Current Republicans are NOT Fiscal Conservatives

I have heard a number of people, including George Will, talk about President Obama being a bit to the right of Dwight Eisenhower and Richard Nixon. I agree, Obama is not a particularly progressive president and seems far too willing to give too much away in negotiating to reach a common area. That does not mean he is not to be applauded for compromise in an age of total non-compromise by the extreme right, he just over does it. The stimulus package should have been far greater than it was to get the economy going, and public works for our infrastructure should be part of our economic recovery. And in no way should we be reducing the safety net for society in terms of is now called entitlements. Reducing these takes the economy the wrong direction as well.

The whole area of deficit reduction, which I have written about being is a red herring. We need to create jobs and get the economy running before reducing debt and he should know that. One writer noted that Reagan won his election by claiming the national debt was at all time high of 1 trillion; not it is 13.64 trillion, and who created all that debt? Primarily Republicans, including Reagan and those who lead into undeclared wars that congress would have to approve. $10/84 trillion in debt lies in the hands of the Reagan and the two Bush administrations; we only found relief in the Clinton years which George W immediately squandered.

The same writer, Tim Hogan wrote about a conversation he had with Karl Rove about a dozen years ago when Hogan was concerned about the national debt. Rove said, “Deficits don’t matter!” When pressed about the matter in relation to our experience as a nation in the 1990’s. Rove replied, “No no, no, no…What I mean is that the people don’t vote on deficits. That’s why they don’t matter.” Scary reasoning.

In the 2002 elections at a discussion in the Vice President’s office O’Neil was showing how the numbers were growing the deficit which threatened the economy. Cheney cut him off saying, “Reagan proved deficits don’t matter… We won the midterms. This is our due.” A month later Paul O’Neil was fired as Bush’s first Treasury Secretary.

Here are some charts  and comments that Cate Long had in an article Republican fiscal conservatism is a myth.

Government has expanded tremendously at every level in the United States over the last several decades. Expenditures have risen; constituencies have gained new subsidies; and loads of debt has been taken on. It’s unstable and it’s time to go on a diet.

The Republican party declares that they are the party of fiscal conservatism which has been beating back the profligate Democrat party. Here is the war cry from their 2008 party platform:

The other party wants more government control over people’s lives and earnings; Republicans do not.  The other party wants to continue pork barrel politics; we are disgusted by it, no matter who practices it.  The other party wants to ignore fiscal problems while squandering billions on ineffective programs; we are determined to end that waste.  The entrenched culture of official Washington -– an intrusive tax-and-spend liberalism -– remains a formidable foe, but we will confront and ultimately defeat it.

I wondered if the Republicans’ charge was accurate or if both parties had a tendency to spend tax dollars to buy support. Was there any quantitative evidence that Republicans were running tight fiscal ships? Looking at the finances of the states might create a better understanding. All states except Vermont must end the year with a balanced budget. Many of them require reserves in the form of rainy day funds. I pulled data from the National Association of State Budget Officers Fiscal Survey of the States, Fall 2011 covering “Total Balances and Balances as a Percentage of Expenditures, Fiscal 2010 to Fiscal 2012″. This is basically what states have left over at the end of the fiscal year. What I found is that both parties can practice sound fiscal policies or run very close to the edge of fiscal catastrophe. Republicans have no lock on tight fiscal ships.

The top chart shows that three of the ten states with the highest year-end budget surpluses and rainy day funds were controlled by Democrats and seven were controlled by Republicans. The four states with the biggest year-end balances are energy-producing states, led by Alaska. The guaranteed energy revenues that these four states enjoy would likely lead to big surpluses regardless of which party ran the state.

The chart below shows the ten states with the weakest year-end fiscal position. Six of the ten were controlled by Republicans. This data shows that a state can be Republican-controlled and still skirt the edge of the economic precipice.

The nation has really big fiscal problems to face; rhetoric and myths will not solve our problems. We need government but it needs to be run wisely and efficiently. Both parties seem to have been fiscally imprudent. There is likely to be myths about the Democrat party, too. Let’s find them and debunk and get on to rebuilding our nation.

More data: Reagan tripled the deficit from $997 billion to $2.85 trillion the highest percentage ever. At that rate it would be $75 trillion today. He raised the debt ceiling 18 times more than Carter, Clinton and Obama combined. He lowered taxes on the rich and then spend like mad to outdo the Russians in the cold war. He bailed out Chrsler and the saving-and-loan industry; $150 to the S&L’s were never repaid.

Eric Black this year also questioned Paul Ryan’s fiscal conservativeness. He writes, Pre-Reagan, the term "fiscal conservative" referred to those who wanted to balance the budget or at least hold down the accumulation of debt. Since Reagan, "fiscal conservatives" are those who always favor tax cuts, and the cuts generally turn out to make the tax code less progressive. This fits Ryan and Romney both. They have lots of idea for reducing government spending, especially on programs that benefit the poor, the elderly and the sick. (The one exception is military spending -- which I personally try to avoid calling "defense" spending since the United States maintains a military establishment far far far in excess of anything that could reasonably be called necessary to defend the country from any real threat to “national security” as that term would be defined by any other more normal country.) The Ryan budget plan cuts pretty much every government function except military.

If you made those cuts and left the tax code alone, you would shrink the deficit reasonably steadily and eventually get to balance. If, instead of leaving the tax code alone, you phased in some small increases in top tax rates, or eliminated some loopholes and deductions, or both, you could get to a surplus and actually start to pay down the debt that conservatives are always complaining about.

We need some real progressives with sound economic policy to get this country going again with good middle class jobs, and revitalized infrastructure and care of those in need.

Revolving Door Stories

Bill Moyers recently did a piece on the revolving door of congress, meaning folk who move out of government into lobbying positions. While it is against the law for politicians to lobby the former colleagues for 1 or 2 years after leaving office that does not mean much. Following are stories of these revolving doors.

Rep. Jason Altmire, Pennsylvannia Dem. Lost his primary but now works now as a vice president at Blue Cross/Blue Shield in Florida. The pharmaceuticals and healthcare industries gave him $161,000 to run and his employer gave $272,250 to his campaign. He was against Obamacare.

North Carolina Rep. Health Shuler, Dem. Did not seek reelection after redistricting made it unlikely for him to win. He will be a vice president of Duke Energy. In congress he was a member of the Blue Dog Coalitions of fiscally conservative Democrats. He stated his relationship made in congress will help Duke.

Jo ann emerson (R-MO) won reelection and announced her retirement to be the head of the National Rural Electric Cooperative which spent 2 million in 2012 and almost $3 million in 2011 lobbying. They gave $72,000 to her campaign. Her salary now is $1.5 million, 8 ½ fold more than as a congresswoman.

Mike Ross (D-AK) retired this year and will be senior vice president for Southwest power Pool. He received $20,500 in donations even though he didn’t run for office.

Elizabeth Fowler a Capitol Hill aide Obama chose to oversee the implementation of the health care act and was one of its key architects now has a senior-level position with “global health policy for Johnson and Johnson’s.

Since 2010 of 119 former senators and representatives 25 now work at companies and lobby or are clients of lobbying firms. Chris Dodd (D-CT) CEO and chairman of the Motion Picture Association of America where he coordinates their lobbying. Mel Martinez (R-FL) resigned mid term and is not a lobbyist for JP Morgan a bank he regulating while on the Banking, Housing and Urban Affairs committee. Christopher Bond (R-MO) did not run for a 5^th term in the senate to retire but now is a lobbyist for Thompson Coburn working two days before he replacement was sworn in. Bob Bennett was targeted by the Tea Party in 2010 and lost to their candidates after 18 years in congress has formed the Bennett Consulting Group that lobbies for JP Morgan, again he was a member of the Banking, House and Urban Affairs subcommittees.

The list goes on and on. Citizens for Responsibility and Ethics in Washington revealed that 108 3 and 4 star generals left the military between 2009 and 2011 of which 76 (70%) took jobs with defense contractors.

Just makes you proud of the system does it?

The Shell Game

At the county fairs of my youth there were guys who invited you to play the shell game (also on the streets in cities and anywhere else). They would place a pea under a shell move the shells rapidly around and then asked you to guess which shell had the pea under it. We suckers who played the game generally lost. It reminded me of the Ed Asner video piece I have on this web site where he says, speaking for big business etc., “look over there” as a means of misdirecting our focus so we don’t see the real issues that are taking place. People fell for it at the country fairs, the city streets and still are.

The big shell game I see taking place right now is about the national debt. Republicans during the election kept trying to scare the public with the fear of trillion dollar deficits while Obama and the Democrats talked about jobs and living wages. We know who won the election, significantly.

But the debate still goes on as we approach the so-called fiscal cliff. It is a shell game, a red herring. This is not to minimize the problem of the deficit but to put it into proper perspective. Along with these red herrings is the talk about reducing entitlements. Both of these ideas would lead to worsening job markets, increase the problems of the middle class, and crush those in poverty.

If you want to decrease the deficit you have to grow the economy especially the middle class. Students of history know when the middle class is strong the economy is at its strongest and then you have the ability to pay down debt (not that politicians always do that, but it is the time for it.)

The European economy fell for this shell game concentrating on paying down debt to the detriment of the economies; we don’t want to follow in their footsteps; it didn’t work.

So Obama and Boehner debate and I worry that Obama will give away too much in terms of entitlements in the spirit of compromise and thus endanger our potential growth.

We need to go back to tried and true economic theory that worked in the past: demand side economics or Keynesian economics. James K. Galbraith wrote this month, “Our current situation, the financial sector makes its money by destroying not by building.” He points to larger issues in our economy. The distribution of wealth in our economy is a scandal, but our economic processes are even more scandalous yet seem to remain under the radar.

If we are going to build this country again we need to return the policies that made us a great nation, to the times Tom Brokaw calls “the great generation.” A time when the country was more unified (okay, wars help us do that; but this is akin to a war now.) We need to worry about public services and that is what the populace wants according to every poll I read. We want better schools to be competitive in the world. We need to care for the environment and the alternate energy again to be competitive and also just to survive; it is the right things to do. We need to make sure the advanced education is available to everyone as it was in my youth, and not just limited to the wealthy or plunge students into crushing debt. We badly need to get health care under control. We have plenty of models around the world that show us how better quality and less expensive systems work and we should learn from them.

Galbraith talks about the need to come to terms as to whether we are going to embrace the core institutions and values of the New Deal and the Great Society that worked that provided all those things or to continue down the slippery slope of supply side economics that has created our current mess.

We need to provide security for folk in retirement years and for those who are in trouble because of misfortune. Medicare needs to have competitive bids for medicine not protection for pharmaceutical companies; that’s nuts. Insurance companies need to be on short reins working for the public good not just the bottom dollar profits of the share holders.

Reagan began the attacks on those core values and unfortunately the power of wealth has manipulated the government and played the shell game well with the public. We need to regulate companies not deregulate them as we have learned they just take advantage of others as they fight for a bigger and bigger share of the economic pie; and their managers make outlandish salaries and get absurd perks.

The jobs of the future will be primarily service jobs as we don’t make much anymore. Thus it is in our self interest to pay those who work in the service industries well to stimulate the entire economy. Yes, that means supporting unions again. We need to shore up our public retirement programs as we have learned companies have shown irresponsibility in safeguarding their own pension plans. Experience has taught us that governments run better insurance programs than private ones do which hand out huge salaries and perks and insure only those that will make them the most money.

More than ever we need to keep our eye on the pea and not be fooled my all the misdirection that is taking place in our society and our economy. Our country needs stability not a shell game or we’ll all be conned.

Salmon and Swans

Here’s another piece from The Progressive Magazine from an article by Terry Williams “The Presence of a Swan.” He begins by talking about a Tlingit Native American custom of when the first Salmon would arrive (I assume for spawning) it was greeted as an elder and caused a celebration. There were ceremonies and songs and the Salmon was their guest and was respected. The Salmon also got eaten and then its bones were returned to the sea where they would be reassembled to return again and again. The Tlingit saw the salmon as a gift among many gifts for which they are thankful.

When my Tlingit friend Sasha was showing us around Juneau when we visited there, he showed us refrigerated trailer stacked upon refrigerated trailer full of frozen salmon ready for shipping to all places for folk to eat. Or, in other words, the salmon for many has become just another commodity from which folk can make a bunch of money.

Sasha also told me stories of how folk of my culture and religion did evil things to him and his culture when he set out to begin his practice of ministry in Alaska. I have not been able to get those images of bigotry and small mindedness out of my mind since and it makes me ashamed of part of my culture and my denomination. Sasha and I were in seminary together and were good friends, even writing a book on contemporary worship together as a project (none had be written yet.). How different our lives turned out in that I was allowed practice my calling and he was not. He is a good man with great children and has done well with his life and given much to his people and community. But I feel the thorn still festers for both of us.

The article I read was about connections. And the salmon celebration was illustrative of how a culture and a people can see and celebrate those connections. The author then tells a story of a birthday celebration he had in Paris where he and a friend walked by a large reflective pond where a solitary swan swam in the distance. The author, inspired by his surroundings, bends down to the water to put his hand in the water and his sunglasses fell off. His friend immediately knelt to retrieve the glasses when they both looked up and saw the swan a few inches away looking them right in the eye. The serene swan just paddled there in place staring at them tilting his head from side to side for different perspectives. They even had a bit of human to swan conversation before the swan eventually swam away. It was a gift, it was a connection.

How could it would be if we could spend more time seeing our connections and celebrating them and giving thanks for them rather than just seeing commodities for which we must compete and keep only for ourselves and ours.

Ralph Nader Still Around and Kicking!

I finally bought a magazine with my Kindle; pretty handy. The magazine was The Progressive, which even makes my liberal bones tingle a bit. In it Ralph Nader writes a piece “Overcoming Powerlessness.”  He goes back to as essay by John Maynard Keynes called Economic Possibilities for our Grandchildren. Keynes point was that with our resources and abilities we could easily eliminate our “economic problem” namely poverty. He envisioned that his grandchildren could live in a time of no poverty that there was no economic excuse for not abolishing poverty and giving all people what they needed included retirement security.

Keynes was right we had and have the ability we just don’t have the will. Nader sees this as a “failure of corporate capitalism—and the corporate state in Washington, D.C., that feeds and protects it. He points out our workers work harder than out workers in the western world but get less.

Then Nader brings the problem home with pointing out all our expertise in our pastimes, from biking, stamp collecting and chess (he fails to mention professional game watching), but our lack of expertise in the “democratic arts.” He wisely points out the need to watch both government and mega corporations in order to be better and wiser citizens. He quotes the American revolutionaries: “Eternal vigilance is the price of liberty.” He is not talking about the chronic complainers who have been swayed by wealth owned media shock media entertainers who call themselves newscasters. That is just more entertainment and diversion from real issues. This is coupled with a feeling of an inability to make changes and the big guys will get what they want anyway. This is victimology at its worst.

On NPR I heard a piece about the 50^th anniversary of Rachel Carson’s Silent Spring. Her impact upon society, not ready to hear her prophetic message, was and is profound. We need folk like that today. We may even have them but the public may be so apathetic the planet my die before they wake up and pay attention.

Nader is right, we need lots more grassroots groups looking out for the common good; informed citizens who demand and get what is good for the nation from its public servants. Then perhaps our grandchildren we know no poverty.

Tax the Rich: An animated fairy tale.

You've got to see this.

It goes along well with my last blog. 

Tax the rich: An animated fairy tale, is narrated by Ed Asner, with animation by award-winning artist Mike Konopacki, and written and directed by Fred Glass for the California Federation of Teachers.  The 8 minute video shows how we arrived at this moment of poorly funded public services and widening economic inequality. Things go downhill in a happy and prosperous land after the rich decide they don't want to pay taxes anymore. They tell the people that there is no alternative, but the people aren't so sure.  This land bears a startling resemblance to our land.  After you watch this video, click here to share with friends, and send an email to your elected officialsto let them know they need to restore higher federal tax rates on the wealthy so that we may once more enjoy properly funded public services.

A Personal Perspective on Limited Economic History

I was born in 1942, the war years. Following those wars years the economy flourished. The G.I. Bill encouraged veterans to get a better education and thus better economic lives. The New Deal was fresh and still active and people were still united, as folk are during times of war. They were interested in social safety nets for our citizens and building an infrastructure than would benefit industry and individuals alike. Business leaders were also active church members and used those values in their business dealings. (Well, some were unscrupulous bastards who used nasty ways to bilk others out of money with unfair practices which anti-trust legislation eventually tamed.) Half my life the economy was basically sound, there was a strong middle class that increased yearly in economic growth and the country flourished.

Then there are the next 35 years and things changed.

I just started reading Robert Reich’s Beyond Outrage: What has gone wrong with our economy and our democracy and how to fix it. He begins with telling the reader to connect the dots. “The first dot: For three decades almost all the gains from economic growth have gone to the top.” He points out during the 60s & 70s the top 1% got 9 to 10% of our total income; by 2007 that doubled to 23.5% and the wealthiest one-tenth of 1 percent tripled their wealth. It is like the late 19^th century all over again. And during this time wages for average workers have stagnated. “The second dot: The Great Recession was followed by an anemic recovery.” The middle class without increasing money could not buy as much depressing the economy and fell into debt trying to maintain the spending levels, and of course folk we laid off, especially from good jobs. “The third dot: Political power flows to the top.” Though they may not have intended this, the wealthy can give more to political campaigns indebting the elected officials to them. This has spiraled out of control. “The fourth dot: Corporations and the very rich get to pay lower taxes, receive more corporate welfare, and are bound by fewer regulations.” Thus corporations and Wall Street continue to gain more and more political clout. Tax cuts in 2001 and 2003 and extended in 1010 and 2003 saved the richest 1.4 million tax payers (the 1%) more money than the rest of America’s 140.89 taxpayers total income. “the fifth dot: Government budgets are squeezed.” So here come tax cuts to education, infrastructure, police, social workers, etc. “The sixth dot: Average Americans are competing with one another for slices of a shrinking pie.” This forces the middle class to compete with the poor. Instead of banding together we are forced apart, to each his own. “The seventh dot: A meaner and more cynical politics prevails.” All we have to do is look at the last elections to see how this has worked out. As a result in the time when we need to pull together, we have become more polarized, angry and vindictive. Note how folk are blaming the poor and entitlements for our woes rather than the inequality of wealth. Nasty.

Now I think of all those who are half my age or less, those born in 1977 and after. And since we are not very politically or economics astute at birth the date really extends back from that to those born when I was graduated from high school in 1960. Their entire lives have been lived in a time of screwed up economic practices far from the Keynesian demand side economics of my youth and before which grew our economy for all.

Furthermore, I don’t think they have much of sense of economic history of those times of prosperity and growth that took place in our country when the government assumed its role as a guide and provided leadership for the economy. There economic experience is limited to Reaganomics or supply side economics which just plain has not worked for the middle classes much less those in poverty.

The entire country is sliding more to the right while it should be sliding left to work on these economic issues. We need more middle class say to our government rather than the influence of the wealthy. We need to becoming together in unity to work for common economic and social causes rather than fighting each other over vested interests.

Frankly I am worried about our country which seems to be veering away from democracy to plutocracy or oligarchy. I am very worried about the children of those whose parents were born in the last 35 years of poor economic thinking. Their future seems bleak.

Yet, Robert Reich writes about how we can fix it. I hope he is right. I will let you know when I finish his book what his solutions are. Whether we will implement them is another story. In the meantime I am continuing to read Alex Tocqueville’s Democracy in America, and to stay sane, a novel or two.