison, in 2009, the 2nd largest defense budget belonged to China at $98,800,000. And the defense budget for Russian Federation stood at a paltry $61,000,000.

Yet, as our nation struggles with high unemployment and decaying infrastructure, Republicans continue to push for more military spending along with the use of more military contractors such as Halliburton, KBR and XE (aka Blackwater). All the while, they rail against the growing deficit.

What about that makes any friggin’ sense?

Well, apparently it makes sense to former President George W. Bush. According to former Argentine Prime Minister Nestor Kirchner, Bush told him that “all the economic growth that the U.S. had had, had been based on the different wars it had waged.”  Wow!

So, according to Bush, our chief economic stimulus is war?! No wonder he ignored the warnings of 9/11. No wonder he invaded Afghanistan and Iraq. It was part of his plan for economic growth!

If our economy is based on war, then why, during the two longest wars in U.S. history, aren’t we thriving? Why are so many Americans unemployed? It would appear that Bush’s war theory makes as much sense as Reagan’s trickle down theory.

I have a better suggestion for improving our economy. Let’s cut our $692 billion defense budget in half. We’ll still have a budget more than three times the size of any other nation – enough to ensure our place as the biggest, baddest bully on the planet. And we’ll have money to rebuild our crumbling infrastructure and invest in new industries that create jobs for people without killing others.

The Growing Underclass In America.

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There are currently 14.6 million Americans who are out of work, and that number likely doesn’t include millions more, such as the self-employed, who have seen their businesses diminish to virtually nothing. But before you blame the current Administration, take a look at the monthly unemployment claims beginning in January 2008. By the time President Obama was inaugurated, the new claims had grown to more than 750,000/month. Yet despite having to fight Republicans every step of the way, President Obama and Congress began to turn things around. In fact, in May of this year, we added 433,000 jobs.

The real question is, without enormous structural changes to our nation, what kind of jobs will be available?

Even before the Great Recession, most of our jobs were in the so-called service sector. And most of these jobs pay less than $25,000/year. The list includes fast food workers, restaurant workers, hosts and hostesses, dishwashers, cashiers, amusement park attendants, movie theater ushers and ticket-takers, farm workers, gaming dealers, bartenders, personal and home care aides, parking lot attendants, lifeguards, ski patrol, garment pressers, laundry & dry-cleaning workers, child care workers, maids, and elderly caregivers, receptionists, secretaries and maintenance “engineers”.

The result is that approximately 35 percent of the U.S. workers make $25,000/year or less! (The national poverty level is $21,756 for a family of four.) And many careers that were once considered good jobs, such as construction, don’t pay much better. Construction workers make only $11/hour to $15/hour.

Our nation has been bleeding relatively high-paying manufacturing jobs since the 1980s (7.7 million between 1986 and 2001). However, under the Obama Administration, the U.S. economy has actually begun to reverse that trend. New data shows that we have added more than 180,000 manufacturing jobs in 2010. Still, the majority of good jobs are in medicine, law and government. Indeed, of the top 15 highest paying jobs in America, 14 are in medicine.

Lowering taxes for corporations and the wealthy as Republicans demand won’t help create new higher-paying jobs. That will only ensure that the wealthy will make even more money and pay fewer taxes. It will also relegate even more of our citizens to the growing underclass.

A better option is to follow the path of FDR, Truman and Eisenhower – raise taxes on the wealthy and the “too big to fail” by allowing the Bush tax cuts to expire then use the additional revenue to rebuild our infrastructure and to create energy alternatives to foreign oil. That would create opportunities for construction companies, manufacturers and suppliers of materials. It would also incentify our corporations to invest their hoards of cash, and it would encourage our banks to open their vaults and make loans to small businesses. More important, it would put people back to work.