September 2010 Archives

Dear America,

The major public network broadcasters get their licenses under the condition that they perform service to the public. Of course, the definition of service is sufficiently vague that almost anything can satisfy the requirement, so programming of various kinds is deemed to fill public needs, and thus, the licenses of the three major networks are secure, and essentially unchallengeable. But the news programming on the three major networks in particular is virtually a public utility. Their obligation to inform the public would seem to be at the core of any claim of service they make, just as a system of public education is at the core of our civil liberties. That is because the public need for accurate information about political events is the sine qua non for an effective democracy. Without it the body politic is susceptible to the deceptions of those who would use our political system for personal gain and to the nefarious acquisition of political power. Lack of accurate information is a danger of inestimable measure.

On Tuesday, the Republicans in the Senate refused to cast even one vote in favor of the cloture of debate on a bill that would punitively tax businesses that relocated American jobs to foreign countries, but would reward them for bringing back home jobs already sent abroad. (By the way, there were four Democrats and an independent who joined the Republicans, so we are not talking about just Republicans in the Senate, but about the Republican conservative complex in all its senatorial resplendence.) In these near desperate times of widespread joblessness and hardship, there seems little doubt that such a measure would be of significant benefit to the nation and to perhaps tens of thousands of workers and their families. And the buying power that would be preserved for many American workers and reacquired by many others actually would "trickle down" in the form of wages spent on goods, many of them made in America by American workers put to work by increased demand: the putative Republican recipe for American prosperity, yet they voted it down. That Republican spurning of a measure that seems so inescapably beneficial is news, especially with elections looming, but unless you were listening to public radio that evening, the news probably never reached you.

Certainly some newspapers carried the story the next day, but the fact is that the majority of Americans get their news from radio and television, and in fact there are real questions as to whether news on paper will continue to exist much longer, so dire is the plight of our newspapers generally. Thus, the duty to inform us about that event fell primarily on the network news, the three major networks in particular, but they failed us. On ABC, for example, we were told by Diane Sawyer about "The American Heart," and we heard about what is happening in her home town of Louisville. We heard about the lack of knowledge of religion demonstrated by Americans in general. But we never heard from Diane Sawyer a word about the Republicans obstructing the preservation and restoration of jobs that might salve some of the millions of American hearts broken by the recession that was the legacy of the Bush administration. And neither Katie Couric nor Brian Williams are any better, though neither of them stoops to the level of pandering that Diane Sawyer does as she goes about the task of converting the news to the pap she provided on Good Morning America. She seems to see her role to be the all-American booster, the chauvinistic promoter of home town and country, not the clarion bell tolling the truth-- more Peter Cottontail than Peter Jennings. But that does us no good; that is not public service.

The non-threatening banality of her work is not a balm but a threat to our liberty: it represents the failure of our news media to report on such events as this Rcc obstruction and is the kind of lack of information, in some sense misinformation, on which the wrong kind of politicians thrive. It allows them to divert our votes from our intended purpose, and in consequence we run a profound risk of electing the wrong people for the jobs we want done, regardless of party affiliation. The constituents of the forty five senators who voted against this bill should be aware of the position that their senators took. They should be put in a position to ask those senators what their reasons for voting against the bill were, and then those constituents will then be in a position to decide whether they want their senators to continue to represent them. In this instance, that whole process seems crucial to the soundness of the future we will embark upon in November, one that should be cast by people thinking with their own heads based on facts rather than with someone else's head based on campaign rhetoric and polemical games. But our news media have failed us on this occasion, and perhaps more importantly, they have left open the question of what else they have failed to tell us.

The internet has given us great access to information, much of it unfortunately unreliable and motivated by devious intentions. But still, anything that has been written can be consulted on the internet, and the information we all need is there for us to sift through. But these are busy times for the individual. There is so much to do in the ordinary day that sitting down to cull everything relevant from the virtually infinite data available online is a physical and intellectual impossibility, probably for any and all of us. Put concisely, without vigilant observers and investigators, especially in the political arena, the questions we should be asking are obscured by the shear volume of the information by which we are daily inundated. A case in point is the BP oil spill. When it was actively threatening our wellbeing, Anderson Cooper and CNN were there every day telling us the same things over and over because it was good for ratings, but not really very helpful at all. In fact, the media thirst for spill-related stories became so obvious that I for one stopped watching-- hearing a news man ask a local fisherman how he felt about the spill over and over again came to seem quite pointless, and in light of the fact that shrimp are still being fished out of the Gulf of Mexico, and they are still edible rather than being tainted suggests that, while the story was newsworthy, the reportage quickly went from informative to hyperbolically sentimental, all in the name of advertising dollars, and all too predictably. But the real problem is that when it was over, Cooper was nowhere to be found: no one followed up on the sandbars that Governor Bobby Jindall insisted be built for example. No one has asked on our behalf whether the millions spent did any good at all, and thus whether Jindall was actually interested in the welfare of his people rather than promoting his next bid for elective office. And I'll bet that if Anderson Cooper did ask that question of local politicians down there, some of whom stuck with the federal government effort rather than joining in Jindall's media assault on it, we would all be surprised by the answers, because someone has to pay for those sand bars now, which means that something else doesn't get done. But Anderson Cooper won't be doing that.

So why isn't Anderson Cooper asking those questions now. Why isn't he asking Rcc senators why they voted against keeping American jobs here for us. Why aren't he and Diane Sawyer, Brian Williams and Katie Couric acting as keen eyed observers and investigative reporters rather than chauvinistic shills. We need them to be the former, not the latter. Finding and reporting the news that matters is the job we need them to do. We don't need them to pat us on the collective back and make us feel good about ourselves. Ferreting out the truth and confronting those who would deny it...that is the job we need all of our "newsmen and newswomen" to do. When an Rcc politician says that we need to cut taxes for the rich to stimulate job creation, Diane Sawyer should be asking what he bases that contention on-- what are the mechanics of that principle. Anderson Cooper should be asking why if that principle is sound we lost eight million jobs under the Bush administration while these tax cuts were in effect. Katie Couric should ask how failing to renew a four percent cut for two percent of the population, the richest people in the world, can be that pivotal when it didn't prevent the hemorrhaging of our economy in the first place. Brian Williams should ask when all that wealth is going to start trickling down on the working class that has seen its buying power shrink over the past three decades while the rich have gotten richer. David Brooks should ask just how tax cuts create jobs and what evidence there is for it. That is the job we should demand of our news media, America, and if they won't do it, maybe we should start asking someone else to. There are plenty of people who want to be on television. Look at Bobby Jindall and Mitch McConnell.

Your friend,

Mike

Dear America,

If you have been a reader of these letters recently, you may recall one about two weeks ago in which I raised the issue of jobs being exported from the United States to poorer countries where wages and costs are lower. Specifically, Callaway Golf is closing its golf ball factory in Massachusetts and reopening it in Mexico, thereby exporting not just golf balls but the jobs of those who make them as well, though they will no doubt continue to take advantage of the American market for their products...except for you and me that is. But Calloway is not alone. I thought then and continue to think that the Congress should impose import tariffs or some other tax that would bring the cost of those Mexican made golf balls and other products made by American companies abroad to what their cost would have been if they had been made in Massachusetts or California, or in any other state of the union. One of the major problems we face in these troubled times is the general corporate exportation of jobs at a time when there is a dearth of employment opportunities here. Well, yesterday the Senate tried to act in that regard and once again Mitch McConnell flew the Republican colors so high that this time, everyone must have seen them for what they are.

Yesterday at approximately 11:30 in the morning, the Democrats in the Senate voted on cloture of debate over their bill intended to stop the flow of jobs abroad and actually encourage the return of some that have already gone south...and east and west. The bill would tax businesses that export jobs and relieve them of the payroll tax for jobs they bring back to this country that they have previously relocated abroad. That would be approximately a 7% savings on the cost of each American employee whose job is returned to America after being sent to another country. But the cloture vote failed, and Mitch McConnell called the bill an attempt to curry favor with voters just before the November elections. His remarks were the absolute epitome of absurdity, and if there is anyone who doesn't see that, we are in deep trouble.

You may recall that both McConnell and his House counterpart, John Boehner (McBoehnell) have often complained that the Democrats are ramming their political agenda down the American throat without listening to the plaints of the people. They have claimed that they, the minority, are the true voice of the people and that the people are speaking through them, saying that they don't want universal health care or financial regulation, or campaign reform. And on the basis of that rationale, they have justified their obstruction of every effort to accomplish those ends and many more intended to improve life in America. But by extension of that logic, McConnell must believe that the American people don't want Congress to do anything about the exportation of their jobs at the time when they need them most; it will be tough to sell that notion as a sincere one. And as to his position that a bill keeping jobs in this country is pandering to the people, well so what as long as we keep the jobs on shore-- another tough sell for McBoehnell. Even if this bill is an attempt to pander to the people, why don't the Republicans want to pander to the people too by voting for the bill with the Democrats. That would be a constructive alternative to blocking the bill-- a double victory for them. They could have said that the Democrats had introduced a bill that was good for the American people and that they were going to support it, and thus prove that sheer obstruction is not their only motivation. But we all know that that would be contrary to their strategy, so that is not what happened.

I cannot conceive of any way in which this bill could be controversial in the mind of any one of the 98% deemed by President Obama to be the middle class. And correspondingly, I cannot conceive of any way in which any member of the middle class could see the Republican refusal to support the bill as anything but what it is: pure obstructionism. The Republicans have been firing that bullet at their collective foot repeatedly for months, but that fact has been missed, or even denied by their supporters. However this time we have the smoking gun. The vote against cloture and Mitch McConnell saying something as absurd as that the Republicans won't vote for a good bill because it is an appeal to voters from which they too could benefit should be the evidence that even the staunchest Republican conservative complex (Rcc) member will feel compelled to face and repudiate. The bottom line is this: the Republicans in the Senate have voted against keeping jobs in this country because the Democrats proposed it. They have raised no rational and persuasive objection to the bill. They have refused the opportunity to vote for something that everyone needs. What else could that mean but that the Republicans are interested in one thing and one thing only: sabotaging the Democratic majority's efforts to serve the American people so that they, the Republicans, can retake power. It is not public service that they are about; it is self-service.

So now, the pig is out of the poke and no one who votes Republican will have any excuse for buying it. The cynicism of the Republican strategy, which has been denied for nearly two years, is clear, and it is a present danger. Fortunately, all of us can now see it, and even more fortunately, we have an opportunity in about six weeks to do something about it. All I can say is something I have said many times before. On election day, the majority of the American people get exactly what they deserve. So, make sure you vote, America. See the obvious truth and make sure you vote. Let's get what we deserve.

Your friend,

Mike

Dear America,

There is a report that will be coming out within the next two weeks relating to what has come to be known as the "flash crash." You may remember the day when the stock market-- really the Dow Jones Industrials Average-- dropped a thousand points in about twenty minutes. Fear set in and panic followed, apparently on account of some computerized trading, that is, some sell orders that automatically went to the exchange floor when something triggered them. In other words, the market crashed because the machines that are the modern market thought it was crashing. The report is supposed to be more detailed than the explanations that have been floating around since that day, but it will all come to this: the notion that the stock market reflects the real value of anything is nothing but a self-serving illusion perpetuated by those who can afford it. And what that means is that their wealth is an illusion too. That is the problem with our financial system in a nutshell. That is the pathology of our modern capitalist world. And that is where regulation and policy will be required if we are to reverse the downward spiral that everyone is describing in his own way.

In his column of last Friday, David Brooks looks away from all that and attributes the loss of our status as the model social and economic system in the world to the decline of responsibility in our society, but he throws apples and oranges as well as water mellons into the same basket to make the point that we have fallen because no one is responsible for his actions anymore. He blames the constraints that government has imposed on various kinds of activities-- teachers imposing discipline in the classroom, business regulation, entitlement programs-- along with what he calls a "capricious malpractice system" that could strike at any moment. And he asserts that all of those things are the operatove damper on initiative, discretion and responsibility that are causing our distress. But Brooks, like the Republican conservative complex (Rcc) of which he is a part, albeit an oxymoronically moderate and thoughtful part, is saying in the final analysis that it is the imposition on the rich, the powerful and the majority of a set of base values that protects the minority of us from issue to issue that is impeding our actualization as the society that we should be. Howerver, that argument is only possible because he refuses to acknowledge, much less accept, that it is those very constraints that are what makes us potentially the most admirable nation that ever was.

The financial system did not suffer its most recent collapse because of to many constraints-- because of overregulation. It collapsed because an aberrant philosophy of capitalism took hold in the 1980's and became the conventional wisdom. What has happened to capitalism in the United States is a function of a marketplace that is too free, not one that is not free enough: the abuse of derivatives and mortgages, and a banking system in which it is now legal for entities of various descriptions to gamble the moneys of innocent investors rather than invest them, and make no mistake about it, the derivatives market like many other financial practices is nothing but a glorified crap game. And the reason that we don't have people starving in our streets is not that there are too many entitlement programs; it is that we do have programs like social security and welfare in one form or another. On the other hand, the reason we have two wars in which we are still embroiled in one way or another is not that there have been too many constraints on the power of our executive branch but that those constraints on the executive that our Constitution imposes have been ignored. And the reason that our Democratic Congress and President have been unable to accomplish many of the things that they were elected to accomplish is not that the minority in our government is too constrained; it is that the minority has the power to thwart the majority, to thwart the very will of the people as demonstrated by elections, to ignore the majority of the American people because their petulant political cadre is unable to have its way. And contrary to Mr. Brooks and the Rcc's claim, the escalation of medical costs to astronomical extremes is not a consequence of medical malpractice suits run amok-- which by the way total less than 1% of medical costs in this country, even by Republican estimates as disclosed during the public forum that President Obama held with them on the issue of health insurance reform-- it is a consequence of the burgeoning of medicine as a money making enterprise and its demise as a humanitarian endeavor.

The long and short of it is that government has not overreached. Teachers should not be hitting their students to discipline them, and government rightly prohibits it. Business regulation has not bloated to the point of being an impediment to prosperity. It has just begun to catch up to the perversion of capitalism that is the conflicts of interest permitted by the repeal of the Glass-Steagall Act, speculation and the arbitraging of money, stocks and risk in the modern alchemists' attempt to create wealth out of thin air. The reality is that there is not yet enough control of what is only technically better than nefarious activity. And the risk of medical malpractice suits is one of the primary reasons that medical practitioners are as cautious as they should be; without that risk there would be disfigurement, death and injury beyond out wildest dreams inflicted by the inept and the unqualified run amok. It is time to put aside convenient rationalizations and call things by their right names. Greed is greed; it is not innovation, and it used to be a sin along with pride, sloth and envy. I am not a religious man, but even in a secular world, those things are what will destroy us if we don't control them. And that is what the November elections are about. The issue is not whether tax cuts encourage small business to create jobs. The issue is the legitimacy, and for that matter the real nature of the American Dream.

Your friend,

Mike

Dear America,

It was announced yesterday by the Democratic Party leadership that the tax cuts for 98% of the American people as well as those for the richest 2% will not be scheduled for a vote until after the election in November. Apparently the party leadership has not been reading my letters. They have not been listening to the kind of people with whom The President met in his quasi-town hall meeting, who told him that they don't know where he is going and what he plans for us. They have not been listening to the political commentators on both sides who are either taking advantage of the lack of a pointed Democratic response to the political rhetoric and the small business poppycock of the Republican conservative complex (Rcc) and the Republican Party or are bemoaning it. And I am left to one of two conclusions: either the Democrats have decided to take my sardonic advice that they let the Republicans win so that they can flounder in their attempt to get us out of this mess or they are so afraid of failure in the public arena that they are not even willing to risk it. It's pathetic, and frankly, disheartening.

I have seen so much data and analysis in the press that belies the Rcc subterfuge of feigning to promote small business in the quest for more job creation that it must have been seen by Democratic leadership as well. And in that light, it should be as easy as falling down to make at least a cogent argument that the only motive behind the Rcc's advocacy in favor of small business is to justify putting more money in the pockets of the rich. And if the Democrats brought two tax cut renewal bills to the floor-- one for the 98% and another for the 2%-- the Republicans would have to vote for the former, and they couldn't win on the latter, though they would certainly try. In that event, I can't see how the American people could help seeing whose side the Republicans are on. But the Democratic Party regulars seem reluctant to join the fray, and as a result, it appears that the Republicans are going to win by default when the election comes. Honestly, I can't figure it out.

If I were the chairman of the Democratic National Committee, I would be paying for every candidate to place a prominent ad on television to run once a week at least, pointing out that one of two small businesses fails in its first five years of existence and so half of any jobs they create disappear in short order; that at least 80% of small business owners make less than the $250,000 that is the demarcation point between the middle class and the rich in our taxation scheme, and thus renewing the middle class tax cuts will do for that 80% of small businesses what the Rcc wants anyway; that the top 2% of earners, to the extent that they own small businesses, tend to be sole proprietors like movie actors, lawyers and doctors who do not need the money and generally employ very few people or no one at all; that if those tax cuts are not bestowed upon that top 2%, it will save the nation $700 billion over the course of the next ten years, which should make the Rcc happy as they complain incessantly about the mounting national debt. The Republicans should be easy pickins' so to speak, but no one seems to have the guts to take them on-- and then there is health insurance reform.

Some of the changes it embodies took effect yesterday. Adult children can stay on their parents' policies until they are twenty six, something of special import now when jobs, and especially jobs that provide health insurance, are so difficult for anyone to find, but for those just out of college with no experience in particular. And insurance can no longer be cancelled because someone gets sick, nor can it be terminated when some arbitrary benefit total is exceeded. And children with chronic conditions can no longer be denied insurance either-- all boons to the American people-- but unless they happened to watch the news at just the right moment last night, most of them don't even know that those changes have taken effect. Most of them don't know that they now have protections that the Rcc opposed them getting, but that were brought to them by a Democratic Congress, and a Democratic President in particular.

So, in light of the Democrats' timorousness, there is at least a good chance that the Republican Party will not be just emboldened but will also be empowered in November and the Democrats most recent moment in the sun will be squandered, perhaps even undone before its benefits can be reaped. But I still believe that the Democrats are the party of the people and that the Republican Party is the party of money and business, so I am not giving up. It's just that, since the party has seemingly lost the major part of its resolve, we have to take over as individuals. I for one will talk to anyone who will listen from now until November. I will urge every one of those people to vote, but to first think about the issues, and with their own heads not someone else's. It's up to us now, America. Are you there, America?

Your friend,

Mike

Dear America,

Here in Connecticut, we have what may be the paradigm of senate races for 2010. The Democrat is the current attorney general-- a classic consumer advocate-- and the Republican is a rich business woman who has largely funded her campaign out of personal wealth. Her campaign strategy is the standard for her party: she is for tax cuts and business incentives that she implies will trickle down on all of us and she paints her opponent as a tax advocate who favors the environment over the pocket books of his constituents. The Democrat is also running a classic campaign in the style of his party. He is squeaky clean, even in his political ads, and is only now responding to his opponents claims, and not very aggressively at that.

Linda McMahon is the wife of Vince McMahon, whose name would only be familiar to you if you happen to be a fan of professional wrestling. McMahon is the patriarch of the first large-scale wrestling circuit and Linda was the CEO of his company. She made millions for herself in that capacity, and as such is the case, she is linked to the enterprise including its absurdity, steroid use and overt fakery. But Dick Blumenthal, who has been Connecticut's attorney general for decades, has said not a word about the credibility of a woman who made her living out of presenting to the public only the pretense of a sport. And now, McMahon is airing ads accusing Blumenthal of advocating environmental reforms that will add, she says, over $950 to the average electric bill and $.68 to the price of every gallon of gas. Blumenthal's response: virtually nothing. His response ad makes the blanket assertion that she is misrepresenting the facts and it points out that she got rich from her business at the expense of her employees-- nothing said about the failure of supply side tax reduction doctrine to produce universal prosperity, and very little about the probity or integrity of the woman who was the face of professional wrestling in the management sense. The Connecticut campaign demonstrates what is lacking from the standard Democratic demeanor: vigorous advocacy of a reasoned position contrary to that of the opponents, and given what is now being said by experts about tax cuts and small business in particular, it should be easy to formulate. But inexplicably, it has not been forthcoming.

In the New York Times over the course of recent weeks, several articles have appeared addressing the stock Republican refrain that tax cuts for the rich will stimulate small business, which in turn will produce some substantial percentage of new jobs according to the Republican conservative complex (Rcc). Those articles, rife with references to authorities like the Congressional Budget Office and economists of various stripes, make the point that poverty has risen among the American people at an alarming rate during the "supply side era" as I would call it. They also make it clear statistically that small business is not the salvation that conservative policy posits it to be, and that tax cuts that favor them and their owners- largely that 2% at the top of the economic pyramid-- serve to enrich those who get them, but then go no further into the economy than their bank accounts. And as it turns out, small business produces no more jobs than big business anyway for several reasons. First, half of them fail within the first five years of their existence. Second, once established, their work forces stabilize and they grow at no faster a pace than those of businesses of more substantial size. Then, there is the fact that most of those businesses are structured to avoid taxes on business organizations, and the vast majority of their owners are thus among the 98% of Americans who are going to get tax cuts regardless of what happens to the top 2%. In fact, the Congressional Budget Office-- which is non-partisan by the way-- analyzed the effects of tax cuts among other economic stimulation tactics and of the eleven it reviewed, tax cuts came in eleventh in terms of the economic return for the dollars spent on them. The most effective stimulants it turns out are those that promote new business formation, and tax cuts have nothing to do with that because income from new businesses is usually meager if it exists at all. But none of this is a topic of discussion in the ads of Democrats running to preserve their hegemony in Congressional politics.

I am no politician, and I claim no expertise in the area of campaigning for office. But I find myself continually asking why I am aware of these empirically substantiated arguments against the Republican mantra only because I read and listen to the news. I am perpetually bemused by the success of Republicans in besmirching their Democratic foes on a personal level and the lack of response from the Democrats, though I would not be happy to see the Democratic Party stoop to that level-- there is no need. The Democrats have economics, and more importantly common sense on their side, but they seem unable to find a way to use them, and that is at least in some part attributable to the fact that they, like the Rcc, refuse to let supply side economics go. The President still advocates loans for dubious businesses as a stimulant. And while he is now pushing for what his administration is calling an "infrastructure bank," which frankly mystifies me as a concept in that it is intended to meld private and public resources into a financial engine for infrastructure development, the larger infrastructure related projects and programs that we both need and have seen before in an era when depression sapped the strength of our nation seem to be out of reach with the Democratic Party saying very little about it.

If I could talk to President Obama, I would say only this. It is time for a speech to the American people in which all of the dubious rationalizations for augmenting the wealth of the richest among us are exposed for what they are. It would take no longer than it has taken you to read this letter, and then, the Rcc would have some explaining to do. But I'm not counting on that happening. Someone should remind the leaders of the party that the expression is not "the gloves are on!" It's...well, you know.

Your friend,

Mike

Dear America,

Even though we are six weeks from the November elections, they are in a sense passé already. The volume of what has been written about the Republican Party, the Republican conservative complex's (Rcc) impact on the elections-- the Tea Party movement in particular-- popular dissatisfaction with the progress that Washington has made in addressing our problems, the national debt and the national deficit, the wars that continue to plague us and the future of the country in the near and long term that even the legendary monkey that would eventually type out the full works of Shakespeare given enough time to do so would have written everything that has been written about our politics by now. Still, I am not bored by the panoply of perspectives on all of it-- but I am both perplexed and frustrated by what seems to me to be the failure of our populace at large to recognize what to me are the obvious truths.

It is clear that the statistics on our wellbeing as a nation do not reach all of us, and even when they do, they are an overwhelming welter of information fraught with complexity and technicality. But that being said, the effect that many of them have on the great mass of the American people must of necessity be apparent to them. For example, the Census Bureau has reported that poverty is at the highest level it has reached in fifteen years: mostly Republican years. Fully 44 million Americans-- one in seven of us-- lived below the poverty line in 2009, and the fastest falling of us are the children. 14.3% of our population are poor, and I would think that the Democratic Party could count on every one of their votes. At the same time, one tenth of one percent of earning families, 13,000 of them, earn 11% of the total income of the nation-- more than one hundred times their proportionate share. And then comes the Republican Party demanding that the tax reductions that favor the top 2% of earners in the country be continued or they will not support the tax reductions for the bottom 98%, which is profoundly reflective of the Republican philosophy in light of the fact that those 2% earn 28% of the nations income-- more than fourteen times their proportionate share. And then there is the fact that those tax reductions for the top 2% will cost $700 billion over the next ten years during which the Republicans complain that the national debt will go up by $3 trillion. In other words, they want to reduce social security benefits and thus require close-to-the-bone sacrifice by retirees in order to net perhaps a few hundred billion dollars, but they will give the rich two or three times that without any sacrifice on their part at all, all this while American business is awash in cash though it continues to ship jobs that our people need overseas.

And of course there is the non-statistical information we all get every day. The Tea Party movement was upset by the Obama administration's and the Democratic Congress's efforts to ensure that every American has health insurance, claiming that their rights were somehow being infringed. They believed in Palin's death panels and the like, even though the death panel scare was immediately debunked as a myth perpetuated by a vapid demagogue and the health insurance reform plan as a whole will reduce the deficit, and hence the debt, by hundreds of billions of dollars. The Tea Party rank and file pound their chests and proclaim their righteousness, all of them worshipping at the throne of Glenn Beck who claims to be restoring honor, but none of them question the honor in trying to deny their neighbors the right not to die just because they cannot afford an available cure. Perhaps Palin was right. Perhaps the Tea Party is the death panel to which she referred.

With all of that, which should stimulate seventy or eighty million ardent supporters to go to the polls, it appears that the Republicans are poised to retake power in the Congress in 2010, and perhaps the Whitehouse in 2012. And that perplexing reality is the foundation of what I think should be the new policy of the Obama administration and the Democrats in Congress. They have told the people everything they need to know in order to see who has their welfare in mind. The implications of the Bush presidency and the Republican hegemony in American politics are abundantly clear. And at least the President, if not virtually all Democratic politicians have counseled patience while they work to get us out of an economic mire that it took thirty years of "Reaganomics" to get us into. But the public seems unwilling to give them even these past two years to rectify the situation. So the President and the Democratic Congress should just lay it on the line and let the chips fall where they may. The President has been mouthing the truths, but he should excoriate the opposition with it, and so should every Democratic candidate. There should be no more deference to decorum, and there should be no more constraint. They should raise their voices in righteous indignation and point their fingers at the opposition, even if it results in losses at the polls, and if that turns out to be the case, let the people have what they want. Because if the Democrats stave off the Republican onslaught this time and continue in the majority, they will face the same harangue about taxes, the debt and federal power in 2012-- that is because even ten years may not be enough to turn the worm. The new Democratic strategy should be to yield if that is what the people want-- and then ask them in two years what they have gained. It's a no lose situation because if the Republicans succeed, that is good for all of us. But in the much more likely event that they will only concentrate wealth even further in the hands of the American plutocracy and thus dig our collective financial hole deeper, they will be unable to deny the truth, and then the task of systematically changing our economy can begin in earnest. This may be the battle that must be lost if you, America, are to win the war.

Your friend,

Mike

Dear America,

As the November elections get closer and all of the participants begin making offers that they think the electorate will not be able to refuse, some commentators, both on the process and on the state of our affairs as well, are looking beyond electoral politics toward the actual state of capitalism in America. I must admit that I have been drawn to that course myself, and what I think I see is daunting, not just for the election but for our future...our foreseeable future. For nearly a century, the struggle between the geo-political poles has been between communism and capitalism, and to a large extent, communism has yielded to the realization that for human beings at our current level of evolution, the individual profit motive is perhaps the only reliable impetus for progress toward a bountiful future for the species as a whole. And here in the West, there has been a corresponding gradual crawl toward the socialistic principles that ensure the welfare of the great majority who are handicapped in their effort to ensure their own welfare. But while communism continues to develop its receptivity to capitalistic ideas, capitalism is demonstrating a resilient resistance to the collectivist ideals that put the common weal ahead of individual prosperity in the communist model and that may be our downfall.

In the United States in particular, the driving forces in our society, or at least the ones that seem most likely to prevail at this time, seem more and more to be the steadfast advocates of various kinds of absolutism in morality, economics and politics who refuse compromise, condemning flexibility as a prospect that will sully us all, even those who advocate for it. The religious right, the Republican conservative complex (Rcc), the plutocracy all regard the positions they take on the issues that define our present and will dictate our future to be positivistic, immutable truths that must prevail in toto. But as the growth of the Chinese economy and the near fall of our capitalistic empire demonstrate, such rigid doctrinaire thinking does not always lead to the best result..

For example, with regard to usury, since the '70s in the case of our Supreme Court and the '80s in the case of the U.S. Congress, defining interest rates at any level as usurious and therefore prohibited has been made essentially impossible for the states of our union, which until that time all had their own codified limitations of credit practices. Now however, as most of you know, a credit card company can charge almost any interest rate it wants and can impose fees of whatever size for "services" like overdraft protection, which is really lending you money to cover an amount you have charged beyond what limit was promised you. But nothing is produced by the charging of interest except more wealth for those who already have enough that they can afford to lend it. In essence then, money is being taken out of the system of commerce without the creation of a corresponding amount of goods and services. That may be why in the history of religions of all kinds there has always been a usury prohibition, in some cases lasting even to this day. That is also why usury was a criminal enterprise before the federal government intervened in the name of promoting commerce, and why every state had limits on what interest could be legally charged. Those who charged more were known as loan sharks. I'm sure you have all heard the term. So something that has been abhorrent since it was first known has become legal in our economic system as it is perceived to induce the production of wealth whereas what it does best is move wealth from those who are in need to those who already have it. Yet our political climate fosters the practice and justifies it as a commercial necessity and renders it an end in itself: an industry whose time has come.

And then there is speculation, which is not only legal but is actually institutionalized in our economic system. Our system of enterprise financing through the selling of stakes in those enterprises, in other words the stock markets, started out being solely for that purpose, but as the process became formalized, it became increasingly an end in itself, deracinated from its original purpose and dedicated only to the proliferation of wealth rather than to its original function of promoting entrepreneurship, innovation, and business in general. Now, people can purchase options to buy and sell stocks on a formal exchange, the Chicago Board of Options Exchange, without ever investing in the company itself. They can sell short, meaning that they can sell stock they don't own, thus effectively applying downward pressure on the price of the stock in question, which if sufficiently copious can be a self-fulfilling prophecy: another industry that is productive of nothing and has become an end in itself that is part off our financial system.

And then of course there are derivatives, which are packages of financial obligations and insurance policies on the solvency of others, among other things, which were the quintessence of the problem that brought us to the low at which we find ourselves today. They are nothing more than bets and hedges on bets as to the futures of others.

Now, add to those practices that collectively constitute our "financial system" but that add nothing of the total product of our society, things like the Tea Party Movement opposing the notion that, while it is alright for state governments to require all motorists to be insured, it is not alright for the federal government to require all bodies to be insured, thus assuring that no one will die just because he doesn't have enough money for the thing that will cure him. Add the Rcc demand that if all those in the middle class are going to get tax cuts, the richest among us must have them too. And add the practice of giving tax breaks to multi-billion dollar companies so as to encourage them to do what would be in their best interest anyway as it would make them more profits, like oil exploration and research and development. Throw in the now generally accepted economic dogma that wealth must be subsidized and facilitated in the rich because it will benefit all of us through their largess, which by the way there has been scant evidence of that I have seen: the concentration of wealth in the top earning 2% has continued to escalate to the point that they now take 28% of our national earnings. And add as well all the things that so many of us experience as inequities in our system and you now have a picture of a system that, unlike Chinese communism for example, has taken its core principles too far and become too rigid in adhering to them for the benefit of too few.

Let me be clear. I do not believe that Chinese communism is a system preferable to our own, nor do I believe that profit as an incentive is inherently wrong-- quite the contrary. I am all in favor of rewarding those who invent, create and cure for the benefit of us all, and even if their motive is just to get rich. Without the prospect of profit, we human beings are as yet insufficiently evolved that we can expect of ourselves that we will seek to advance our knowledge and capabilities solely out of altruism and magnanimity, and I include myself when I make this observation. Capitalistic enterprise is as I see it the only way in which our species can advance. But it seems to me that it is time that we begin to examine that limitation in ourselves for the sake of finding a way to modify it. And we here in this country are in the best position in the world to do so. Our problem as a nation from this point forward will not be joblessness or lack of infrastructure investment. It will not be taxes that are too high or programs that are too expensive. To paraphrase the immortal bard, the problem my fellow Americans is not in our politics. It is in ourselves. But politics is the way to change it all.

Your friend,

Mike

Dear America,

Most Sunday mornings, the network political talk shows produce at least one story for the coming week. This week, however, they produced only half of one. John Boehner appeared on the CBS program "Face the Nation" and said categorically that he would support extending the Bush tax cuts to earners of less than $250,000 per year-- 98% of earners-- without the renewal of the tax cuts for the highest earning 2% if he had to. With the Republican Party once again loaded for foot, he appeared to be saving them from the ignominy of blatantly favoring the rich at the expense of the rest of us. But wait. There is still time for that ignominy to come home to roost.

On Monday, the other half of McBoehnell cocked the Republican foot shooting pistol one more time, and took careful aim. Without specifically rebuking the other half of the McBoehnell portmanteau, Mitch McConnell rejected the notion that only part of the Bush tax cuts could be renewed, rationalizing the same way that he has thus far in the past by implying that the richest 2% of our nation are the driving force behind our economy rather than the other 98% who make the goods, perform the services and pay for most of them by far. Despite the recent research I referred to on Monday that says that small business doesn't produce more jobs than any other sector of the economy, he claimed that leaving out the top earners would exclude a lot of small business earners, and thus thwart the effort to create more jobs. And once McConnell, the senior business shill in Washington, stated the party line, other House leaders knew what their marching orders were and they began to mobilize...against Boehner. Eric Cantor, who showed his true colors when the tea party episode involving racial epithets erupted, showed his colors again. You may remember Cantor defending the tea partiers by falsely claiming that a stray bullet fired into the air at some nearby celebration had been aimed at his office and contriving the claim that the stray bullet was a threat directed at him, trying to suggest that there are vile people on both sides of the health care reform issue. Now, he is vowing to do everything in his power to prevent middle class tax cuts if the upper class doesn't get its tax cuts too. Then another Republican House leader, Mike Pence from Indiana, leapt to the call of his leaders and joined Cantor in his Quixotic quest to serve in the plutocrats' cause. Bang...the Republican foot took one more for the team.

I must say that an instinct stirred in me-- one suggestive of the obstructionism displayed by the Republicans for the past two years-- when Boehner took a rational position on the tax cuts for the richest people on earth: I thought that he was driving the last nail in the coffin of the Democratic Congress by being reasonable. I was daunted by the sudden prudence of the Republican leadership, and frankly, I was concerned that it would spread, but not to worry, Mitch McConnell has saved the day. The rest of the Republicans, dedicated to staying in ranks for fear that some hammer-like consequence will befall them if they don't, have joined the fray on the wrong side of the issue, and either Boehner or McConnell and the rest of the Republican Party will emerge from this battle bloodied, and as to McBoehnell, divided. This is the first chink in the Republican armor, and if Republican human nature prevails, it won't be the last. One possibility is that a sufficient number of Republicans will abandon, even if only briefly, their dogmatic insistence on an overtly doubtful policy supporting the wealthy as the salvation of us all and instead vote for middle class tax cuts, thereby deeply undermining the thus-far unchallenged leadership of Mitch McConnell. The only other alternative is that they will cast Boehner out to sea on an ice floe to be eaten by the opposition by remaining stalwart in a necessarily unpopular position that takes money out of 98% of the American people's pockets. But either way, neither McConnell nor Boehner will accept his fate quietly, and the result may be that the scorpions start stinging each other. And if the Democrats are smart, they will see to it that the stinging starts within the first week of their return to business. Let the internecine carnage begin-- and just in the nick of time too.

Your friend,

Mike

Dear America,

The political establishment is desperate for two things. In the case of the Democrats, they recognize that they need to make something happen between now and November in order to maintain their hegemony in American politics, marginal as that power has become. The Republicans on the other hand need to make sure that no such thing happens, and they have concluded that for the most part, all they have to do is sit and watch and they will succeed, perhaps even wresting that hegemony from the Democratic Party. The irony in their respective mutually antithetical chosen courses is that they both seem to be barking at the same moon: small business financing.

McBoehnell (McConnell and Boehner) have belched forth the same litany at every opportunity. Over and over again they both insist that tax relief for small business is the key to our recovery from the near-depression that their policies put us into. Recently, I heard Boehner take a more openly tendentious course and assert that the Democratic plan to renew the Bush tax cuts for the middle class-- that is all those 98% of the American workforce who earn less than $250,000-- but not to renew those for the top 2% would be detrimental to our economic recovery because many of those in that top 2% are small business owners. Of course President Obama retorted in the name of his party that each of those in the top 2% would reap an average tax savings of $100,000 if their cuts are renewed, and if anyone doesn't need such a tax break, it is them. But at the same time, The President is pushing a package of measures intended to aid small business with tax cuts and more available financing based on the same predicate that Boehner relies upon: small business is the engine that drives the economy and creates two thirds of all new jobs. I have said before that I see that position as counterintuitive and I have made my reasons clear, specifically that the only jobs that will help us out of our economic doldrums are new jobs, and they are created only by increased demand and the creation of new enterprises, usually requiring risky loans lacking collateral to secure them or initial public offerings (IPO's) in the stock market, the latter being the only truly capitalistic investment in my opinion. I believe that tax advantages for those who invest in IPO's are justified, but more loans to people who can't pay them back, whether mortgages or business loans, make no sense. I still feel that way, but now I know that I am not alone.

In the New York Times yesterday there appeared an article about some research that was done regarding the issue of the number of jobs created by small business and the mechanism of that creation. As it turns out, my intuition was correct in that it is not small business in particular that creates any significantly greater proportion of new jobs than does big business. To quote the Times article, "'Size plays virtually no role,' says John C. Haltiwanger, a co-author of the study and an economist at the University of Maryland. 'It's all age-- start-ups are where the job-creation action really occurs.'" Unfortunately, the study also finds that start-ups destroy many jobs as well in that 50% of them fail within five years, meaning that if plans to lend money to such new enterprises-- not IPO's but direct loans-- become law, 50% of that money will be lost within five years thus increasing the deficit and the debt, not reducing them. Even the notion that giving such fledgling operations tax breaks will enhance their potential as job creators appears to be wrong. Statistically, such companies do not tend to make much money, if any, during the first five years, and taxes are therefore a marginal issue if a concern at all.

The author of the article did some anecdotal research by talking to the executives and founders of several new ventures less than five years old or about that age and there was consensus among them that marginal tax rates, that is the rate at which income in the next tax bracket will be taxed, have virtually no impact on the willingness of "angels" to invest their money. He pointed specifically to the fact that Apple and Microsoft were started at a time when the top tax rate was not the 39.6% to which it will return from the 35% that prevailed when the Bush tax cuts were enacted, but rather was 70%. And if you think about it, the idea that an increase in the top tax rate will stifle investment is absurd to begin with. It requires reliance on the proposition that the wealthy with money to invest would rather make nothing on their cash than more than 60% of their gains after taxes. I believe that the rich are often vapid and venal, but no one is that much of a fool. The recently increased rate at which mergers and acquisitions are infusing smaller companies with capital proves the point: entrepreneurial investment is alive and well, and taxes have nothing to do with it.  If investment occurred when the top tax rate was 70%, it will surely occur when it is only 39.6%, so the tax incentive argument is not just intuitively dubious, it is outright absurd, which brings me back to where I started: the moon at which both the Republicans and the Democrats are both barking.

A plan to give away social security trust funds to small business will do nothing to spur employment. Only demand from consumers will make businesses hire new workers, and if that demand is there, they will need no encouragement. Increased profit will be the only incentive they need, which entails selling more goods and thus hiring more people to make more goods. That is how our economy will grow, with or without hand outs from government. All that such government largess will do is increase the debt, and it will do so all because of dogma that no one has questioned...until now. Small business is not the engine of job creation. New business is, and new business is risky business. We have to face it, America. It is not business that will bring us back. It is demand for what it produces. So, when you go to vote in November, consider carefully before you vote for a candidate who says that he stands for boosting small business because that is where the jobs are. As it turns out, that bit of conventional wisdom isn't wisdom at all.

Your friend,

Mike

Dear America,

When I was in college, I learned an expression, the meaning of which was understood, but exactly why the expression means what it does I cannot say. When there was what today is called a sea change in a situation-- when prospects were suddenly reversed-- we used to say that the worm had turned. I have read different attributions of the phrase, most of them giving credit to Shakespeare, but in many there are explanations that make it a commonality even when Shakespeare first used it. Some explain that the worm turns and so is stepped on, thus analogizing the one in power with the worm. One I read goes to the effect that "worm" was a common word that meant dragon in medieval speech, and in the context of the belief that dragons flew from place to place burning what was in their paths, the worm turning was the good fortune of the poor serfs that were in its path. But the explanation doesn't matter; apparently everyone knows that when the worm turns, what goes with him is the loss by someone of the upper hand.

Today, it was announced that first time jobless applications for unemployment compensation decreased for the second or third week in a row. At the same time, it was announced that our trade deficit with the other nations of the world improved substantially, which is a reversal of a deleterious trend that had prevailed almost uninterrupted for as long as I can remember. But not all of the news was good for everyone. In the New York Times a couple of days ago, there was an article about a young software engineer-- actually the article wasn't about her but was more an account of what was happening to her-- who was sending her resume out in reams to no avail. She had been laid off from her last job when the company for which she worked, International Gaming Technology, told her that it was shipping her job abroad to where the market for what she was doing was located. But soon, it shipped all of the jobs over there, not just across borders, but across oceans as well. Profits may well have been soaring, but presumably they were even greater once the company didn't have to pay a living American wage anymore. Of course, The Times' account is not necessarily accurate, but there is no way to check as the company declined to respond when the reporter made inquiry. And what appears to have been that company's management decision was not anomalous in the digitally related industries. Apparently IBM has shipped large numbers of jobs abroad-- Big Blue, the savior of us all. And as any software writer or hardware engineer can tell you, that is the state of the digitally oriented industries today. There is lots of money in corporate coffers, but the company's insist on making more by using cheaper labor abroad, ironically at least in part creating the situation we are in now: taking the jobs of the people who were buying the industry's products in this country thus shriveling up the domestic market and requiring the companies to compete abroad. More goods from here to export because no one on our shores can afford them, hence a positive effect on our trade deficit.

And there was also news about health care-- nothing new really. It seems that statisticians have now quantified the extent to which people use the emergency room as if it were the office of a primary care physician. The statistics themselves were not surprising, even though they demonstrated that the problem is pervasive...in fact, it's huge. What was interesting was the observation that provisions of health insurance reform related to the training of new doctors in the field of internal medicine, the creation of community health centers and creating incentives to doctors to perform basic health care services by increasing the fees that are authorized under federal programs like Medicare will all work to alleviate the problem to the extent that they are large enough. In general, the study says, the reforms embodied by the law will have the effect of bringing costs and inefficiencies down in health care while improving the quality of care the system delivers with, I presume, all of the implied ancillary benefits that such an improvement precipitates: less time missed from work, fewer health care problems in consequence of early diagnosis and preventive care and more efficient use of medical personnel's time.

So, it appears that we may be hitting some kind of a transition point right now. And if that transition becomes more and more evident, political fortunes will shift. The Republican conservative complex (Rcc) may have to reevaluate its opposition to health insurance and health care reform. The Republicans may have to choose a new way to criticize their Democratic counterparts in Congress, and good luck to them if all they can think of is to criticize the Democrats' position that the only tax cuts that should be allowed to expire are those for the two 2% in our economically stratified society. All it will take is a few more pieces of good news, and the dragon may begin to fly in another direction: right over McBoehnell's house maybe. As the saying goes, the worm may be turning, America, and there are still almost two months until election time.

Your friend,

Mike

Dear America,

The health of American business has become the holy grail of economics in this country. In order to assure the prosperity of the American people, the American people must make sacrifices so that American business can be prosperous, goes the modern mantra. After all, business creates jobs, and we all need jobs, don't we? Of course we do, except of course for those who have inherited wealth or become hedge fund managers. Of course we do...but wait a minute. Doesn't business need us as much as we need it? Don't those who capitalize and own businesses need us to work in their factories and offices-- to produce the goods they sell and perform the services from which they profit? Isn't our relationship with business symbiotic, that is, isn't one hand supposed to wash the other to the benefit of both? I'm asking because it feels like the business hand is getting washed, but ours isn't, and that doesn't seem fair. After all, while there may be no jobs without business owners, there are no businesses without workers.

To put my point concisely, it is hard to tell whether the dog is wagging the tail or the tail is wagging the dog these days in capitalist economic theory. The Republican conservative complex (Rcc) continues to wring its collective hands over the state of business-- which incidentally seems to be rolling in dough right now-- and to insist that we forego government creation of jobs in favor of cutting business taxes so that business will create them. But no one explains how putting more money in the hands of businessmen will induce them to do something that they haven't done with the money they already have. I keep wondering how that economic mechanism works, and as I do so, I always come back to the same conclusion. It doesn't. But I do have an idea or two that I think will work, and they all start from the premise that business is the tail, and we, America, the American workers are the dog. Let's start with this one.

I wrote to you a couple of days ago to point out the fact that Callaway Golf is closing a Massachusetts plant at which it manufactures golf balls and is sending all of its jobs, a few hundred at least, down to Mexico. Callaway bought the golf ball factory from someone else years ago, and now, the company wants to walk away from it. Callaway is a publicly traded company whose stock symbol is ELY, for Ely Callaway, and it is a multi-billion dollar company at that. The savings from moving the plant to Mexico apparently amounts to about $12 million. And the story of Callaway Golf is an American success story; in other words, it was Americans who produced all of that wealth, some of which is now moving to Mexico. So, I think we should seek to create some symmetry in cases like that. I am willing to bet that the largest market for Callaway golf balls, clubs and accoutrements is the United States, where at least some of the golf balls are being made for the time being. Thus, it seems reasonable to me that any golf ball produced in Mexico for Callaway now be considered an import, and be taxed as such upon entry into this country. And the tax on those golf balls, the tariff, should be exactly the amount saved by Callaway when it had Mexicans make them instead of Americans.

At first blush that may seem like spite, but it isn't. Somehow, we must find a way to stop the wealth produced by American workers from being siphoned out of the economy, and not just by the relocation of jobs to foreign shores. As I have said ad nauseum, there is a drain on our economy from the upper levels of it that is creating a burden, which we are calling the recession right now, that the working people of the country must bear. There is speculation, inheritance of obscene amounts of wealth, corporate tax breaks, excessive executive compensation, and much more that all has to be paid for from someone's pocket, and the fact that ultimately that pocket belongs to the worker has been too long ignored. All of those things should be addressed in one way or another, but this golf ball thing is right here in front of us now.

So, as President Obama goes out now to campaign for his new effort to assist businesses by giving them more tax relief, this time including a tax credit for research and development costs even though they are the ones who will benefit from it, we should let him know that there are some good ways to keep the jobs we have, and we want to start there. Whether we spur the creation of more jobs or not, keeping the jobs we have should come before we try to bribe businesses to do what is good for them by paying them to create more. I say we start with golf balls, and that is a subject that I am willing to bet ninety five percent of politicians will understand. All we have to do is go out and find them to tell them what we want. We should probably start at the golf course.

Your friend,

Mike

Dear America,

The health of American business has become the holy grail of economics in this country. In order to assure the prosperity of the American people, the American people must make sacrifices so that American business can be prosperous, goes the modern mantra. After all, business creates jobs, and we all need jobs, don't we? Of course we do, except of course for those who have inherited wealth or become hedge fund managers. Of course we do...but wait a minute. Doesn't business need us as much as we need it? Don't those who capitalize and own businesses need us to work in their factories and offices-- to produce the goods they sell and perform the services from which they profit? Isn't our relationship with business symbiotic, that is, isn't one hand supposed to wash the other to the benefit of both? I'm asking because it feels like the business hand is getting washed, but ours isn't, and that doesn't seem fair. After all, while there may be no jobs without business owners, there are no businesses without workers.

To put my point concisely, it is hard to tell whether the dog is wagging the tail or the tail is wagging the dog these days in capitalist economic theory. The Republican conservative complex (Rcc) continues to wring its collective hands over the state of business-- which incidentally seems to be rolling in dough right now-- and to insist that we forego government creation of jobs in favor of cutting business taxes so that business will create them. But no one explains how putting more money in the hands of businessmen will induce them to do something that they haven't done with the money they already have. I keep wondering how that economic mechanism works, and as I do so, I always come back to the same conclusion. It doesn't. But I do have an idea or two that I think will work, and they all start from the premise that business is the tail, and we, America, the American workers are the dog. Let's start with this one.

I wrote to you a couple of days ago to point out the fact that Callaway Golf is closing a Massachusetts plant at which it manufactures golf balls and is sending all of its jobs, a few hundred at least, down to Mexico. Callaway bought the golf ball factory from someone else years ago, and now, the company wants to walk away from it. Callaway is a publicly traded company whose stock symbol is ELY, for Ely Callaway, and it is a multi-billion dollar company at that. The savings from moving the plant to Mexico apparently amounts to about $12 million. And the story of Callaway Golf is an American success story; in other words, it was Americans who produced all of that wealth, some of which is now moving to Mexico. So, I think we should seek to create some symmetry in cases like that. I am willing to bet that the largest market for Callaway golf balls, clubs and accoutrements is the United States, where at least some of the golf balls are being made for the time being. Thus, it seems reasonable to me that any golf ball produced in Mexico for Callaway now be considered an import, and be taxed as such upon entry into this country. And the tax on those golf balls, the tariff, should be exactly the amount saved by Callaway when it had Mexicans make them instead of Americans.

At first blush that may seem like spite, but it isn't. Somehow, we must find a way to stop the wealth produced by American workers from being siphoned out of the economy, and not just by the relocation of jobs to foreign shores. As I have said ad nauseum, there is a drain on our economy from the upper levels of it that is creating a burden, which we are calling the recession right now, that the working people of the country must bear. There is speculation, inheritance of obscene amounts of wealth, corporate tax breaks, excessive executive compensation, and much more that all has to be paid for from someone's pocket, and the fact that ultimately that pocket belongs to the worker has been too long ignored. All of those things should be addressed in one way or another, but this golf ball thing is right here in front of us now.

So, as President Obama goes out now to campaign for his new effort to assist businesses by giving them more tax relief, this time including a tax credit for research and development costs even though they are the ones who will benefit from it, we should let him know that there are some good ways to keep the jobs we have, and we want to start there. Whether we spur the creation of more jobs or not, keeping the jobs we have should come before we try to bribe businesses to do what is good for them by paying them to create more. I say we start with golf balls, and that is a subject that I am willing to bet ninety five percent of politicians will understand. All we have to do is go out and find them to tell them what we want. We should probably start at the golf course.

Your friend,

Mike

Dear America,

Friday's New York Times included two diametrically opposed views of how the economy should have been handled from two columnists whom I respect highly, demonstrating the point that there is such a thing as honest disagreement in American politics-- not in partisan politics, but in American politics. The two columnists were David Brooks, whom I have mentioned many times, and Paul Krugman, an economist and journalist whom I have also come to regard highly, primarily because he does not treat his discipline like it was the Rosetta Stone but rather explains what he thinks and why he thinks it in the apparent belief that any rational person reading what he writes can understand it. For the sake of clarity, Brooks is a conservative after a moderate fashion, and Krugman is a Keynesian, which means at this juncture in American politics that he is a Democrat cum liberal.

Brooks, for his part, imagines what he believes would have been the prudent course for the Obama administration to take from the beginning. His Panglossian fantasy is that The President is the voice of what Brooks feels is reason at the beginning of his administration and declines to take his advisor's advice to use the New Deal model of how to get out of a recession as deep as the one he inherited. In Brooks best of all possible presidencies, President Obama eschews the temptation to borrow money to spend on government programs that he hopes will create jobs and instead concentrates on tax cuts, in particular a cut in payroll taxes, which inures to the benefit of employers in that they would no longer pay their share of at least some workers' Social Security contributions (Brooks seems unconcerned in this scenario that such cuts would only serve to bring the Social Security trust to a zero balance that much sooner). And as to the infrastructure programs intended to precipitate jobs, the President would have created, apparently out of thin air, what Brooks calls an "infrastructure bank" that would manage the funding of the highway and bridge programs that our country's infrastructure so desperately needs. Presumably the funding of the bank would be left to the infrastructure fairy since Mr. Brooks seems to think that The President could create it unilaterally and without affecting the deficit. In short, Mr. Brooks thinks that The President should have created the funding for the highway projects we have been seeing for the past year or so in some way that circumvents the Republican obstruction that plagues us all and without increasing the deficit while giving business and industry more money than they already have in the hope that they will hire people.

Mr. Krugman, on the other hand, puts the case that the stimulus package that was ultimately passed by the Democratic Congress was properly directed but too small-- a view shared by many economists by the way, and shared by them from the beginning, based on their observations derived from the way in which the Japanese handled their economic crisis of the '90's in which they took less than full measures to government-fund job growth. Mr. Krugman's position is that the initial stimulus should have been at least twice what it was and probably more like three times given the numbers he uses in his model of our economic failure. And he expresses the hope that Mr. Obama will seek more of what he has already gotten, but also he acknowledges that even if the President does so, the Republicans will never allow it. Put concisely, Mr. Krugman states flatly that the Republican ascent to power again will succeed because they will prevent the Democrats from doing what is necessary using the national debt as a shield, and that as a consequence, we will have to live with our hard times that much longer.

I suppose that in some way they are both right, even though their views seem to be almost entirely mutually exclusive. However Brooks' fantasy would have been an impossibility from the start. His fantasy bank is just that-- a fantasy, but it would be ideal as it would do what needs to be done without costing anything. And the secondary gain would double the benefit as the United States spends something like 2.5% of GDP on infrastructure, which is in such a deteriorated state as to be a liability for our economy both now and in the future while India spends more than twice that and China five or six multiples of our expenditures in terms of its GDP, which is now second in the world only to ours. An infrastructure bank sounds great. And Krugman's view that infrastructure spending is a sine qua non for recovery is essentially in accord in that he seems oblivious to the fact that adding another two trillion to our existing crushing debt isn't a problem in his mind but we should do it anyway. And Brooks belief that investment in energy would be another boost for job creation is hard to disagree with-- Krugman no doubt agrees with that as well, though the realism of Brooks' belief that President Obama could have shepherded an energy bill through the Republican legislative gauntlet strikes me as a pipe dream even if it were attempted before health insurance reform as Brooks wishes he had. As it is, health insurance reform was a half measure at best though an advance over the status quo, but at a political price that may cost The President all of the rest of his dreams and an energy bill of the same quality would have been just as deficient with regard to solving the problem it was intended to address with the same cost in political capital.

As for payroll taxes, giving money to business for any reason accomplishes nothing though Mr. Brooks and the entire Republican conservative complex (Rcc) think tax reduction is the solution to every problem. And sacrificing the Social Security trust fund to do so is sheer folly, especially in light of the Treasury statistics that demonstrate that business is awash in money while the lack of job growth demonstrates thatt it is staying in the owners' pockets. But even if it weren't, the problem is still the same and neither of these men seems to acknowledge it. Americans got tax reductions from George Bush, and now again in the form of the "Make Work Pay" program that put $800 in my pocket at tax time in 2010, which went directly into my children's tuition fund and toward paying our bills in the month of May. Again treasury statistics are the proof of the pudding: we Americans are saving and paying off our debt at a record pace. Tax relief, no matter how targeted, does not produce jobs especially at a time like this. Only two things do: consumer spending and government spending. And even at that, it is going to take years for us to get over this blow we have suffered, decades if the Republicans have their way, and putting more money in the pockets of people who already have some won't change that. The only way out is to give money to people who have none, and hence no debt to pay, and to give those without jobs a way to earn what they need to live, and business has shown that it will not help pay that bill. So here's the slogan I urge for both Brooks and Krugman, and the Rcc as well: It's the government, stupid, and even then only if they do it in the right way. As to you, America, as I always say, think with your own head, not someone else's, and vote accordingly because on election day, the majority of us gets what it deserves, but the rest of us get it too.

Your friend,

Mike

Dear America,

There were a couple of articles in Tuesday's New York Times that seemed strangely related to me, and it has taken me all this time to come up with the nature of that relationship. The first was about a new set of sanctions directed at North Korea.

There is what the Times characterized as a "shadowy party organization" called Office 39 in North Korea, and its sole function is to obtain funding for, and to procure, luxuries for party insiders and the friends and family of the North Korean dictator, Kim Jong-il, all of which is apparently funded with "contributions" as well as ill-gotten gains that Office 39 extracts from various people, friend and foe, in one way or another. The Obama administration is now imposing sanctions directed at Office 39, which they say is involved in various forms of nefarious activity, and against North Korea in general-- sanctions intended to soften the North Korean position, which is really Mr. Kim's position, on nuclear weapons development; the North Koreans have been intent on perfecting theirs for some time. The form that the sanctions are taking is to interdict the supply of these luxury items, including such things as two Italian luxury yachts worth $15 million, which Office 39 apparently attempted to purchase last year to the chagrin of Italian authorities who prevented the purchase. Deprive the rich of their riches and they will come around to your point of view seems to be the theory.

The second article was about an American, Daniel S. Loeb. Mr. Loeb is a hedge fund manager, which is another way of saying that he has gotten rich taking bets from rich people about how the economy will affect particular businesses in the future, and he thinks that his enterprise is an integral part of our capitalist system. Apparently he hasn't thought about the fact that he does not produce anything and has gotten rich not doing so, and with that kind of self-serving mentality, he thought it in his best interest to support the Obama candidacy for the Presidency of the United States. The Times intimates that his motivation was self-congratulation: helping to procure the presidency for a fellow intellectual from his alma mater, making them not just fellow ivy leaguers but friends as well, and putting Mr. Loeb in the company of a president instead of his fellow robber barons when his name got mentioned. As it turns out, 70% of the Wall Street money spent on supporting candidates in that election was directed toward Mr. Obama according to The Times, probably all for that reason: the purchase of legitimacy. Apparently all of the hedge fund managers are seeking the same kind of validation. But now, Mr. Loeb is scathingly critical of Mr. Obama, especially after the financial reform package took its final form and was passed. He and the others seem to feel now that they are being characterized as villains rather than as the smartest guys in the country. In fact, one of them, a fellow named Schwarzman, recently said that the administration's plan for taxes on private equity funds, that is syndicates of rich people who buy and sell stocks thus moving the markets and then capitalizing on the movements, was comparable to "when Hitler invaded Poland in 1939," an ill considered, and frankly odious analogy for which he promptly felt compelled to apologize. Mr. Loeb has been more diplomatic. He said that his fund, again a consortium of rich people who haven't yet realized that they have too much money and so are still trying to get more, had sold off some otherwise sound investments because they were exposed to regulation that he considered deleterious to their long term prospects. Rich people always seem to think that anything that anything inimical to their accretion of more wealth is overzealous. So now, Mr. Obama is on the outside of the billionaires' club whose members thought they had made him an honorary member. And they paid for the realization that their choice for president will do what he said he was going to, campaign money or no. And there is the nexus between the stories.

Our President seems intent on making change. He is doing what he thinks will work to reign in excess among the cabalistic rich, whether they be tin horn dictators on the other side of the Pacific or narcissistic plutocrats on Wall Street. The President is telling the sybarites of the world, foreign and domestic, that they are going to be deprived of their self-indulgences if they do not do the right thing, whether it is to abandon nuclear arms development or to stop gambling wildly with the economy of our nation and getting rich at everyone else's expense. He will deprive the political dictators of the means by which they have obtained their yachts in the past, as he will do with the hedge fund dictators who think themselves entitled to impose what amounts to a tithe on everyone with a dollar in his pocket. Given that this is just Barrack being Barrack, I do not see how people so confident in how smart they are could have underestimated his determination, but they are getting a dose of it now, and I hope it works. The financial reform law and this new set of pointed and embarrassing sanctions against a corrupt dictator are, at least from my perspective, the first signs of The President drawing the proverbial line in the sand, which is why I voted for him. I'm pleased at the affirmation of my faith. As it turns out, it was the guys who thought they knew everything that were wrong, not me.

It is not yet apparent whether these strategies are going to work. There's probably plenty of money in Swiss bank accounts to sustain the lavish habits of the crass few for a good long time. But I am reminded of a story I heard a long time ago about an interview with John D. Rockefeller, the founder of Standard Oil. Rockefeller was at the height of his financial power, and the reporter asked him what he was worth, to which Rockefeller replied that he didn't really know. The reporter then asked him how much money was enough, and Rockefeller famously replied, "just a little bit more." These guys, Kim Jong-il and Loeb along with many more are just like that, which is where The President's leverage lies, because he doesn't have to deprive them of their last dollars to get their attention. He just has to deprive them of their next one.

Your friend,

Mike