Wednesday, April 29, 2009

On the precipice of becoming irrelevant

Senator Arlen Specter has seen the handwriting on the wall. His decision to switch from the Republican Party to the Democrats is probably partly due to his personal interest in holding his seat in the wake of an ultra-conservative primary challenge. Still, his decision to switch parties handed President Obama an unexpected boost on the eve of his 100-day anniversary by giving Democrats the potential of soon having that coveted 60th Senate seat – a filibuster proof margin. But most of all, it signaled further Republican decline in the Northeast. This sends a clear warning that the GOP's complete opposition to Obama’s policies is causing long-term damage to their party and playing right into Democratic hands.

GOP prospects of limiting Obama's congressional control in 2010 grow dimmer by the day. Some initial polling already shows they may have trouble putting a dent in the solid Democratic working margin In the Senate, early analysis shows that the most endangered Senate seats next year are held mostly by Republicans. Not only are they not likely to regain a majority in 2010, recent studies of the changing American electorate underscore that Republicans face a long-term challenge because of Obama's support in the country's two fastest growing voter groups, Hispanics and the Millennial generation.

According to Meghan McCain, John McCain’s daughter, Republicans did not just lose young people during the recent election – they potentially lost them for a lifetime. The election of Obama in 2008 had the makings of a sea change, much like 1980 was for Republicans. Voters ages 18 to 30 shifted to the Democrats in massive numbers. An indication that there was something deeper going on than just Obama’s personal appeal, House Democrats won by 29 points, just five points less than Obama himself. Moreover, young voters registered overwhelmingly with the Democratic Party, and, as has been often pointed out, once voters choose a party, they stick with it more often than not.

The Democracy Corps polling group recently surveyed this group of voters to see how they were feeling today about the two parties and the competing arguments being made by Obama and Republicans:

First, the Democracy Corps survey found that young voters' support for Obama has improved markedly since the election – he is viewed favorably by a margin of 65-21, as compared with 58-31 in October. Even more impressive, his job approval ratings stand at 74-17 among these voters, at least 10 points ahead of most general surveys. Perhaps most importantly, unlike surveys of older voters, there is no drop-off between Obama's personal support and that for his policies. Young voters favor the stimulus package by a proportion of 68-20, with the same 68 percent saying they are confident it will improve their own economic situations.

Second, Democrats are building on their partisan edge among young voters. Young voters give Democrats a 32-point advantage on the economy (up eight points from 2007) and a 45-point advantage on "paying attention to issues that affect young people" (up six points from 2007). In fact, only 14% said they favor Republicans.

What is most heartening, by large numbers, the survey finds that young voters are paying close attention to what is happening in Washington, which is not surprising, given that the recession is taking a heavier toll on them than on the population as a whole. And unlike Obama, who is proposing solutions to the specific problems they are facing, they do not hear any concrete ideas from Republicans that are relevant to them. Republicans are playing the same recording they have for decades – more tax cuts for the wealthy and cut Medicaid (for the poor) and Medicare (for the aging). They seem unaware the young voters are worried about having money to attend college and, afterwards, finding good-paying jobs.

In a survey commissioned by the Peterson Foundation in February, 60% of voters 18 to 34 said that the growing budget deficit and national debt is a very big threat to our country and out future. These young voters are worried about the price they may ultimately pay for today's deficit spending, but according to the “Obama Generation” survey, they place a much higher priority on taking bold action now to jump-start the economy and invest in long-term growth.

The report on the Millennial Generation, often called the "Obama Generation," should at least cause the Republicans to rethink their negative strategy, if not absolutely scare them into dumping Jindal and Palin and finding someone on the same intellectual plane as Obama. Republicans are not only losing more ground on the issue of the day – they are, in the words of John McCain's own daughter, Meghan, "on the precipice of becoming irrelevant…."

Sunday, April 19, 2009

No respect for the teabaggers

One way to get a good sense of the current state of the GOP, and also to see how little has really changed, is to look at the “tea parties” that were held across the country on Wednesday. These parties — supposedly anti-taxation demonstrations set up to evoke the memory of the Boston Tea Party and the American Revolution — have been the subject of considerable mockery, and rightly so. (Paul Krugman)

The sad truth is that the average American does not grasp fundamental economic concepts. This is why we have so many people looking at mortgages and credit card bills they can't pay. I live in a state which just about always votes Republican. Most of the same people here who are complaining about Obama's budget/tax policies are the same ones who just got a new tax cut – one of which they are apparently unaware. Although it is a small tax cut, add it onto what was given under the last administration, and the middle class is paying less in taxes than it has for decades. If a person makes under $20,000 a year, they barely get taxed. Yet it is astounding how most of these people seem to think that if taxes are raised on the very wealthy, they will somehow be raised on everyone. These are the same people who danced for joy when they got their stimulus money from George W. Bush.

There is no real point in blaming this on politics alone. Most of it is due to the lack of good education and listening to right-wing entertainment news. If you want politics to be truly fair and just, make sure Americans are well informed and can discern fact from fiction. TV entertainment-style news will never be able to replace a good education – nor will checking your brain at the church door.

This brings us to the teabaggers:

Teabaggers do not seem to understand that it is not the ‘liberal media bias’ that caused the hostile reaction toward them. There are other reasons why people mock and insult teabaggers. First, it's because they are offensive - calling names and telling lies like children in middle school, and showing great ignorance about our country’s history.

Second, Republicans lost badly in the election – thrown out of power because their policies ruined this country – but the Republican base (and Fox News) cannot accept the results of the election. This hardcore base is incoherently blaming Obama for problems that Republican policies caused. When someone tells them the facts, they get angry and refuse to listen. I can almost see their collective fingers in their ears.

Third, the election only just happened; the new president only just started governing three months ago. Republicans haven't given his policies – which have a clear voters' mandate – a chance to succeed or fail. Most of us believe that these members of the hardcore base are just piling it on because Obama is a Democrat; and with a bigoted minority, it is because he is black. They question Obama's citizenship and call him a Kenyan while referring to themselves as “real Americans.” But think about this: in about twenty more years the American WASP (white Anglo Saxon protestant) will be in a clear minority. The United States will be a brown-skinned country. Instead of accepting this fact and learning to interact with brown-skinned people, this group of people scream their anger about ‘losing their country.’ All of America saw those horrible racist signs that were held up during the “tea parties.” We all heard many teabaggers call our President a fascist and a monkey – which proved their bigotry and ignorance (they clearly do not know what fascism is).

Fourth, Republicans have started to walk with the crazies: white supremacists, secessionists, and anti-government terrorists (as in Timothy McVeigh). These crazies were once on the far right and ignored by all.

For years now, more than two-thirds of Americans have disapproved of Republican policies, and especially disapproved of Bush. Yet there is always a stubborn, fanatical 27 percent who adored Bush to the bitter end. "Who are these fools?" people would ask each other when the polls came out. "What are they on (as in mind altering drugs)?" So naturally, when we see them garner attention as they gathered in their teabagging groups (which was the core of the Bush base flaunting its legendary ignorance), be aware that it is not entirely friendly attention lavished upon them because people blame the Neo-con core of the Republican Party for inflicting Bush on the world.

If this minority group ever watched anything other than Fox “news” or listened to anyone else beside Rush Limbaugh, they might realize that they are in what is considered by most citizens of this nation to be a group of hardcore, far-right loonies. I know some teabaggers understand this because of their ludicrous attempts to pose as a movement containing Democrats and Independents. It isn’t. Their unconvincing efforts to try and hide the fact that they are 100% the hardcore right-wing Republican base speak volumes.

These people follow the loudmouthed insanity on Fox News and CNN, eating up the lies fed to them as if it were candy – and it shows. But how many people are actually involved – are actually gullible enough to be led into such a stunt? If one adds up the number of total teabaggers last Wednesday, there might be around 250,000 of them. This really is not a large number. The United States is a very big country with a huge population of just over 306,000,000 (that’s millions). So, even though they are loud, the teabaggers are in a tiny minority. And they are out of touch with the majority of U.S. citizens with the most recent Gallup poll showing that 61% regard the income taxes they have to pay this year as fair.

Everything that critics mock about these parties has long been standard practice within the Republican Party. Thus, President Obama being called a "socialist" or “fascist” who seeks to destroy capitalism is nothing new. Democratic presidents through the years have been called the same. Why are they calling Obama a socialist? Because he wants to raise the tax rate on the highest-income Americans back to, um, let’s see, about 10 percentage points less than it was for most of the Reagan administration. These hardcore right-wingers do not understand that this particular tax increase does not affect them. Why? They get their information from Fox entertainment news and Rush Limbaugh who LIE to them in order to stir them up. It’s like stirring up a nest of hornets that are already mad because a black man is president.

So really, whether they know it or not, everything about the teabaggers is very offensive to most Americans. But I hope they keep it up, please, because they will be further relegated to the loony bin and continue to lose elections.

And that is why the majority of U.S. citizens have no respect for teabaggers.

Saturday, April 18, 2009

Cinderella

It is all over television these days – reality shows where rudeness, crudeness, cruelty and arrogance runs rampant. I do not watch them. Which is why the moment I saw a news story about Susan Boyle it immediately captured my attention. I found the video on YouTube and watched Susan sing. Tears streamed down my face as I listened to a pure, angelic voice come from a person who looks like an average, frumpy middle-aged woman from the countryside. That’s the point – frumpy does not mean there is no talent. Yet in today’s world it is expected that one must be beautiful to have talent or intelligence. Mama Cass could not make it on the music scene today.

On “Britain’s Got Talent,” this good lady, because of her looks, was prejudged as a loser the minute she walked onto the stage. It was disheartening to see 3,000 people in the audience roll their eyes as they welcomed the middle-aged lady with snickers and disbelief. Many of these same people don't have the talent or the courage to set foot on that stage.

But her inner beauty and talent shown forth from the moment she started singing "I Dreamed a Dream" from Les Misérables. At the end of her performance, she got a well deserved standing ovation from all. Judge Piers Morgan told her "When you said you wanted to be like Elaine Paige everyone laughed at you, but no one is laughing now. …It was stunning!" When you make Simon smile with pleasure, you have accomplished something. Some good does come from these reality shows after all.

It had not occurred to anyone that she might be a great singer. Why?

In our society only the beautiful are expected to succeed. Some studies say we humans are predisposed to equate beauty with goodness and that only the beautiful "deserve" fame. It sometimes seems as if you have to be attractive just to simply deserve common every day respect – if you are overweight (or what is considered overweight in our anorexic society), beyond your prime, or don't wear expensive clothes, people look past you as if you do not exist.

This brave soul stepped onto a national (now international) stage and was greeted as a public joke. This is the point where most of us would just walk away and go hide - yet she didn't. After a few moments of eye rolling by Simon Cowell, Amanda Holden, and Piers Morgan and an audience of 3,000 on the reality show "Britain's Got Talent," who were all prepared to ridicule Ms. Boyle once she sang; the angel courageously opened her mouth and started singing.

She knocked them off their feet.

As a 47-year-old Scottish spinster who spent her life caring for her elderly parents, Susan is unemployed, unmarried and, according to her, "never been kissed." She isn't glamorous on the outside, but she is a lovely woman who took care of her family in their time of need, just as millions of unglamorous people do each and every day. Although many may have spent money on fancy clothes at some point in their younger years, life hit them with full force – suddenly sweats or blue jeans seem to be the outfit of choice. Going to the gym to keep that youthful figure becomes less and less important until it becomes just a nuisance. When you wake up one morning to discover you gained 50 lbs, you may care somewhere deep down inside, but the pounds won’t budge so you get on with life.

This is the reason why this story has struck a chord with so many millions of people around the world.

It is wonderful when something good happens to a person like Susan – especially when they deserve it. It is wonderful to watch a middle aged, rounded woman with little or no makeup in an old-fashioned dress go on stage and beat the ridicule and prejudgments with one of the most beautiful voices you will ever hear.

"Susan Boyle is the ugly duckling who didn't need to turn into a swan; she has fulfilled the dreams of millions who, downtrodden by the cruelty of a culture that judges them on their appearance, have settled for life without looking in the mirror," wrote Miranda Sawyer, of the Daily Mirror, "No woman gets to perform publicly unless she looks like Mariah Carey. If you're a female singer, you are required by showbiz law to appear sexy at all times. Poor Madonna and Kylie are desperately keeping up appearances, holding back the years with Botox and face-fillers just so they're allowed to continue with their careers."

I cried when I first heard her sing because she reminds us to hope, to never lose track of our dreams, to keep putting one foot in front of the other no matter what others say or think.

This is a true Cinderella story. A star has been born. Susan has said that she has no intentions of changing the way she looks. Whether she will leave a dent on our prejudices about age and appearance remains to be seen. Susan’s dream is about to come true as all of us plain everyday folk cheer her on.

Please watch her amazing performance:
http://www.youtube.com/watch?v=9lp0IWv8QZY&feature=related

Wednesday, April 15, 2009

Economics 101

President Obama gave one excellent speech yesterday explaining the economy and why he is doing what he is doing – and a statement today about overhauling the tax system to make it fairer. For those who never took economics and just don’t get it (like the so-called ‘tea baggers’), here is a short lesson on the difference between the two opposing theories of economics and why one really works better than the other:

First and foremost, economic ‘equilibrium’ is always the goal.

Under the very pragmatic Keynesian theory of economics, government spending is done with an eye to restoring and maintaining equilibrium. Once equilibrium is achieved, government should recapture enough money, through some taxes on the increased economic activity, to pay back the treasury and have a cushion/surplus for the next downturn.

In his 1981 book, Reaganomics: Supply-Side Economics in Action, Bruce Bartlett opens with a discussion of Say's Law: “The essence of Say's Law, named for the French economist Jean Baptiste Say, is that goods are ultimately paid for with other goods. Thus, production limits the satisfaction of human wants, not the ability to consume. Jean Baptiste Say, in 1803, argued that the encouragement of mere consumption is no benefit to commerce; for the difficulty lies in supplying the means, not in stimulating the desire of consumption; and we see that production alone furnishes those means. Thus, it is the aim of good governments to stimulate production, and the aim of bad governments to encourage consumption.”

Say's Law was the cornerstone of economic theory, until mortally wounded by John Maynard Keynes in his 1936 book, The General Theory of Employment, Interest and Money. One of the most important ideas of 20th century economics was Keynes demonstration that Say's Law does not hold true for large economies. Jean Baptiste Say argued that economies will right themselves and find equilibrium without help. Keynes showed that all too often an economy rights itself only by sinking to the bottom.

Yet, Republicans, through Reaganomics, hold onto Say’s theory as if it were God’s Truth.

The idea that an economy can only stabilize after a severe crash to the bottom was Keynes’ reason for publishing his book about government spending during a downturn. Keynes observed that "one man's expenditure is another man's income." This means if everyone stops buying, there will be fewer jobs, less income, which means less buying, which means even more incentive for businesses to wait for cheaper labor and production. In a deep recession, or a depression, prices never seem to fall enough to get the economic engine going again. That is why the huge amount of government spending for WWII is what pulled us out of the Great Depression. It takes large amounts of government spending to pull us out of a deep downturn. This is why Roosevelt’s work programs were only partly effective; the spending was not of sufficient magnitude.

When disequilibrium takes hold, it is necessary for the government to stimulate the economy and bail out the economic engines (banks, mortgage companies, etc). This must include providing relief to people who made bad decisions. Since it is impossible to go through and decide on a case by case basis whether a person made a risky, but reasonable, decision, it is better to set rules that the majority finds reasonable, and then have relief even for those who might have been outside those boundaries. Government must provide restructuring, basically forgiving sins and wiping the slate clean. This usually means helping everyone so that while people might lose all or most of what they have, they are not so wiped out economically as to be out of the game entirely. Those who are out of the game are the source of an economy spiraling downward.

The policies of the Republicans have been pro-cyclical. Republicans run deficits when times are good, throw fuel on the inflation fire, and create bubbles that people can chase. Pro-cyclical policies, liberals have been pointing out, are unsustainable, because when crisis comes, counter-cyclical action will be needed. This is why hearing now from people who are concerned about running up the deficit is insane. Where were they when it was time to reduce deficits and build up a surplus during the last administration? Many were calling for further tax cuts to return money to the taxpayers (meaning the rich).

We are not in a typical down cycle – we are presently in a “reset” mode.

As progressives call for broader action to remove the sources of disequilibrium from society, the wealthy just want someone else, not themselves, to pay for the cost of having the instability removed, and then they want to have things go back to the way they were before. But it isn't enough just to get back to where things were before because the way things were before was what created the mess in the first place. But giving tax cuts to the wealthy does not work because the wealthy will mostly buy unproductive labor. That is, they will buy things like expensive art, gold, land, high priced items, or buy out competitors and put them out of production. They may employ a few more servants and other forms of labor which does not help to increase the wealth of society. Thus, according to Keynesian economics, that is why tax cuts do not work. When an economy needs a stimulus, government is a better "buyer of last resort" than the wealthy because the money is spent where it is needed.

The key to government spending during an economic collapse is to divide it into very different kinds of spending. One is to just keep citizens from going bankrupt and not being ever able to participate in the middle class again. The second type of spending is restructuring. If government did not spend at this time, we could not bring about equilibrium, as economist Paul Krugman pointed out in his "Depression Economics" editorial in the New York Times, because the result is a downward spiral that will destroy economic trade within the country and around the world.

Federal Reserve Chairman Ben Bernanke told lawmakers recently that massive government spending and bailouts are necessary to revive the economy because when people and businesses pull back someone has to fill the void or the economy goes straight into a very deep depression. Government is the only entity that can do this on a large enough scale. He made this statement even though he shares the concern about aid for ailing companies like AIG. Bernanke said, "We are better off moving aggressively today to solve our economic problems. The alternative could be a prolonged episode of economic stagnation that would not only contribute to further deterioration in the fiscal situation, but would also imply lower output, employment, and incomes for an extended period."

To put it simply: it takes money to make money.

Our economy was circling the drain when President Obama took the oath of office. After the Federal Reserve's unprecedented moves to aid the financial sector, and after the stimulus package has started to filter down to cities and counties, Fed Chairman Ben Bernanke said yesterday that the programs are having the intended effect of lowering the cost and increasing the availability of credit to American consumers and businesses. And if you ask why people are still losing their jobs – it’s because unemployment is a lagging factor. The banks and stock market always turn around first; then the general economy begins to get better – then last, always last, employment begins to increase.

The Tarp is beginning to work. Two banks, Wells Fargo and Goldman Sacs, have announced that they are now able to begin paying back the money. Most states have set aside plans to lay off teachers and policemen for the next year.

The Congressional Republicans and followers, some ‘conservative’ Democrats, and Fox News just do not get it. It’s time to send them back to school for Economics 101.

Monday, April 13, 2009

He passed his first test

Obama would have been held responsible and blamed if the operation had failed because he was ultimately in charge. By authorizing deadly force so early, Obama did the right thing. The order to rescue the captain of the Maersk Alabama was approved by President Obama on Friday, and a standing order to shoot to kill the pirates if necessary was issued on Saturday. Regardless of what you think of Obama's politics, he deserves credit for this decision. Had this situation been allowed to drag on and on, it would have been a black eye for the USA, making us appear weak.

Score one for President Obama.

The Hollywood version of a rescue usually has the President sitting in the White House Situation Room with a video link to the U.S. forces on scene. The President gives the orders to shoot and the guys with the guns jump into action. But that’s not reality.

The decision to deploy forces is based on high-level operation plans, concept plans, functional plans, and operation orders (see link below). The ultimate decision to deploy forces abroad is made together by the President and the Secretary of Defense. They oversee the entire Joint Planning and Execution Community, which includes, among others, the regional combatant commanders, the U.S. Transportation Command, and the U.S. Joint Forces Command.

The first step in the case of the Maersk Alabama was an Alert and Deployment Order. This Order, which is issued by the Secretary of Defense under the President’s knowledge and authority, alerts the relevant military forces that will be required to participate. In other words, if the SEALs are tasked to conduct the rescue they will have to fly to the scene. This means that Transportation Command is tasked to provide aircraft to move the force to the scene. The Alert and Deployment Order gets the forces moving.

To those who do not understand why an order was issued on Friday, and another on Saturday, there were no forces on the scene capable of affecting a rescue on Friday. It takes time for those forces to be alerted, grab their gear, and board a plane. Then, once in the air, they have to have a place to land and get on the ship. There were two orders –1) Alert and Deployment and 2) Execute Order. Once the forces have arrived on scene an Execute Order is issued. Again, this is signed out by the Secretary of Defense under Presidential authority and with the full knowledge of the President. The Order stipulates who can shoot whom, under what circumstances, and what is to be done with the dead and wounded.

Even in the Alert and Deployment Order there probably was a paragraph authorizing Emergency Assault and defining the conditions under which that should occur. The personnel capable of doing the shooting did not get on board the ship until sometime on Saturday. The Execute Order included ROE (rules of engagement) and Emergency Assault Authority at the discretion of the on scene commander.

If you had a chance to listen to the Admiral’s briefing on the operation, it was clear that this is how the mission went down. Obama gave the order early to the on scene commander to use force if necessary, leaving it up to the on scene commander to use his own best judgment. This is the way things should be done.

Whether you like or dislike Obama, he should be given credit by all citizens for doing the operation the way it is supposed to be done. He gave the proper order early, kept quiet about what was going down (even though many news entertainment networks were blabbing about his ‘absence’ in this affair), and did not create obstacles.

Obama was tested, and he passed the test.

Go here: JOPES http://www.fas.org/man/dod-101/dod/docs/pub1_97/Chap7.html

Sunday, April 12, 2009

The least of these

On Easter, Christians reflect on salvation and renewal. But many, in celebrating their “atonement”, all too readily forget the mission that was charged to them:

The Son of Man will put the sheep (good people) on his right and the goats (bad people) on his left. Then the king will say to those good people on his right, 'Come. My Father has given you great blessings. Come and get the kingdom God promised you. That kingdom has been prepared for you since the world was made. You can have this kingdom, because I was hungry and you gave me food to eat. I was thirsty, and you gave me something to drink. I was alone and away from home, and you invited me into your home. I was without clothes, and you gave me something to wear. I was sick, and you cared for me. I was in prison, and you came to visit me… I tell you the truth. Anything you did for any of my people here, you also did for me.'
Matthew 25:33-40

Over the years, I have heard many say that "America is a land of opportunity" and that the poor are poor because of laziness, drugs, drink, etc. For some, this is true, but for many it is not. Poverty touches too many lives in this wealthy country. They are not “just statistics,” but rather an indicator that tens of millions of people lack the security and opportunities they need to thrive and contribute fully. According to the latest available statistics, average incomes for the bottom fifth of U.S. households were lower in 2007 than in 2000 ($11,551 versus $12,229), and average incomes for the next highest quintile were also lower ($29,442 versus $30,353).

The Center for American Progress reports that between 1959 and 1973, poverty in the United States fell by 50 percent. More recently, in the seven years between 1993 and 2000, poverty fell by 25 percent, and child poverty fell by 29 percent. In both periods, a near full-employment economy was combined with federal, state, and local policies and efforts that directly sought to address unemployment and poverty. But the record of the past eight years demonstrates that without such an effort, poverty increased exponentially. Our governmental policy choices have a great deal to do with determining whether many win the benefits of economic growth, or only a few.

These days there are too many folks who are all too willing to blame poverty on the poor themselves. Poverty will end for individuals, this group tells us, when they pull themselves up by their bootstraps and go to work. But this overlooks the side of the problem the Bible does not overlook. There are social, economic and political forces at work that contribute to poverty. There are many places where double-digit unemployment has been the norm, even before the economic downturn, rather than the exception. This suggests a lack of jobs, not a lack of willing workers.

The Bible does portray some poverty as having its roots in personal behavior. Proverbs warns that those who refuse to work, or those who do not lay aside resources for a rainy day, or who indulge various desires can quickly become poor. That these behaviors contribute to poverty is obvious.

However, the biblical witness spends considerable more time on other causes of poverty. The frequent use of the expression "widows and orphans" is understood to mean those who are economically disadvantaged and powerless to do anything about it. Often the poor are those who are victimized by the powerful for personal or political gain. Some become poor, the prophets point out, because the marketplace is not fair. There are many warnings in the Bible about unfair scales and unfair wages. In all of these instances, the Bible is critical of the institutions and systems that take unfair advantage of people who are powerless against them, not of the individuals who happen to be poor.

We have seen it all over the news the last few months. Due to deregulation of the financial industry the marketplace has not been fair. It was rigged to help the rich become richer at the expense of millions of hapless individuals. This recent greedy misadventure of Wall Street into credit default swaps (derivatives) and subprime mortgages is what brought the economy down and hard times for millions of Americans. If unemployment rates reach double-digits, as some economists fear, nearly 7 million people will lose their jobs, more than 7 million will lose their health coverage, and more than 12 million will fall into poverty.

By 2007, the percentage of poor Americans who are living in poverty had reached a 32-year high. (This closely coincides, by the way, with the timeline of Reaganomics). Millions of working Americans are falling closer to the poverty line and the gulf between the nation's "haves" and "have-nots" continues to widen. After tapping friends and family, maxing out their credit cards and sufficiently swallowing their pride, at least 23 million Americans stood in food lines last year – many of them the working poor, according to America's Second Harvest, the Chicago-based hunger relief organization. The surge in food demand is fueled by several forces – job losses, expired unemployment benefits, soaring health-care and housing costs, and the inability of many people to find jobs that match the income and benefits of the jobs they lost.

According to Stacy Dean, director of food stamp policy for the Center on Budget and Policy Priorities, the reach of the economic slowdown has really taken down many folks who never expected to be poor. And according to Robert Forney, CEO of America's Second Harvest, this is not just a function of unemployment – a larger percentage of Americans are working poor, and the numbers have been growing for nine years. This may be the low-water mark for the economy, but for a whole lot of Americans – 43 million of them – the option of earning a living wage and benefits is not possible.

Blessed are the poor, for they need Christians' help:

The Bible is filled with significant and frequent references to God's concern for the poor. The evangelical social group Call to Renewal calls this situation "a moral outrage that our country refuses to do better." What role should people of faith have in making it better?

If Christians truly want to help our country do a better job of dealing with increasing poverty, where should we start? This goes beyond taking a turkey dinner to a poor family for Thanksgiving and then feeling good about oneself for giving charity or spending a day, even a week, helping to build a house with Habitat. If the faith community is going to participate in a response to the problem of poverty, we cannot overlook the economic and social forces that are beyond the reach of individual willpower. It means looking at tax codes, educational opportunities, healthcare, job creation, wages and benefits. It means re-regulating banks, mortgage, and insurance companies. It also means, if you are wealthy, paying more taxes in support of your government, country, and the social lifelines it provides for the “least of these.”

Jesus understood the obstacles we would encounter. Taking on the economically and politically powerful entities that create and maintain poverty in our world in order to increase their own wealth is no small task. But if we are to make a difference on behalf of the poor, that's exactly what Christians must do. When Jesus said, "Blessed are the poor," he was not saying poverty is blessed, but that the poor are not wicked or lazy. Jesus’ sermon was to remind us that the poor are not always responsible for their poverty.

As you celebrate the Resurrection and Atonement, where are you looking for Jesus? He is among those who have lost their homes through bankruptcy due to serious illness and not having enough or no health insurance; he is among those who have been abused; he is among those who have lost their jobs, and, consequently, their homes; he is among those who are caught in war zones; and the list goes on.

Jesus made it clear that in helping the "least of these” we also serve him. Whom or what do you serve?

Wednesday, April 8, 2009

I will never become a Twit.

Here are excerpts from an article written by Roger Ebert. (A link to the full article is given below.)

“…We have an urgent need, whether innate or evolved, to communicate as quickly and easily as possible outside our own minds. We can only shout so loud. Then come drums, beacons, messengers, mirrors, flags, the telegraph, radio, television, computers, the internet, the web, and now the time of PDAs. In the earliest days of the web, people created personal web pages to extend themselves into cyberspace. Then web sites invited users to have web pages without knowing much about HTML. With the advent of cell phones, the Web came into our portable possession. Then came texting and its simplified offspring, Twitter. All of this involved the communication of information, otherwise known as Talking....

...What interests me is the sight of our grandchildren in the presence of other people who are actually there, glancing down at an iPhone cupped in their palms like gamblers checking their cash. Then texting with their hands under the surface of the dinner table, as if sliding an ace up a sleeve. Sometimes receiving a message as surprising as a Royal Flush. OMG!

...I thought at first this compulsion desire was centered in teenagers. Then I began to observe it among editors, lawyers, cops, waiters, sports fans, construction workers, people in restaurants, even people watching movies. During President Obama's recent address to a joint session of Congress, a good many members of his audience could be observed twittering. This is as childish as throwing paper airplanes in class....

Members of both parties were observed. Rep. Joe Barton (R-Tex.) twittered: "Aggie basketball game is about to start on espn2 for those of you that aren't going to bother watching pelosi smirk for the next hour." A few minutes later his Twitter friends read: "Disregard that last Tweet from a staffer." How Barton, still sitting on the floor of Congress, pried the Blackberry from his staffer's cold, dead hands, I leave it for you to imagine....

...The point is that we are becoming a nation of twits. In the old days, when Mike Royko was stuck for a column subject, he'd call up the Chicago Daily News man at Police Headquarters or City Hall and ask what was happening. These days columnists seek to amaze us with their day's adventure on Twitter. OMG squared!

I will never become a Twit....I agree that many people find such sites useful. Cell phones have become an extension of the human ear. It is commonplace to find yourself standing next to people who are talking audibly, even loudly. They're hearing voices in their heads, but are not schizophrenic. What they are is elsewhere.

...Teenagers once were famous for shutting the bedroom door and talking with friends for hours on the phone. They still spend time on the phone, but some of them may spend more time texting. Instead of telling one friend "I think he's cool," they reach dozens: "Who thinks he's cool?" The answers twitter in. Me. Not me. No way. This is not conversation, but it is contact. I am here. I am me. We are joined in a web. We keep the matrix afloat. At 3 a.m.: Anybody awake? Me. Me too. Me too.

...The brain transmits tiny electrical signals. Eventually Twits will be able to twitter mentally, eliminating the Blackberry as a middle man. If a memory chip can one day be implanted in a human brain, a human could find himself occupying a new body. Where will the body be found? Why, at a clone farm, of course; they've already been invented in science fiction. Your body could be cloned and implanted with you, and you would be Benjamin Button now living toward the future.”

To read the whole article, The human race on a key ring by Roger Ebert, go here: http://blogs.suntimes.com/ebert/2009/03/the_human_race_on_a_key_ring.html#more

Friday, April 3, 2009

The joke is on us

As surely as the sun rises in the east and sets in the west, Republicans will offer tax giveaways to the wealthy as the cure-all for surpluses, deficits, boom times, and recessions. The government’s Office of Management and Budget communications director Kenneth Baer said this about the Republican alternative budget, "I have two words for you: April Fool's."

Just to give you some context, as the Center for American Progress noted, the Bush tax cuts delivered a third of their total benefits to the wealthiest 1% of Americans. Their payday was staggering. As the Center for Budget and Policy Priorities detailed in 2008, in 2007 millionaires on average pocketed $120,000 from the Bush tax cuts of 2001 and 2003. Those in the top 1% were allowed to keep an extra $45,000 a year! As a result, millionaires saw their after-tax incomes rise by 7.6%, while the gains for the middle class and poor were basically stagnate.

As the Republicans try to give away billions to those who are already living high on the hog, what do they budget for health care, research on renewable energy, natural disasters, or to bring down the deficit? Do they actually put the cost of the Iraq and Afghanistan wars in their budget as Obama did in his?

While the Democratic budget cuts taxes for middle class families, and makes critical investments in health care, education and clean energy, the Republican budget released on Tuesday called for "a marginal tax rate for income up to $100,000 of 10 percent and 25 percent for any income thereafter," which would result in a massive reduction in government revenue and another generous tax break for the wealthy. They also propose to cut taxes for business, freeze most government spending for five years, halt spending approved in the economic stimulus package, and slash federal health programs for the poor and elderly. The Republican budget plan would gradually eliminate the traditional fee-for-service Medicare program, offering a stark alternative ‘voucher’ plan so the elderly would have to buy their insurance on the open market.

But please beware, Republicans are playing a shell game with the numbers: You, the taxpayer would get to choose whether you want the new tax rate or the old tax rate. This is how the Republicans offer the tax cut without factoring it into the budget's revenue – suggesting that Americans won't actually take advantage of the lower rates. Instead, the GOP budget permanently extends President Bush's 2001 and 2003 tax cuts. A Republican budget committee aid said that the revenues assumed in the GOP budget are based on the current tax structure. In other words, in order to give you, the public, a more favorable picture of the deficit their budget would create, Republicans are making the assumption that Americans will choose the higher rate – hence, the shell game.

Under the current tax code, an individual making more than $160,850 pays a 33 percent rate; under the Republican plan, that taxpayer could choose to pay 25 percent instead. (For a family, the income threshold is $195,850.) For a family earning more than $349,700, the rate rises to 35 percent, but filers could still choose the 25 percent rate. If taxpayers did decide to pay the lower rate, government revenue would plummet by roughly $300 billion per year, said economist Dean Baker of the liberal-leaning Center for Economic Policy Research. This would effectively gut most domestic programs such as healthcare and renewable energy research.

A study by the non-partisan ‘Center on Budget and Policy Priorities’ demonstrated that the Bush tax cuts accounted for half of the mushrooming deficits during his tenure in the White House – and yet Republicans want to do more of the same. What’s worse, the Republicans have not put forward any credible deficit-reduction plans. Their main alternative to Obama's stimulus plan is a $3.6 trillion tax cut for the wealthy that will add that same amount to the national debt.

Once again Republicans want to give an overwhelming share of tax cuts to wealthier Americans. Yet the GOP plan fails to invest in high priorities such as education, infrastructure, public safety and biomedical research. And their plan for Medicare is that workers under the age of 55 would no longer be allowed to buy into the program but instead receive insurance premium subsidies. The Medicare move would gut the program and turn it into a voucher system. The Republicans are basically saying to the retired and elderly who often cannot qualify for insurance on the open market “here’s a small amount against your insurance premium – if you can find someone who will insure you.” The amount of the voucher would all too quickly fall behind the rising cost of health care.

Some of the features of the GOP budget are:

• Rescinding the newly passed economic stimulus package in 2010, except for unemployment insurance for those who have already lost their job;
• Freezing non-defense, non-veteran spending;
• Converting Medicaid into an allotment to states. Turn Medicare into an insurance voucher system. (Keeping current Medicare secure for those who are now over 55.)
• Privatize Social Security – if you lose the money in the stock market it will be your tough luck;
• Make permanent the 2001 and 2003 tax cuts while setting up a parallel, simplified tax code that taxpayers could opt-in to. Taxpayers would have a choice of keeping the current system, or choosing one that would tax couples making $100,000 (or individuals making $50,000) at a10% rate and taxing those above at 25%.
• Cutting the corporate tax rate to 25% as a “job-creating measure”;
• Increasing offshore oil drilling; no cap-and-trade;

Here is a graph from Republican Paul Ryan's Wall Street Journal op-ed on the subject, because it's a blatant exaggeration. They are saying that this is based on Congressional Budget Office's Long-Term Alternative Fiscal Scenario, but the CBO has never done an analysis that runs through 2080. This graph supposedly compares the Democratic Budget and the Republican Alternative based on spending as a percentage of GDP all the way up to 2080:




















The Congressional Budget Office has scored the Obama budget only through 2019, and it looks like this:












Apparently, Paul Ryan and his staff just took the CBO projections (above) that end in 2019 and drew a random line, extending upward at about a 45 degree angle, until 2080.

Census Bureau data reveal large, consistent differences in patterns of real pre-tax income growth under Democratic and Republican presidents since World War II. Democratic presidents have produced slightly more income growth for poor families than for rich families, resulting in a modest decrease in overall inequality. Republican presidents have produced a great deal more income growth for rich families than for poor families, resulting in a substantial increase in inequality. How can the average citizen not see that Republicans are in bed with the wealthy?

OMB’s Kenneth Baer was correct – the joke is on us.

Tuesday, March 31, 2009

Hijacking the American Dream

For the last 30 years the economy has been hijacked by the rich and powerful who forged it into a tool to use against the working classes. Republicans were smart in their deception, hijacking the American dream by crippling the programs that support it and then funneling the government's revenues to the rich through tax cuts and other benefits. They looted the government treasury and then pleaded governmental poverty when it came time to fund the services required by the people, such as Medicare and Social Security.

The gullible middle class and working poor were told that all of this was good for them, and whether out of ignorance or fear or prejudice or foolishness, many believed it. They signed onto tax policies that worked like a shell game that took from the poor and middle classes and gave to the rich. They were sold on "trickle down" – with the speeches of the Great Communicator (Reagan) having so addled their brains that they thought it was a wonderful idea to hand over their share of the nation's wealth to those who were already extremely wealthy. They were told that doing this would create jobs.

Contrary to what Republicans say, what they do is a different matter. They say they believe in small government, but when they are in power they do not shrink the government. Instead, they enlarge it by spending billions more on the military, turning the bounty over to the rich through no-bid government contracts. The difference between Republicans and Democrats is not the size of government, but what the money is spent on.

The foundation for the crash of the financial sector was set in place around 35 years ago. It all began when control of the U.S. economy was turned over to the banks and the investment firms of the Western world. It was called financial “deregulation,” which was started about 35 years ago under Nixon, continued by Reagan, made worse under Clinton who signed the 1999 Gramm-Leach Act which repealed the 1933 Glass-Steagall Act, with the result that bankers, brokers, and insurance companies can combine into humongous corporations deemed too big to fail. The Glass-Steagall Act had kept commercial banking separate from its investment-house cousins. Finally, the Bush administration turned a blind eye to what was going on with the financial markets, refusing to admit that the economy was in a recession until it blew up in their faces. Although Republicans deny that they were part of the problem, it was on Bush's Watch that the financial industry unraveled and took Main Street with it.

From 1994 to 2006 the financial industry ran amok due to a filibuster-proof Republican majority in Congress, led by iron-fisted Tom Delay who locked out debate on all legislation. (It's funny how the Republicans are now begging the Democrats to not do that.) Clinton acted with complicity when he signed the Gramm-Leach Act. Then, George W. Bush handed complete power over to the financial and oil industries, unwittingly setting our country up for the 2008 Crash. His actions were not surprising considering that fact that the Bush family has served the Wall Street financiers and oil barons for three generations.

This recession is a perfect storm, the result of a financial system where the money pool is largely created by bank lending. First, the system was based on credit/debt that currently cannot be repaid. Secondly, it is bankrupt because since about 1980, starting with clothing manufacturers, our industry and jobs have been increasingly outsourced abroad to cheap labor markets or cheap labor has been imported to replace the higher paid American worker. This caused middle class incomes to lose ground who, after running up their debt as high as possible, can no longer participate in the retail market. Third, it is bankrupt because deregulation allowed large banking institutions to gamble with high risk derivatives.

In the first few decades following World War II, the United States, despite many serious flaws, established the model of a highly productive society that shared its prosperity widely and made investments that were geared toward a more prosperous, more fulfilling future. The American dream was alive and well and seemingly unassailable. But following the oil shocks, the hyperinflation, and other traumas of the 1970s, and then being hypnotized by Reaganomics in the 1980s, Americans allowed the right-wingers to get a toehold and begin the serious work of hijacking the American dream.

During all this time the public has been like sheep, believing and following the Republicans into deregulation, financial shell games, and ponzi schemes. But, due to widespread greed and everyone trying to carve out their own very large piece of the pie by running up huge debts, the financial house of cards – built on too high leverage – came crashing down.

We are now caught up in a downward spiral that Washington is trying to stabilize. People who work for a living no longer have enough purchasing power to pay their debts or to buy anything much beyond necessities. This loss of purchasing power is hurting retail, which hurts the stock market, which causes tightening of the credit market and further slowing of production. But, as I said in previous posts, the recession train had already left the station well over a year ago – since December 2007 – with signs of weakness long before then. Two of the most prominent signs were stagnant middle class wages and the loss of jobs to other countries. Blue and white collar workers were told to quit whining and re-educate themselves for a different occupation while those at the top continued to rake in millions.

But working families were in trouble long before this recession hit because public officials, who should have been looking out for the middle class and the poor, were part of the collusion of Republican conservatives and corporate leaders that rigged the economy in favor of the rich – and ultimately brought it down completely. Abandoned by big business and their ideological henchmen in government, the hard working citizens of our country were exploited and denied the rewards of their increasing productivity. They were treated ruthlessly whenever they tried to organize. They were never reasonably protected against the revolutions in technology and global trade, NAFTA, or jobs being shipped overseas enabling corporations to increase the dividends paid to investors.

The New York Times’ David Johnston, noted that from 1980 (the year Ronald Reagan was elected) to 2005, the national economy, adjusted for inflation, more than doubled. Yet, the peak income year for 90 percent of Americans was way back in 1973, when the average income per taxpayer, in today’s dollars (adjusted for inflation), was $33,000. According to Johnston, that was nearly $4,000 higher than in 2005. This means that the average income for working Americans actually declined during the last 35 years. Men have done particularly worse because those who are now in their 30s – the prime age for raising families – earn less money than members of their fathers' generation did at the same age. What’s worse is during this economic downturn, men are losing their jobs at a much higher rate than their lower paid female counterparts.

So, why did so many in the middle class decide to live so high on the hog? It was not because incomes grew. It was because women entered the workplace in droves causing the average family to believe they could take on more debt in order to increase their standard of living. Now these hapless victims in the middle and working classes are watching their incomes shrink, jobs taken away, pensions disappear, and homes foreclosed on. Many are saddled with ever-increasing debt while they deal with the stress of trying to pay for gas and food price inflation.

Do not get me wrong – the majority of businesses seek only a fair profit to provide for and sustain their owners, employees, and share-holders, and are law-abiding and good citizens of their communities. But the largest ones, just like the East India Company of 1773 and the railroads of the 1880s, are out of control. These humongous corporations are threatening the very fabric of our nation, our society, and our world. They not only control our financial system, but also our daily lives, the food we eat, the water we drink, the air we breathe, the information we receive and therefore the thoughts in our head. They demand that we buy, buy, buy from them in a never-ending loop of subservient transfer of our capital, our time, and our freedoms directly into their coffers. Some of these corporations would kill for a dollar and destroy the world for an extra billion. Indeed, as you are reading this sentence many are doing just that, aided and abetted by conservative politicians and power-mongers all along the way.

At this point in time, with the economy likely to get worse for awhile, We the People have an opportunity to follow President Obama’s lead in reshaping our society, moving it toward a fairer, smarter, and more productive direction. The wealthy do not want that to happen, because it causes them to be less rich – maybe only worth a few million instead of many millions – which is why they are rooting so hard for President Barack Obama's initiatives to fail. They do not want to go back to the tax level they paid under Clinton and Bush I regardless of the fact that it was just 3% more. Most seem to have no understanding of the idea that “with wealth comes responsibility.” Many seem to not understand that they owe their allegiance and help to the country in which they made their millions. They apparently do not understand the word ‘sacrifice.’

Over the past 35 years the rich got richer while the rest of us barely treaded water. The only people who still have a more-or-less ‘normal life’ are in the upper middle classes and higher. Many of them truly do believe that they are privileged and the only ones who should own the Dream – to them we are serfs. The wealthy class, the corporate CEOs, many in the financial sector, would all love to do it all over again: dupe the middle class into paying the most taxes, etc, so they can hijack the American Dream for just themselves.

Tuesday, March 24, 2009

Nitpicking

It has become too easy for the media to try to make news with little context or perspective while the gullible public takes it all in and believes it. The media is leading the public, particularly those news commentators who believe that this will undermine President Obama. There is also a significant degree of pandering to the audience in order to increase ratings. They seem to believe that if the next story isn't about some even more outrageous than the AIG bonus then the audience will desert the network in droves.

Case in point: CNN has been running a headline, "Should Geithner Resign?" That is easier to make into news than, "Will Geithner's Plan to Have Government Join with Private Investors to Buy Distressed Assets from Banks Succeed?" But which one, in the end, is more important? But after today’s testimony before Congress and yesterday’s stock market run up when the Administration’s plan to buy the banks’ toxic assets, suddenly that headline disappeared. No longer is anyone calling for Geithner's head.

The latest cacophony in pundit circles comes hours after President Obama's appearance on 60 Minutes, where he cracked rueful jokes about the state of the economy and public sentiment over measures taken to save it all. The interview was pretty serious and somber, until Obama tried to lighten things up. "The only thing less popular than putting money into banks is putting money into the auto industry," he joked.

Steve Kroft, an interviewer who has had privileged access to President Obama stretching back to the start of his presidential bid, although also chuckling at the irony, questioned the cheery demeanor of a man who, at the end of a near disastrous week, should have been weighed down by the world.

"You're sitting here," Kroft said. "And you are laughing. You are laughing about some of these problems. Are people going to look at this and say, '... he's sitting there just making jokes about money'?"

Obama was not laughing about the problems and looked taken aback by Kroft’s statements: "No, no. There's got to be a little gallows humor to get you through the day. You know, sometimes my team talks about the fact that if you had said to us a year ago that - the least of my problems would be Iraq, which is still a pretty serious problem - I don't think anybody would have believed it.” Obama attributed his comments to "gallows humor."

For me, it was an example of "can-you-believe-this?" type of humor, which is understandable given the enormous challenges he faces. He was chuckling at the irony of it all. Anyone with half a brain would understand this.

But the Today show led its broadcast by asking if Obama's laughter was appropriate and publications ranging from the Chicago Sun-Times to the New York Daily News focused on his laughter in describing the interview instead of the substance of the interview.

It's the second time in days an Obama appearance has gotten more attention for perceived gaffes than for the substance. For example, Kroft noted in an aside that the government will eventually recover the money AIG pays in controversial bonuses by subtracting it from the next scheduled bailout payment. So doesn't that mean that, eventually, the government will ensure its money doesn't fund these bonuses? Shouldn't that get a more attention than Obama chuckling at the irony of the position he finds himself in?

President Obama has been criticized for being too grim by painting an economic picture that further exacerbates the nation's economic doldrums. Following the calls to "lighten up," he does so, and is criticized for not taking seriously the nation's pitiful economic state. How does he strike the elusive mid-point?

This nitpicking of Obama by the media seems unrelated to anything he's actually doing, fueled by the media's need to create an attention-getting story, the need to make news ‘interesting.’ It is also fueled by a desire of Obama’s critics to find something that will dent his massive popularity.

It's an odd situation: One moment, Obama is facing pointed questions from the media about doing too much. Then, when he travels to California to drum up support for his economic programs, he gets criticized for leaving the White House when he should be working on the economy. He gets criticized for being too grim about the economy, and then gets criticized for using humor.

So is he working too much, or not enough? Is he too grim, or too light-hearted?

It is apparently easier for Obama’s critics to nitpick about a moment of laughter than to offer serious discussion of the ideas contained in the nearly half hour interview aired on 60 Minutes.

Monday, March 23, 2009

The larger problem with AIG

Yes, A.I.G. executives were acting like pigs when they accepted millions of dollars in bonuses to executives after receiving billions in taxpayer money to keep from going bankrupt. ‘Populist’ anger came to a head last week over the A.I.G. bonuses. But the White House said using tax law to pry bonuses from bailed-out company executives is "a dangerous way to go."

This is not the way to do it. Who is to say that after taxing those greedy AIG execs, Congress wouldn’t take aim at any citizen with which it becomes angry and tax them into the ground as punishment? The tax code should never be used as punishment.

While acknowledging public outrage over $165 million in bonuses paid by a financial firm that just months earlier had turned to taxpayers for aid, the administration's economic advisers said President Barack Obama wouldn't govern out of anger. Several GOP senators on Sunday advised against the mob mentality that has Congress "grabbing its pitchforks and charging up the hill" in pursuit of the cash.

The House bill may have some problems in going too far in terms of legal issues, constitutional validity, using the tax code to surgically punish a small group. White House economic adviser Austen Goolsbee said Sunday that Obama understands the anger and that the best thing would be for AIG executives to return the bonuses. He also indicated that the president will look at what comes out of the House and what comes out of the Senate to see what ideas are there.

Obama's economic team said the president does not embrace this legislation. Vice President Joe Biden's economic adviser, Jared Bernstein, criticized the House plan as it headed to the Senate, where it was likely to be modified with bipartisan backing. Republicans and Senate Democrats seemed to line up with the president's policy team. For example, Republican Senator Judd Gregg said, "People are disgusted and outraged, as they should be, but let's not overreact in a way that basically has the Congress abusing the authority to tax its people."

Using the tax system to punish anyone is a bad precedent to set.

But there is a much bigger issue that has barely been touched upon by Congress, the media, or the public: the way tens of billions of dollars of taxpayers’ money has been funneled to A.I.G. counterparts – at 100 cents on the dollar. It does not make sense that Goldman Sachs, Bank of America, Citigroup and every other company that bought credit default swaps from AIG should be made whole by the government? Why isn’t Congress forcing them to take a cut?

What’s worse, some of those companies are foreign banks that used credit default swaps to exploit a regulatory loophole. Should the United States taxpayer really be responsible for ensuring the safety of European banks that were taking advantage of European regulations?

The person who has made this point most forcefully is Eliot Spitzer. In his column for Slate.com, he wrote: “Why did Goldman have to get back 100 cents on the dollar? Didn’t we already give Goldman a $25 billion cash infusion, and aren’t they sitting on more than $100 billion in cash?”

Mr. Spitzer also said that while “there is a legitimate sense of outrage over the bonuses, the larger outrage should be the use of AIG funding as a second bailout for the large investment houses.”

That is precisely my point. Those banks should also have to give back the money AIG gave them.

Sunday, March 22, 2009

What is your motivation?

Some passages in the Bible, mostly the Old Testament, imply that one is saved through good works. That is, God weighs the good and bad deeds that each person commits during their lifetime. If the balance is reasonably positive, the individual goes to heaven. Other passages in the Bible imply that one is saved solely on the basis of one's faith. If the believer confesses sins, is genuinely repentant, and trusts Jesus, then he or she will be saved. In this case, good works and deeds can be expected as a logical consequence of having first been saved. This is mostly supported in the New Testament and a tenent of most Protestant faiths.

But, whatever you believe about salvation, whether good works are necessary for salvation or a fruit of salvation, do you do these things because people are watching or do you act the way you do because you are solely concerned with serving God?

A few nights ago there was a story on the local news about a “club” or “society” holding an auction for charity. It works like this: various members of the club donate items to be auctioned off and the proceeds are turned over to charity after money is taken out to pay for expenses, which includes tables of wonderful food, drinks, and sometimes a band. The charity is used as an excuse to have a big to-do.

Mostly in my single days, I attended various parties, picnics, museum shows, auctions, and balls given in the name of charity. The price of admission is given to the selected charity, after expenses, yet in the meantime, the participants, dressed to the hilt, are there to see and be seen. I knew some of the attendees – most of them did not really care about the actual charity or the people who were to be helped. Knowing that fact and feeling uncomfortable with the public show of “piety,” I eventually ended my membership in a particular society (club) and quit going to these events, opting, instead, to write checks directly to the charities of my choice.

Jesus often spoke of public piety. The gospel of Matthew, Chapter 6, begins with the words, “Be careful” or in some versions of the Bible it says "Beware." In Matthew, Chapter 6, Jesus is telling the disciples that they are to be very cautious when it comes to the motivation behind their good works. Improper motivation behind good works was a common and serious problem in that time - just as it is today.

Jesus first describes the hypocritical acts of piety, showing how artificial, phony and ostentatious false piety is. Then He tells the disciples the proper way that piety expresses itself. Further, each of the three sections contains verbatim, and almost identical, important phrases for emphasis: “they have received their reward in full,” also “done in secret,” or “who sees what is done in secret.”

Here are the specific verses from Matthew 6:1-8 and 16-18 of which I am speaking:

"Be careful not to do your 'acts of righteousness' before men, to be seen by them. If you do, you will have no reward from your Father in heaven. So when you give to the needy, do not announce it with trumpets, as the hypocrites do in the synagogues and on the streets, to be honored by men. I tell you the truth; they have received their reward in full."

“But when you give to the needy, do not let your left hand know what your right hand is doing, so that your giving may be in secret. Then your Father, who sees what is done in secret, will reward you. And when you pray, do not be like the hypocrites, for they love to pray standing in the [churches] and on the street corners to be seen by men. I tell you the truth, they have received their reward in full.”

"But when you pray, go into your room, close the door and pray to your Father, who is unseen [spirit]. Then your Father, who sees what is done in secret, will reward you. And when you pray, do not keep on babbling like pagans, for they think they will be heard because of their many words. Do not be like them, for your Father knows what you need before you ask him."

"When you fast, do not look somber as the hypocrites do, for they disfigure their faces to show men they are fasting. I tell you the truth, they have received their reward in full. But when you fast, put oil on your head and wash your face, so that it will not be obvious to men that you are fasting, but only to your Father, who is unseen [spirit]; and your Father, who sees what is done in secret, will reward you."

These verses show that Jesus is very concerned with shows of piety. The three forms of piety he described are: good works or charity directed toward man, our approach to God in prayer, and self-sanctification. Many Jews of that day had turned these things into acts of self-promotion and self-exaltation. Charitable deeds were announced so that the giver would receive credit or praise from mankind. Prayers were done in public so that everyone would know how religious the person was. Similarly, men who fasted let everyone know the pain they endured to receive glory from men.

The central problem behind these very public acts of piety is the fact that they are not done out of a genuine desire to please God and be faithful to Him, but rather to gain standing before men. Jesus forces us to examine our hearts to look to the motivation behind our charitable acts. Although most religions speak of charity as steps toward salvation, Christianity views them as fruits of a redemption already achieved through Christ.

The philosophy of this world tells us the very opposite of what Jesus says. It says that man’s chief end is to seek happiness or personal fulfillment or self-esteem. When men do good works to be seen by men they are really seeking to please themselves or their own ego by glorifying self. Paul taught the same principle when he said that all of our obedience, even under the eye of men, must be done with sincerity or literally singleness of heart to Christ (Eph. 6:5). There should be no ulterior motive, false pretense, or egotism involved in charitable works.

“How can you believe, who receive honor from one another, and do not seek the honor that comes from the only God?” (John 5:44).

Matthew 6 speaks against man-made rituals which includes, in my opinion, the man-pleasing entertainment of the church's “praise movement” where most of the congregation stands, some raising hands in ‘praise’, some shedding tears, while the band on stage puts on a ‘praise’ show. Think for a moment what church services would be like today if the central motive was not to please men but, instead, to please God. All the pomp and ceremony of modern worship would disappear.

Jesus also said “Let your light so shine before men, that they may see your good works and glorify your Father in heaven” (Matthew 5:16). In chapter six Jesus tells the disciples that their good works must be done in secret, while in chapter five He tells them that the light of their works must not be hidden under a basket, but placed on a lamp stand so men can see these works.

Is this a contradiction? No, it is not – for the following reason:

Each of these teachings is speaking to separate issues. In the first the Savior is warning against cowardice because the disciples’ job is to spread the gospel of Christ in a fallen world. This requires courage and good works that are in public. In the second teaching Jesus is not dealing with courage, but self-exaltation or improper motives. He speaks against attracting attention to oneself in order to glorify oneself. A charitable deed should not be advertised by the one performing the deed. A charitable deed does not necessarily mean you are of good character, either. It depends on your motivation. God sees your character every day, who you are and what you do, when you think no one is looking.

Our charitable work should be done for God alone. To see and be seen by society or by fellow church members should not be the motivation.

So, just what is your motivation for your charitable works?

Thursday, March 19, 2009

The media wants it right now

President Obama has been in office for about two months. Yet for the past two weeks, much of the media has been suggesting that the Obama presidency is a failure because he didn't come into office, wave his wand, and cure all the problems that took Bush and the Republicans eight long years to build. The media wants everything fixed now. They want the economy to be fixed now. So, in trying to make news instead of just reporting news, they are saying things like: he is doing too much at once, he is not doing enough, he’s moving too fast, he’s moving too slowly, his staff is making too many errors, and on and on and on.

No matter what your personal opinion is of Obama, you have to admire his courage. He is doing what he thinks is right for this country, resetting its priorities for years to come, even if it means he only serves one term as president. He has said many times that if his policies do not work, he realizes that he will be voted out in 2012. Yet he moves ahead with what he sincerely believes is right for the country instead of what would be politically safe for him. It is rare that a politician would do this. I have heard him say more than once that he would rather be a good president for only four years than to be a politically-correct, mediocre president for eight years.

What the Washington political circles and the media do not understand is that what matters most to them is not the same thing as what matters most to average Americans. When it comes to judging Obama, the political and media groups are more interested in who seems to be winning or losing on a day-to-day or even a moment-by-moment basis. The pundits on Fox News, CNN, and other news programs are increasingly finding fault with Obama, although the public still likes him and believes in his policies. The average American takes a broader look at the man, focusing on whether he is really trying to make their lives better.

Obama seems well aware that even if the pundits are quickly growing disillusioned with him, the public is still taking a longer view. Last week he reminded the media that "there are no shortcuts to long-term economic growth, and we can't just keep on doing the same things we were doing before and somehow expect that all of our problems will be solved. We've been in office all of seven weeks so far. This is a crisis that was eight years in the making, maybe longer in certain aspects of it," he said. "…it’s going to take some time, and the truth of the matter is the American people, I think, understand that it's going to take some time. Keep in mind it's only been two weeks since I gave a joint session speech to Congress, the day after which everybody said, 'Boy, that was really clear.' ...The reviews were pretty good....”

Obama has signaled many times that he has no intention of backing off. He framed his administration's priorities as an urgent matter of solving problems that have been too-long delayed. Obama said his ambitious goals in such areas as education, health care, and energy policy are essential to laying the foundations for long-term growth. He said, "I think that extraordinary times call for extraordinary measures. Yes, they require some uncomfortable votes. If it was easy, I'm assuming it would have been done 20 years ago or 30 years ago. It's not easy [politically], but it's the right thing to do. ....The days of growing the economy through an overheated housing market or through people running up exorbitant credit cards bills are over. We've got to put our growth model on a different footing.”

The media’s impatience is not the only problem. There is the problem of Republican lock-step ‘just say no’ to everything, with Cantor or Boehner, often surrounded by a group of Republicans, making statements every time they think they have found something with which to make the president look bad. They are trying to rebuild their own party by tearing him down. They have not publicly said they want him to fail, but they seem to be doing all they can to make him fail. President Obama has challenged these Republican critics to do more than just say no:

"I think what will be interesting is the degree to which my Republican colleagues start putting forward an affirmative agenda that's not based on ideology but on the very real struggles and pain that people are feeling right now around the country and how do we get this economy back on its feet. …Opposition is always easy. Saying no to something is easy. Saying yes to something and figuring out how to solve problems and governing, that's hard. On the budget debate, for example, you've got people who say, 'We want to bring down the long-term deficit, but we don't want to cut certain programs that are important. Oh, and by the way we don't want to raise taxes...well, show me how you're going to do it."

Then there is the growing concern by some moderate Democrats about the President’s agenda for comprehensive health care reform, a major push toward renewable energy, and an overhaul of tax policy being done at the same time he is dealing with the biggest economic crisis in a generation. They are so afraid that Obama could fail from “trying to do too much at once” and possibly causing them to lose their seats in the next election that they have become less concerned with policy changes that really would raise all boats. These Democrats are cowards.

Obama has acknowledged people’s concerns about his plans to rescue the nation's economy. "I think the one area where there's still significant uncertainty has to do with the banks, and that's obviously a particular concern to Wall Street," he said. "The challenge for us there is ... we're in the process of conducting the stress tests for the banks, to get a better sense of where their capital positions are and how strong they are. And we don't want to prejudge those tests or make a lot of statements that cause a lot of nervousness around banks that are already having difficulty."

In other words, this will take some time. Be patient.

“Whether we're talking about Republicans or my fellow Democrats, my argument is going to be that these are the right priorities for America, these are the right priorities for long-term economic growth,” Obama said.

Kevin Diaz writes in the Minneapolis Star Tribune regarding Obama’s latest press briefing: "Speaking slowly and deliberately, like the college professor he was, Obama made clear that his administration is in its infancy and that he still has the public on his side.... For early signs of hope, Obama pointed to his new housing plan to provide relief to homeowners facing foreclosure. 'You're already starting to see an uptick in refinancing that is providing families with relief,' he said. 'And in certain pockets of the country, you're starting to see housing prices stabilize after a long drop.

Washington is so full of people who believe that governing is a win-lose proposition that they seem unable to do what is right for this country. Obama said he had expected battles in Congress over his budget, but rebutted GOP assertions that the ambitious initiative represented a drastic lurch to the left. “For them to suggest that this was some radical assault on the rich makes no sense whatsoever,' Obama said, noting that a significant portion of the budget's tax increases - rescinding former President George W. Bush's tax cuts for more affluent taxpayers - had already been anticipated in Bush administration budgets." These Republicans are hypocrites. They were actually planning to do the same thing because it is fiscally necessary.

Most of us in the heartland are willing to wait for long term results – unlike the pundits who want all the problems solved right now or else they will declare Obama’s presidency a failure. They obviously feel a need to make news - as if there isn’t enough news already out there.

Tuesday, March 17, 2009

A.I.G. is a P.I.G.

Last fall, Hank Paulson (Bush administration) originally said it would cost $85 billion to save AIG. AIG's $150 billion federal rescue package, as revamped and expanded last November, included $40 billion from the TARP's Systemically Significant Failing Institutions Program, which purchased perpetual preferred shares in the company and warrants equal to 2% of issued and outstanding shares. The Federal Reserve Bank of New York, which provided the remaining $110 billion loan and liquidity package, holds warrants for nearly 80% of the company's equity.

Now, AIG has come under fire for doling out $165 million in bonuses to some employees after accepting huge government bailouts. The company also sent billions of dollars it owed to banks in other countries as well as to American companies such as Goldman Sachs.

NOTE: The New York Times published a shocking story about how the SEC was lobbied in 2004 by the nation's five largest investment banks to change a regulation that limited the amount of debt they could take on. The exemption unshackled billions of dollars held in reserve as a cushion against losses on their investments, and led to the unraveling of the financial sector. Among the five banks leading the charge to change the rule was Goldman Sachs.

While the government controls an 80 percent equity stake in AIG, it supposedly does not have the legal authority to freeze the payments. Instead, the government says it will reign in AIG spending on the $30 billion more AIG received in additional TARP funds. Meanwhile, New York Attorney General Andrew Cuomo subpoenaed AIG in his latest round of investigations into Wall Street compensation. Cuomo is likely looking for some dirt on the roughly $55 million AIG previously paid out to the financial products unit, under its $450 million retention program.

The following is a copy of the March 17 letter New York Attorney General Andrew Cuomo sent to Rep. Barney Frank:

Dear Chairman Frank:

I am writing to provide you and your Committee with information regarding an ongoing investigation my Office has been conducting of executive compensation at American International Group (AIG). I hope this information will be useful to the Committee at its hearing on AIG tomorrow.

We learned over the weekend that AIG had, last Friday, distributed more than $160 million in retention payments to members of its Financial Products Subsidiary, the unit of AIG that was principally responsible for the firm's meltdown. Last October, AIG agreed to my Office's demand that no payments be made out of its $600 million Financial Products deferred compensation pool. While this was a positive step, we were dismayed to learn after the fact that AIG had made multi-million dollar payments out of its separate Financial Products retention plan on Friday.

AIG now claims that it had no choice but to pay these sums because of the unalterable terms of the plan. However, had the federal government not bailed out AIG with billions in taxpayer funds, the firm likely would have gone bankrupt, and surely no payments would have been made out of the plan. My Office has reviewed the legal opinion that AIG obtained from its own counsel, and it is not at all clear that these lawyers even considered the argument that it is only by the grace of American taxpayers that members of Financial Products even have jobs, let alone a pool of retention bonus money. I hope the Committee will take up this issue at its hearing tomorrow.

Furthermore, we know that AIG was able to bargain with its Financial Products employees since these employees have agreed to take salaries of $ I for 2009 in exchange for receiving their retention bonus packages. The fact that AIG engaged in this negotiation flies in the face of AIG's assertion that it had no choice but to make these lavish multi-million dollar bonus payments. It appears that AIG had far more leverage than they now claim.

AIG also claims that retention of individuals at Financial Products was vital to unwinding the subsidiary's business. However, to date, AIG has been unwilling to disclose the names of those who received these retention payments making it impossible to test their claim. Moreover, as detailed below, numerous individuals who received large "retention" bonuses are no longer at the firm. Until we obtain the names of these individuals, it is impossible to determine when and why they left the firm and how it is that they received these payments.

If AIG were confident in its claim that those who received these large bonuses were so vital to the orderly unwinding of the unit, one would expect them to freely provide the names and positions of those who got these bonuses. My Office will continue to seek an explanation for why each one of these individuals was so crucial to keep aboard that they were paid handsomely despite the unit's disastrous performance.

As you may know, my Office yesterday subpoenaed AIG for the names of those who received these bonuses, and we plan to do everything necessary to enforce compliance. American taxpayers deserve to know where their money is going, and AIG's intransigence and desire to obscure who received these payments should not be tolerated. Already my Office has determined that some of these bonuses were staggering in size. For example:

-- The top recipient received more than $6.4 million;

-- The top seven bonus recipients received more than $4 million each;

-- The top ten bonus recipients received a combined $42 million;

-- 22 individuals received bonuses of $2 million or more, and combined they received more than $72 million;

-- 73 individuals received bonuses of $1 million or more; and

-- Eleven of the individuals who received "retention" bonuses of $1 million or more are no longer working at AIG, including one who received $4.6 million;

Again, these payments were all made to individuals in the subsidiary whose performance led to crushing losses and the near failure of AIG. Thus, last week, AIG made more than 73 millionaires in the unit which lost so much money that it brought the firm to its knees, forcing a taxpayer bailout. Something is deeply wrong with this outcome. I hope the Committee will address it head on.

We have also now obtained the contracts under which AIG decided to make these payments. The contracts shockingly contain a provision that required most individuals' bonuses to be 100% of their 2007 bonuses. Thus, in the Spring of last year, AIG chose to lock in bonuses for 2008 at 2007 levels despite obvious signs that 2008 performance would be disastrous in comparison to the year before. My Office has thus begun to closely examine the circumstances under which the plan was created.

I look forward to continuing to cooperate with the Committee in any way possible to ensure that taxpayer funds are not misspent on unjustified bonuses or otherwise misused.

Very truly yours,

Andrew M. Cuomo

Attorney General of the State of New York



This is outrageous. Without strings attached to its bailout money, A.I.G. has become a P.I.G.

Wednesday, March 11, 2009

Too Big To Fail?

Simon Johnson, Professor of Economics at MIT, explained to Bill Moyers (Moyers Journal on PBS) that the U.S. financial system currently reminds him more of the embattled markets of emerging countries he encountered in his time with the International Monetary Fund than that of a developed nation. As such, Johnson believes that the U.S. financial system needs a "reboot," breaking up the biggest banks, in some cases firing management and wiping out shareholder value. Johnson tells Bill Moyers that such a move would not be popular with the powerful banking lobby: "I think it's quite straightforward, in technical or economic terms. At the same time I recognize it's very hard politically."

Without drastic action, Johnson argues, taxpayers are merely subsidizing a wealthy powerful industry without forcing necessary systemic changes:

"Taxpayer money is ensuring their bonuses. We're making sure that banks survive. And eventually, of course, the economy will turn around. Things will get better. The banks will be worth a lot of money. And they will cash out.”

“And we will be paying higher taxes, we and our children, will be paying higher taxes so those people could have those bonuses. That's not fair. It's not acceptable. It's not even good economics."

Johnson expands these arguments on his blog, THE BASELINE SCENARIO:

"…weakening the big banks and their bosses should not be seen as an unfortunate side effect of beneficial medicine. It is exactly what we need to do under these circumstances. Unless and until these banks' economic and political influence declines, we are stuck with too many people who know exactly what they can get away with because their organizations are too big to fail."

“And weakening these banks (or actually having some of them go out of business and be broken up) as part of a comprehensive system reboot - with asset revaluations at market prices and a complete recapitalization program - will help return the credit system to normal.”

H-m-m-m. Break up the huge banks into smaller banks. Take their power away from them. Make sure they are never again too big to fail.

Interesting idea. I like it.

Sunday, March 8, 2009

A lament for newspapers

The world has changed from the time of my youth – with high exposure to many types of media. But change is constant, so studying how the answer changes to what life is all about is important. Since I have a mind of my own, after garnering facts from newspaper articles (not the editorials), I’ll decide the answer for myself. But most people are so busy these days that they all too often do not pick up a daily newspaper and, instead, sit in front of the TV allowing the commentators to fill their brains with mostly garbage. Being retired, I have the time to spend a couple of hours browsing the internet to read online newspaper articles from all over the U.S. and the world. This helps me to be well-informed.

Survey the latest news about newspapers – the unending layoffs of staffers, the ever-shrinking content – and then understand that there's a threat here, not just for those being laid off from a struggling business, but to you. The threat is a curtailment of unadulterated, straightforward information resulting in a wholesale intellectual diminution.

Tom Watkins, a freelance writer and business education consultant, said, “Our newspapers are dying across America …. Does the death of newspapers equal the death of our democracy? We are losing great newspaper writers to budget cuts and early and forced retirements. One has to wonder when the last quality writer will be asked to shut off the lights of once-proud newspapers.”

Due to a lack of profit from falling retail advertising and circulation decline, thousands of newspaper jobs have gone out the window, many of them at our most prestigious papers. A study by the Pew Research Center shows that 85 percent of metro papers and more than half of small-town dailies have laid off staff over the past several years. The smaller staffs are accompanied by less space for news, and, according to Pew, we are therefore getting reduced coverage and quality. Many newspapers are completely shutting down such as The Rocky Mountain News, Denver’s leading newspaper for the last 150 years, and The Cincinnati Post, its presses stilled after 126 years.

It is easy to join the crowds in cursing mass media, putting newspapers into that same genre, chanting about negativity, bias, shallowness, tastelessness and more. Yet there is a broader truth about the accomplishments of print journalism and its place in our pluralistic, democratic society. Consider how much less you would know without newspapers. Your life experience would be less rich, less discerning, alert, or aware. It would be as if someone were dimming the lights, and those of us who are now newspaper readers would be more prone to misunderstandings, more likely to miss opportunities, and much more gullible.

Newspapers do something that television news cannot. They give you details, all those little pieces of information that add up to context and understanding. On television, a summary of a major event in a few minutes or more does not allow viewers learn much. It is the details that attach the information to your brain, and when they are provided in print, the brain works more intently than when watching television.

Too many people are turning to Faux News (Fox) and glitzy CNN to get information. But the television “news” channels provide very little in the form of real news. They are what I call “entertainment news.” They latch onto high profile stories, refusing to let go, all too often making news instead of reporting news. I do not need or want the “news” to give me presumptive or allegedly definitive answers to how the world works and why. That is the reason I do not particularly like “entertainment news” commentators such as Lou Dobbs on CNN, Keith Olbermann on MSNBC, or Sean Hannity on FOX. What they do is not news, but opinion which leans too far left or too far right.

The plentiful critiques and criticisms of the “entertainment news” media is a cacophony that dulls the ability of people to get to the heart of what they need to know, want to know, and why. As a thinking person, I want to find my own answers to how the world works. I do not want to be told what to think.

If people would spend at least 30 to 60 minutes each day turning off the “reality” shows on TV, and, instead, browse newspaper headlines and read a few articles about what is going on in the world, most would have a better understanding of life. The straightforward articles from the newspaper are the best place to garner unbiased information, with the exception being the editorial pages, because it is an “instruction manual for operating in the world.” As a history teacher, this is what I told my students. If they listened to me, and hopefully most did, they learned to ask who, what, when, where, why, how, so what and what does it mean – to be thinkers and doers.

Again, the newspaper is an instruction manual, not the manual. But it is a manual we citizens all need in order to maintain our democracy. In a dictatorship, what is one of the first industries they want to control? It is the newspapers.

Will “entertainment news” and bloggers become the new paradigm of news? I don’t know. I hope not. Many young people mistake Jon Stewart’s and Steven Colbert’s news parodies for news. They also rely on blogs for their news. Bloggers, like me, are not professional journalists.

Not all is necessarily lost. Perhaps innovative editors will come up with ways to use the internet to preserve the value of newspapers. A continued demand for better information products by an audience hungry for it, as well as brighter, braver, more imaginative media executives who come up with new business models and a better use of technology might help some newspapers survive.

It would help if more citizens understood the value of newspapers.