November 2010 Archives

Dear America,

The financial crisis that started in Europe with Greece seems nothing but the perseveration of governments worldwide in their treatment of the banking collapses caused by the misfeasance (and I am being kind by using the prefix "mis-") of their banks in the same way as the American government treated our banking institutions. The fear of universal financial ruin-- a new, modern would-be horseman of the apocalypse-- has stampeded them all, including ours, into allowing the plutocratic class to "get out of the water dry" as the Russian adage goes. It started with the big money players in our financial establishment, which is really nothing but OTB for the rich, scaring first the Bush administration and then the Obama administration into using our money to pay off their losses in their colossal monopoly game. (I say it was a monopoly game because the money they lost turns out to be only play money; the only real money lost was ours.) Now, Irish banks that played in the same game but stayed in it a little longer are going bankrupt too, and guess who's paying off their plutocrats' debts. That's right, their government hasn't figured out that they've been had either and the people are paying off the gambling markers of the rich there too. There must be a name for a group, the members of which keep making the same mistake one after another. I can't really think of one that is not profane right now, so lets call them serial goofers-- SG's for short.

So what we have here is the United States starting the trend and the SG's of the European Union falling into line and doing the same thing, one nation after another. And they are seeing the same results there as we have seen here: growing unemployment, austerity for the middle and working classes, gigantic national debt and budgetary deficits, and obscene prosperity for the perpetrators, none of whom seem to be going to jail for their defalcations and deceits. Bernie Madoff must sit in his cell every night and ask why he is the only guy in the world who went to jail for stealing billions, which in the total scheme of things seems to be regarded by governments everywhere as at worst a victimless crime. Finance is the only business in the world in which you can steal the equivalent of a small country's national budget and get away with saying, "oops." If Al Capone had only known, he could have gone to Wharton and avoided the penitentiary. And as for Willie Sutton, it turns out that he had no idea where the money was. Now, the "Fabulous Fab" of Goldman Sachs fame, he understands the game, and Jamie Dimon...when the next edition of the Monopoly board game comes out, his face will be on the character that graces all of the chance and community chest cards. Those guys know how to play the game. And it seems that the SG's can't touch them, or at least won't for fear that they won't fix what they broke. But I've got news for all of them. They aren't the smartest guys in the world. They're just the men behind the curtain. The real power may lay elsewhere.

What's going to be interesting over the next two years will be whether the erstwhile independent thinking Tea Party Movement is going to actually be independent in thinking about all this. The danger is that they will fall into the Republican Party line and allow to continue the practice of sheltering these country club "wise guys" from harm, and the risk is real. None of the Tea Party-ers were Democrats, and so virtually all of them owe some fealty to the Republican establishment. And the Republicans have been prattling on for some time about the undue restriction of financial institutions that the Dodd-Frank Act represents and the role that such institutions play, they claim, in all of our prosperity. So it is frightening that, despite the obvious hokum factor in those claims, the Tea Party-ers have not made any noise about that aspect of establishment politics. They think that government is too big, and the Republicans and the Republican conservative complex (Rcc) will use the myopic dogmatism that they have demonstrated thus far to perpetuate the impunity enjoyed by the real Billionaire Boys' Club, which has hijacked our capitalist system and laughed at us all the way to the bank, which by the way they control if they don't own it. There are signs of independence in a few of them, Rand Paul for example, but his ideas seem so unfounded and arbitrary that he will be hard to predict, so the potential of the rest of them will be as hard to predict as is his. And the leaders of what could be called the Tea Party Caucus seem much more enamored of themselves than they are of principles anyway. They may turn out to be just sixty more empty suits in the final analysis. But just as the Republicans see them as natural allies, the populist constituencies should see them as potential assets on Capital Hill as well.

My point is that at least on the subject of who is the villain in the financial ruination that has profited the few and devastated the many, their natural inclination should be to champion the causes of the many. So the ability of the Rcc to convince them that protection of big finance is in the interests of the many is really the pivotal issue for us all. If the Rcc succeeds on this point, the Tea Party will be co-opted and they will just be more of the same Republicans that have gone to Washington in the past. But if the Tea Party-ers see the light, at least on this one point, there is a chance that their movement could actually become what they think it is now: a advocacy movement in favor of the vast majority of us against those few who would have it all if they could. However there is only one way for that to happen. The Democratic establishment must begin to talk to them and show them how the Rcc is wrong. In other words, the Democrats in Congress should not concede the loyalty of the Tea Party to the Republicans. They are not yet in anyone's tent, and they could be the making of a Democratic majority in the end, at least on some issues. So the key to the next two years isn't fighting Republican obstructionism. It is taking the offense and hijacking their juggernaut. Unless and until the Tea Party is lost to the Republicans on this point, they are as likely ours as theirs...ideologically that is.

Your friend,

Mike

MichaelWolf@Letters2America.com

Dear America,

The Sunday talk shows had a bit more diversity on them than usual. Most weeks there are one or two issues that have been batted about very publicly by the two political parties, each trying to tarnish the other's image, not to mention its repute in the public eye. But this week, ABC's This Week featured the billionaire benefactors-- Buffet, Gates and Turner-- telling us all how to be philanthropic. It is interesting to hear them say that they feel themselves morally compelled to divest their families of the vast preponderance of their billions, but it rings a bit self-serving none-the-less. Still, they were more meritorious than meretricious, which cannot be said for the political guests on Meet the Press. NBC featured Democratic Senator Dick Durban and Republican Senator John Kyl. Durban is a consummate politician, and he appears to be a sincere human being, but with the tactics the Republicans have employed for the past two years, the same ones they continue to employ in the lame duck session of the 111^th Congress, he had no choice but to stoop to finger pointing. Kyl and the Republicans are employing this interstitial period for the purpose of impeding all Democratic initiatives thinking that by interdicting the other side's efforts they are aggrandizing themselves. Someone must see the irony in the Republicans dogged repetition of their claim that the Democrats learned nothing on November 2 while they continue on the course that led the American polity to reject both parties, not just the Democrats. However, while such also seemed certain before the election, the inertia in Washington was blamed not just on the Republicans for their insurgency but on the Democrats for their inability to overcome it as well, so Durban and the Democrats have no choice but to get down in the mud with their adversaries, and the mud is where Kyl is wallowing.

The Obama administration has been negotiating with the Russians for a new strategic arms limitation treaty, and the two sides have agreed in principle. But under our Constitution, the Senate must ratify the treaty by a two-thirds vote, and Kyl is leading the effort to scuttle approval of the treaty on the pretext that there is not enough time to debate the treaty before the session ends, even though the administration has provided him with every piece of information he needs to evaluate the treaty as the Republicans' point man on this issue. He also refused to answer the question of whether he supported renewing tax cuts for 98% of Americans if those for the top 2% of earners were held up. He even said that the Senate must have time to debate the extension of unemployment benefits, the earned income tax credit, and he probably would have wanted time to discuss Mom's apple pie if he'd been asked. But since he and his party think that they got away with it before the election, they continue to beat their own drum as well as the Democrats' collective brow. So Durban fought the good fight though how successful he was is open to speculation; who knows how the American people think these days. And then there was the "roundtable" discussion.

This week's panel comprised the mayor of Philadelphia, a Republican political analyst, a liberal journalist and a conservative journalist as well. The conservative journalist was Peggy Noonan, which suggests to me that NBC couldn't find any other conservative journalist in Washington three days after Thanksgiving. She was a speech writer for the senior President Bush, and as she speaks on occasions such as this week's Meet the Press, the timbre of her speech writing is quite apparent, and what she is saying these days is no more cogent than the words she put in George H.W. Bush's mouth. There is a difference between saying things simply so that they can be understood and saying them simplistically so that they can be dismissed with scorn. She does the latter, thinking apparently that she does the former, and as a consequence adds nothing to any colloquy. But on the subject of bipartisanship, the lack of which is at the core of our political problems, Noonan stated the Republican position in a nutshell: that the Democrats are pretending that the November 2^nd election never happened and they are refusing to change the tone in Washington. And during the uncontrolled exchanges that followed, that point was reiterated and amplified by, among other things, reference to a remark the President was reported to make during a bipartisan meeting before passage of the economic stimulus package after the 2008 election in which the Republicans insisted that anything other than their way was a rejection of bipartisanship. The President replied that he had won the election, meaning that the popular mandate went to him and the Democrats, not to the Republicans, which was more than arguably so. Still, though infrastructure spending was what the President wanted to emphasize, the package he got passed included $320 billion (40% of the total package) in tax cuts: a Republican priority, which he conceded in the name of bipartisanship. That however does not count as bipartisanship to Republicans because they did not get everything they wanted. And further, as the Democrats passed the tax cuts, the Republicans claim that they were just being fiscally irresponsible by increasing the national debt, which apparently would not be the case for the $700 billion the Republicans want in tax cuts for the richest 2% of us.

It is time to let the chips fall where they may with the electorate, and that was what Dick Durban did, whether it showed gentile restraint or not. The entire party must do what Durban did this Sunday: lay out the Republican position and let them try to deny it. By doing so, they will at least succeed in putting reality on display, and in the end, what more can they do. The American people are fickle. They went from being 80% in favor of new airport security measures to less than 50% in favor in the space of a single week, even though dispensing with those measures in these times of heightened risk could result in death and destruction: their own. So who knows what good sincerity will do. Sometimes the magic works, and sometimes it doesn't.

Your friend,

Mike

MichaelWolf@letters2america.com

Dear America,

Ireland is now going through essentially the same thing as we did two years ago, except that the country seems to be playing the role that our too big to fail banks did. The European Union and the International Monetary Fund (IMF) have prevailed upon the Irish government to accept 160 billion Euros to resolve its risk of massive debt default. The fear is the same as was the American concern when all of those credit default swaps were being redeemed against AIG, which got a similar infusion of capital from the American government in order to prevent the company's defaults. The fear here was that there would be a ripple effect that would shake our entire financial system, and so, we put our money where AIG's mouth had been. Now Ireland is burning and the European Union is trying to avert the same thing that our government feared. Of course, a country failing to pay its debts is different. Governmental failure leaves nothing behind whereas when an insurance company fails, only those insured are devastated. But in its essence it is all the same; our financial industries convinced us that their wealth was our prosperity and thus, the more for them, the more for us. Unfortunately, it doesn't work that way.

What is disturbing about this modern round of defaults and defalcations is that we seem to be learning nothing from them as we keep going back to the villains of the piece for instructions as to how to cure our ills. They are our ills, and the way to cure them is to watch them and prevent them from foisting on the masses their absurd alchemical claim that they can multiply everyone's wealth without creating more capital, that is, more assets. In reality, all they do is dilute everyone's wealth by taking a portion of it for themselves. They manage money. They don't create it. And the fees they take, the commissions, the proceeds from the side bets they place against their clients' success-- the vig as I call it-- is not the augmentation of our collective weal. It is loan sharking, plain and simple. And the loan sharks, with the help of the Republican conservative complex (Rcc) on our shores and who knows who in Europe, call themselves things like "hedge fund managers."

A hedge fund is an investment firm that usually requires a minimum investment of $1 million. That tells you what a rarified atmosphere they operate in. What they propose to do is to take the investors money and create, you guessed it, a hedge against the failure of the investments of the rest of the people who live in that rarified atmosphere. In other words, a hedge fund is the equivalent of a secret society that concerns itself with only itself, and that is run by a grand pooh bah who tells no one what he is doing with particularity, and in the bargain, can usually hold the members' money for as long as he wants up to the time specified in their investment contracts. He makes high risk investments with that money, and as a consequence, he needs that temporal flexibility because the fortunes turn quickly in such enterprises. It is high stakes bingo for plutocrats, and in 2009, at least two such managers made $2 billion or more. That's what they made, not what their funds made. And again, they created nothing. They cured no disease. The produced no goods. All they did was manipulate the money that came from other people's productive activities.

That is why I take such umbrage at the continuing influence of the segment of our economy that euphemistically calls itself the "financial industry." It is not an industry any more than running numbers is. It was different when the Glass-Steagall Act (GSA) was the law. This is how an entry by Reem Heakal on the website Investopedia.com describes the reasons for its passage in 1933.

Dear America,

It is interesting to see how the results of the recent election are affecting the conduct of the two principals-- the Democrats and the Republicans-- as they go about, or don't go about, the nation's daily business. Oddly, it seems that no one learned anything from the outcome. The Republicans continue to bully the timorous Democrats who, though they lost the election in the strategic sense, still control both houses of congress until January and have the same power now that they had before November 2 though they lack the courage to take a stand and make the Republicans do so too. While the two party system is intended to guaranty us a choice, that choice this time was between a bully and its nearly willing victim. And then of course there is the Tea Party, which seems a throwback more to the "me generation" than to the colonial rebels whose eponymous enterprise is claimed as their inspiration.

The personifications of the two parties are McBoehnell (Mitch McConnell and John Boehner) for the Republicans and President Obama for the Democrats. While there is a lot to say about President Obama's diffidence in the pursuit of the agenda we sent him to Washington to pursue, there is a sense in which he cannot be blamed, and thus there is no point in saying any of it. The Democrats are more like a herd of cats than a political party: Blue Dogs, self-styled conservatives, insiders and outsiders, all working at cross purposes. The prospect of herding them effectively is bleakly remote at best, though at least they all think for themselves. On the other hand, the Republicans are more like sheep: willing and unquestioning followers of the guys with the biggest...horns. McBoehnell has, while leading the minority no less, dictated the way in which our nation is heading. It is astounding, especially when you look at these two individually.

McConnell is an unapologetic blowhard who is not above any presumption of moral authority. He himself admitted that if the November election was a referendum, both parties lost. Yet, he continues to strut across the political stage presuming to dictate the direction that things will take, unfortunately without a hint of opposition. It will be interesting to see how his next bid for reelection goes. It may be that sanctimony and arrogance are heroic traits in Kentucky, but since Rand Paul, the Tea Party's first success, ousted McConnell's choice for the seat that Paul now holds, it seems more likely that Kentucky will be the first state with two Tea Party senators, neither of whom will be Mitch McConnell. That may be one of the few good things to come out of the movement. But Boehner is somewhat different-- a significantly smoother operator, though probably just as much a threat to American prospects.

Just after the election, Boehner took the podium in some swanky hall and began to speak about what seemed at first to be the changing political tide represented by the election results. But it quickly became clear that Boehner's topic for the evening was Boehner. He regaled the crowd of his loyalists with the tale of his youth tending bar in his father's saloon. He told of how he had gone into business, and then into politics, fighting tears all the while, and sometimes unsuccessfully (apparently he moves himself to tears often when he speaks, even when he is speaking on the House floor). With an unbecoming lack of restraint and without modesty as well, he patted himself on the back for his ascendancy and very shortly after he began he came to the point. He boasted that he was about to become Speaker of the House, which admittedly was a virtual certainty. And just then, when it could have been anticipated that he would talk about the electoral manifest destiny that he would pursue with his new power, when that might have even been appropriate, he told the crowd that this was the accomplishment of the American Dream...for him. John Boehner, with his faux tan, his bright eyes and bushy eyebrows, his two thousand dollar suit and his hundred dollar haircut, acknowledged that it had all been about him, and that is who is going to lead the Republicans in the Congress: an egocentric, poorly informed (he stated his opposition to the moratorium on deep water drilling in the aftermath of the BP spill based on there being 40,000 drilling rigs in the Gulf of Mexico when in reality there are less than 4,000) friend of lobbyists and plutocrats who chain smokes, probably for free since one of his best friends is a tobacco lobbyist. John Boehner is an empty suit with full pockets, and he is the Republicans' choice for a leader. That is the man who will be two heartbeats away from the oval office come early January. And right behind him in the Republican Party is Eric Cantor: an empty cheap suit.

One of the things that the election is most notable for is that half of the Blue Dog Democrats lost their seats despite their pandering to the right side of the body politic. If there is a lesson to be taken from November 2, this is it. Pandering to the other side's political base is futile ultimately, and in large part, it is destructive to the party in that those who succeed, even just for a little while, are spoilers and ambitious hacks who do nothing but impede party progress toward the goals that true registered Democrats exalt. The Democratic Party should renew its commitment to progressive purpose and cease to support conservatives even though they have the potential to win seats for the party. They serve no purpose when the important things come along. And since it seems that one party can control politics in this country even from a minority position, the Democrats should let that suffice if necessary until they enjoy majority power again. That is how the Republicans do it for their benefit. So that is how the Democrats should do it for the benefit of the American people, and that is a moral imperative though it is decidedly immoral in my opinion. But the 60 vote filibuster cloture rule is the rule by which the Republicans rule, so we should all live by it. The alternative is McBoehnell.

Your friend,

Mike

MichaelWolf@letters2america.com

Dear America,

I last wrote to you about the two competing plans for resolving our debt and budget crises, and about their proposals vis-à-vis Social Security in particular. I have written to you about Social Security before, specifically about the question of how cuts in the benefits paid to recipients will ameliorate our debt and budget deficits, that is, they won't. Social Security is paid out of a trust fund dedicated to that purpose solely and the fund will be sufficiently liquid to pay all of the scheduled benefits for another twenty years. Granted, there are problems ahead and something has to be done to avoid them, but that has nothing to do with the national debt or the annual federal budget deficit because to this point and for some time to come, Social Security has and will pay for itself, not out of federal funds but out of our funds...the money that the federal government saves for us out of each paycheck we take home. So changing the program in any way will have no effect on either the debt or the deficit. As to the rest of the two plans, there is not a new idea in either of them, and most if not all of them will not get off the ground. But this obsession with Social Security as a means of balancing our national finances is dangerous if I understand it correctly, which is precisely why I sent a copy of my last letter to you also to All Things Considered on NPR. If I am missing something, I thought, maybe they can tell me what it is.

Well, the next day they sent me a nice acknowledgment and thanked me for listening, which I did again that very night as I usually do, and to my surprise, they had considered the very issue I had raised, albeit probably not because I wrote to them about it, and they were going to address it, or so I thought. But the question I raised-- the one that I think needs to be answered by the federal government, the Republicans in particular-- is how does altering Social Security address our massive debt and the budget deficit. Unfortunately, while NPR did give an explanation of how our money gets used once it gets to Washington, it was so condescending in its tone, so insipidly simplistic that it failed in any way to sound the alarm that the issue calls for: that our leading lights on the subject of debt reduction are about to rob us blind. We are in trouble, my fellow Americans. Even NPR won't call what the federal government is thinking of doing to us by its right name.

It is true that Social Security is a Ponzi scheme, but as long as the United States exists and working people continue to work-- and there is no indication that either will cease to be the case, and if it does we have lost everything anyway-- we will get what it promises, so scheme that it is, it is no fraud. But if the U.S. government takes our money instead of giving it back to our progeny in the form of benefits as intended...well, that's another story, and that is what NPR should have said, but it didn't. It put two disembodied little voices on the radio and they did what turned out to be a cute little Dick & Jane type skit to explain to us all how the Feds are using our money as soon as it comes in, at the same time failing to point out that it is still our money even if the Feds borrow it. They failed to point out that the Feds made us give it to them so that they could set it aside for us and our kids, and we and our kids are entitled to get it. So now, if the government decides that it is going to take our money to pay off its debts and not give the money back to us under some austerity plan, that isn't patriotism, as David Brooks said it was in his editorial last week. It is outright theft. It is taxation without representation, or at least without effective representation, and as we all know, that is tyranny: serious business...too serious to be explained with some coy little elementary school skit. But that's what NPR gave us when what we really needed was reportage on an enormous injustice in the making, and a futile folly in the bargain.

What we should be afraid of is not just that the national debt will continue to accrete without end, though that is a serious problem. It is not just that our government does not know how to live within its means, though that is a serious problem too. It is that serious agencies-- both governmental and non-governmental-- on which we rely to inform us, to protect us with information really, are feeding us meaningless pap instead of the real meat of the dilemma. And given that NPR can't do better, just consider what Glen Beck and Fox News are going to do and where that will lead the Tea Party, which for all its self-serving talk of independence is just a font of the same conservative hooey we have been forced to hear for decades. That is why I say we are in trouble. It's not just that there's a thief in our house. It's that he's in here rummaging through our belongings, and the cops, who are supposed to protect us, are telling us that its just the tooth fairy.

Your friend,

Mike

MichaelWolf@letters2america.com

Dear America,

For years, the Republican conservative complex (Rcc) has been crooning to us about certain Rcc articles of faith: the free market is the best market; less regulation is better than more; stimulate the supply side of the economy rather than the demand side to induce growth; lowering taxes because, the Rcc mantra goes, actually mean higher federal revenue; and of course, cut "entitlements." We all know what that means: cutting Social Security and Medicare. Entitlements is just a euphemism they use, sort of like whistling in the dark. If you pretend that the bogey man isn't there, he won't eat you. But lately, an emboldened Rcc has dispensed with the euphemism and come right out and said that Social Security and Medicare must be reduced if we are to balance our budget and begin reducing the federal debt. In fact, since the election the campaign against Social Security and Medicare has intensified as if the Republican Party-- which in campaign ads misrepresented and decried cuts in Medicare enacted by the health insurance reform law of the Democrats-- was given some kind of a mandate to do so. They are in denial as to all of the surveys demonstrating that we don't trust them to do the right thing any more than we do the people they replaced. And now, there are two proposals regarding debt and deficit reduction-- one from the "Bipartisan Policy Center," whatever that is, and the other from the two co-chairmen of the President's debt reduction commission, Bowles and Simpson. And there are several things that are notable about both proposals.

First, both have been produced by people who are no longer holding office, in each case including a former Republican senator and a former Democratic White House "expert" on the budget, and from what I have seen and heard them say about their respective works, their emeritus status is probably for good reason. With so many used-to-be important people involved, the senescence of their ideas is not surprising, probably reflecting why they used to be important, but except for these reports are not any longer. Second, they both mention Social Security benefit reductions even though both proposals are supposed to relate to debt reduction. In other words, as to Social Security, whether it is problematic or not, who asked these people for their opinions.

As to the preliminary report from the President's debt reduction commission, when I read the section on Social Security I saw that it was prefaced with a heading noting that it was not an element of debt or deficit reduction proposal. So, with regard to that plan, while the discussion of Social Security was entirely gratuitous, at least the report so states and it makes no pretense that changes in Social Security will in any way solve the problem that they were charged with solving. They apparently just had a stray idea and thought they would share it with us. However in the report from the Bipartisan Policy Center's Debt Reduction Task Force, that is Rivlin and Domenici, the impact on Social Security is significantly more devious and dastardly. They start with tax policy through which the economic middle and lower classes will bear almost all of the new tax burden necessary to balance the budget and reduce the debt. They propose a 6.5% sales tax on the federal level. In Britain they call it a value added tax. Just to be clear, the reliance on a sales tax has always been regarded as socially regressive as it imposes most on those at the bottom of the economic ladder because it first affects necessities like food, clothing and shelter. Those things utilize much higher proportions of working people's budgets than they do those of the wealthy, who save and invest much of what they earn rather than spending it to keep body and soul together the way the rest of us have to. But here's the devious part. In addition, they propose a "tax holiday" for two years on "payroll taxes," that is, the money that both employer and employee contribute to the Social Security trust fund will not have to be paid for that duration. At first, that sounds good; it costs business less to pay us and we get to keep more of what we earn, but think about it. Social Security has been plagued by a single problem for decades: the impending negative flow of cash. So, if money is not contributed into the trust fund for two years, that means that the turn to cash negativity, that is to spending more on benefits than the fund has, will come that much sooner. Then, cuts in our benefits and increases in payroll taxes will be that much more severe. They want to rob Peter now, and then rob him again later.

The essences of the two proposals are full of holes as they are, and as to the Bowles/Simpson preliminary proposal, it seems to me that it is simplistic, peremptory and conclusory, prescribing cutting this, that and the other thing (mostly the tax decutions that you and I rely on rather than, say, the oil depletion allowance) because they say it should be done without considering the implications of doing so, or even whether it is possible. It may sound like they are doing their job by proposing the hard solutions, but that is only half of it. The solutions also have to work, and they don't. For example, they want to alter or eliminate the home mortgage interest deduction based on the claim that it does nothing to induce home purchases when, if they lived down here on this planet with the rest of us they would realize that it is probably the single most cogent reason to buy a house rather than rent and put more money in the bank. But even if such were not the case, the demand for new housing is crucial to the economy, providing a significant proportion of new jobs, some say the most pivotal segment of the new job market, and it is slumping terribly right now. So if any inducement to buy rather than rent is abolished, how can that possibly have anything but a destructive, perhaps devastating effect on the economy, now when we need such a thing least.

What I have to say about all this is simple. First, Social Security has not been sacrosanct for all these years for no reason. It provides a predictable flow of consumer demand, which is even good for the rich. It feeds and houses people who, before Social Security existed, had no means by which to sustain themselves once they could no longer work and thus it has kept them off the streets all these years. And beyond the practical reasons for it-- and there are many more-- it is the right thing to do. But second, speaking of the right thing to do, the many down here cannot afford to carry the burden created by the avarice of the few at the top any more. Tax rates for the rich are at hundred year lows, and the rate at which they are increasing their share of our nation's treasure is obscene. It is convenient for a few comfortable politicians to propose that we down here do more, but the fact that they call it necessary doesn't make it so. During and after World War II the top tax rate reached 90% and we achieved a level of prosperity this nation had never known before. So let the rich pay just 50% now. That's my proposal. Problem solved.

Your friend,

Mike

MichaelWolf@letters2america.com

Dear America,

Almost any current affairs program you turn to on television will at some point have a discussion of the economy and which way we should turn next. Monday night Lawrence Kudlow, your basic Wall Street cheer leader, had two economists on his program: one was the progressive former labor secretary, Robert Reich, and the other was someone I have never seen before whose name I neither remember nor care to. Reich's position has been the same all along; the rich have too much money and they are not only killing the rest of us with it, they will eventually kill themselves-- the goose and the golden egg theory. The other party to the debate insisted that what we need is less regulation and lower taxes; where have you heard that before. But regardless of my ingrained tendencies, self-interest is not an alien concept to me. If the conservative mentality on the subject of how to cure our economic woes is the most effective for everyone, I will gladly admit to being wrong in my predilections and climb up into the Republican conservative complex's (Rcc) gravy train as long as there is room for everyone on it. And correspondingly, if the progressive school of thought is materially best for everyone, I will follow as I always have, given that I believe such to be the case. But either way, I have to figure out my own position before the next election as do we all considering that there are legions strenuously urging each of us to go in either direction. Thus, consistent with my creed that we should think with our own heads and not someone else's, I am going to spend the next two years asking questions and deciding for myself whose answers make the most sense. I am starting with the notion that we must reduce benefits and the cost of Social Security in order to balance the budget.

The most recent figures I have heard are that Social Security will go "cash negative" in five years. That means that five years from now, the Social Security "trust fund" will begin paying out more than it takes in, trust fund being the operative phrase. Mind you, there is already enough in the trust fund and being paid into it between now and then that Social Security benefits could continue to be paid at the same rate without any change in the income of the fund-- that is the aggregate amount we citizens pay into it-- until about twenty years from now. I am not advocating that we make no adjustments to prevent the negative cash and income situations from emerging, but here's the question: if Social Security is paid out of a trust fund, that is funds dedicated solely to the purpose of paying Social Security benefits, and there's enough in the fund to pay benefits for awhile thus obviating any federal subsidization, how does reducing those benefits or increasing the fund's revenues reduce the deficit or the national debt? It would be one thing if Social Security benefits were paid out of the general fund, which comprises all of the revenue of the U. S. government-- and I advocate that incidentally-- but it isn't. If you look at your next pay stub, you will see that, while your check is reduced by federal income tax withholding-- that's the general fund money-- it is also reduced by a deduction strictly for Social Security. They are separate and distinct from one another. The Social Security money goes into the trust fund I mentioned above, and it can't be used for anything else, just as funds put in trust by Bill Gates for his kids to live on some day cannot be used for any purposes other than those he dictates in the terms of the trust. The funds in the Social Security trust are our own joint savings account and that money belongs to us even though the U.S. treasury holds it for us. It is not federal revenue of any kind, at least as I understand it. It is true that the U.S. government borrows that money as soon as it comes in, but that does not make it any less ours.

I raise this issue because, on the conservative side of the debate people are clamoring for benefit reductions and an increase in the retirement age. But as I said above, as I see it those things might help prevent the cash negative situation the fund is facing, and they might make it unnecessary to decrease benefits in the future, but I don't see how they reduce the debt or the deficit? So what benefit would devolve from doing those things? As to the liberal side of the argument...well, I frankly haven't heard much, which seems to be par for the course these days. My own opinion is that increasing the retirement age would just reduce the number of jobs available to people coming into the job market. It's just simple arithmetic. If there are ten jobs and ten occupants filling them longer, those needing the jobs have to wait longer to get them, and they stay unemployed longer as a consequence. And on the revenue side of the issue, it seems to me that we could solve the balance of payments problem by getting more in the way of contributions from those working toward retirement in several ways: we could increase the maximum contribution by raising the income ceiling under which you pay into the system, we could increase the percentage of income contributed, maybe we could even find someone to pay a higher interest rate when they borrow the money than the federal government does. And maybe a combination of the income measures and the benefit reduction measures would be appropriate. But what does that have to do with the national debt or the deficit, which translates to the question, why is the President's debt reduction commission even mentioning it?

So, I admit that I don't understand how all of the debt reduction pieces relative to Social Security fit together. And while I have abandoned this idea lately, I am willing to assume once again that the people in charge are smarter than we are. Therefore, I'm asking them, or anyone else for that matter, to explain it to me. America, here's my email address: MichaelWolf@letters2america.com. Please write to me and let me know where I'm wrong, because really, if the Rcc has one, I'd love to get on their gravy train.

Your friend,

Mike

Dear America,

As the prospect of the report of the President's bipartisan commission on debt reduction-- delivered in a preliminary form authored by the two co-chairmen last week-- begins to cause political reactions of seismic proportions, the caliber of the incipient debate on the subject portends nothing good. The coming colloquy will likely be fraught with rancor and vituperation, calumny and canards, and in the end it will do nothing but confuse the issues. That is because these two leading lights who produced the document are both politicians, neither of whom has ever seen either a tax cut or a wealthy political donor that he didn't like. They have framed the debate to come in terms that are already familiar to all of us from the last thirty years we have spent being regaled by the supply side advocates of wealth for wealth's sake, and the solution to all our problems that is now going to be proposed is not different from any of its precursors: give more money to the rich and they will take care of the rest of us. The conservatives will lambaste the liberals for being unregenerate big spenders and the liberals will deride the conservatives as enemies of the middle class, and unfortunately, they will both be right. But their arguments will also be irrelevant.

The real issue we face as a nation is not the extent of our patriotism or our willingness to sacrifice as claimed by David Brooks, and it is not really the size of government, either as it is in reality or as it is claimed to be by the Republican conservative complex (Rcc) that now includes the Tea Party Movement. The real issue is simply this: are we willing to pay as a nation for the right of a select few to live like sybarites? The impending plan, just like all that has come down on us from Washington for three decades, cuts taxes for the rich on the theory that doing so will behoove us all. But our post-Reagan history does not bear out that claim. Our real problem is the one that caused the Depression, which seems to have been God's way of telling America that we had too much money. Our real problem is that the super rich cannot get enough, and our government is dead set on helping them get more. This plan is just one more iteration of that philosophy.

Erskine Bowles is a North Carolinian who has known two types of employment in his adult life: he has worked for the government as a member of Bill Clinton's office staff and as the Director of the Small Business Administration, and he has been a financier working first for Morgan Stanley and then at his own investment bank. He is the son of a southern political patrician with considerable connections as demonstrated by the fact that Bowles was allowed to enlist in the Coast Guard at a time when other young men were being drafted and sent to die in Vietnam. His education culminated in an MBA from Columbia Business School after which he went to work for Morgan Stanley for four years followed some years later by his founding of his own investment bank. In other words, he never did an honest day's work in his life until he worked for President Clinton as Director of the Small Business Administration for about a year after which he moved to a second level post in the White House in 1994, where he also stayed for about a year. Then he went home to start his investment bank, with whose money it is hard to say. Almost immediately after doing so, he returned to Washington to be Bill Clinton's chief of staff for a couple of years after which he went home again. Since then, he has held a couple of state appointed posts, most recently as president of the University of North Carolina. In other words, unless you consider appointed political posts and investment banking to be honest occupations-- as to the latter, you would have to have been off the planet over the past two years to so believe-- Mr. Bowles has never done an honest day's work in his life, which appears to be a life quite similar to his father's. That is all Erskine Bowles has ever known.

Alan Simpson is a not altogether different story. He has no business background, but his father was a governor of Wyoming and one of the state's U.S. Senators for a term, ten years after which Simpson was elected to the post. During that interim period Simpson the younger was a state legislator. He does not bear the stigma of a business career like the one that taints Bowles, but his conservatism is nigh unto a religion and his butter-wouldn't-melt-in-my-mouth righteousness is a kind of blatant hypocrisy in that he apparently was convicted of a federal crime involving mail boxes in his youth and at least once assaulted a police officer around that time. People of my vintage might remember him from the Supreme Court confirmation hearings in which the nominee was ClarenceThomas, a conservative darling in that he was both a Republican and an African American back when he still called himself a black man. You may remember the phrase "high-tech lynching of an uppity black man" uttered by Thomas after the testimony of Anita Hill, which recounted the then-Supreme Court nominee's ineptitude with women, his complete lack of tact in that regard and his tendency to use his power as chairman of the Equal Employment Opportunity Commission to get dates by stepping on the rights of women, none of which redounds to his credit. When Thomas lied about Hill's veracity, and also claimed that he had never even discussed Roe vs. Wade at a time when lawyers discussed almost nothing else just so that he wouldn't have to admit his desire to overturn the decision, Simpson did what he could to discredit Hill in the quest for a black conservative on the Supreme Court. Simpson was just another conservative political hack then, and he still is.

These two guys are who President Obama appointed to co-chair his "bipartisan debt reduction commission" as if either one of them knew anything about the subject. They are both Washington insiders whose attitudes in the area of finance and taxes were predetermined and easily identified. Bowles, as his biography makes clear, is a big business shill, and he served Bill Clinton as his budget liaison with the Congress during the period when welfare benefits among other things were cut, and Simpson is a dogmatic right wing politician who, about two months before the preliminary outline of the commission's report was released characterized Social Security as a "cow with 310 million tits"-- his phrase, not mine. Not to put too fine a point on it, President Obama appointed two men whose opinions on how to manage the national debt could have been written without the illusion of deliberation as their perspectives on the subject were well known and as it turns out, neither strayed from his foregone conclusions. As to their qualifications to advise a nation on such a profound problem, perhaps people with some education in economics or political science might have been better than two people who have expertise in nothing and have made careers of toeing the party line. So, it is no wonder that what they intend to propose involves reducing corporate tax rates and the income tax rates paid at the top of the income scale along with reduction of tax deductions that will hit the middle class hardest, like the mortgage interest deduction, much the same as when Ronald Reagan presided over the dramatic rise in the threshold over which middle class taxpayers had to go before deducting medical expenses from their taxes starting in the 1980's and continuing to this day. Reagan, as the conservative influences in our political arena today tend to do, characterized the changes he wreaked upon us with a euphemism: the second American Revolution...only that revolution the American people lost. This time, the debt reduction commission will apparently wind up being more like the commission of a rape, and once again, the American people will be the victims.

For example, they intend to recommend raising the age for Social Security retirement and Medicare eligibility, reducing tax deductions for the middle class while reducing the highest tax rates-- thus benefiting the richest tax payers rather than the majority of them-- and eliminating the earned income credit, which is a tax related program that actually does result in spending by taxpayers and thus stimulation of the economy. And there will be much, much more, almost none of which will any significant proportion of our society see as beneficial. It bodes so ill that there is talk of a 2012 primary challenge to President Obama if he endorses it, but we will see when the actual report comes out. Meanwhile we can all ponder how making people retire at sixty nine instead of sixty two will benefit our economy when it will result in older people keeping their jobs longer, thus denying them to younger people who will have that much more difficulty in finding jobs as the existing ones will be occupied that much longer by their tired grandparents' generation. And how, with the repeal of the health insurance reform law that the commission is also recommending, will the people who will not have access to Medicare until that same older retirement age be able to get health insurance? How will the housing industry bounce back if the mortgage interest deduction-- probably the single best reason to buy a house-- is repealed? As I said on Friday: poor quality thinking, and I'm likewise beginning to question my own thinking during the 2008 election. I'm starting to rethink my vote for Mr. Obama, and I suspect that before this is over, a lot of people will.

Your friend,

Mike

Dear America,

The role that the Tea Party Movement played in the November 2010 elections suggests that its members, albeit a loose affiliation of not-necessarily like minded people, will have a continuing impact on political life for some time-- and therefore an impact on our socio-economic structure-- that may be profound if they can act in concert and there is a consensus among them. But as is the case with any political movement that attains power, the real issue for those of us who will be affected is not so much what they think as it is the quality of that thought. Over the course of time, one can come to the right conclusion for the wrong reason once or twice, but not consistently. So the capacity to analyze our problems and then to reason solutions for them is more important than the dogma that influences the process. For example, while the Republican tendency to advocate tax cuts in every circumstance may hit the mark sometimes, as when those tax cuts are directed toward new small businesses, they miss the mark when directed at all small businesses regardless of the affluence of the owners or the duration of their existences. The statistics demonstrate that start-ups do create jobs, but only for the first five years, after which they stabilize and cease to create any more jobs than big businesses do, and the figures also indicate that half of those businesses and the jobs they created disappear within five years as the businesses themselves fail and perish. Of those that survive, their owners tend in the vast majority-- over 95%-- to earn less than $250,000, so the tax cuts for the bottom ninety eight percent do help create jobs, at least initially, but the cuts for the top two percent only enrich the rich. So a centerpiece of the Republican manifesto supports part of what the Republican conservative complex (Rcc) advocates, but it leads to the wrong conclusion with regard to another part, which unfortunately will increase the national debt by $700 billion over the next ten years-- ordinarily anathema to even them. Their reasoning is stilted because of the primacy of wealth in their chosen doctrine and as a consequence, their policies would probably do as much harm as good even by their own measures: poor quality thinking.

So, even in the two major parties, even with the advice of supposed experts, ideologues relying on unquestioned dogma sometimes reach the wrong conclusions. Conventional wisdom sometimes is not wisdom at all. Sometimes it is just intuition or self-service, but folly in the end. And when conventional wisdom serves as absolute truth, those who rely on it and do not question make mistakes. Thus, it is important for the American body politic to understand who the Tea Party affiliates are before we cast our votes in the next election if there is any group identity to understand, which is why I read with considerable interest a piece in the New York Times two Sundays ago. It was about the leader of the Tea Party in Utah, David Kirkham. He makes replicas of the Shelby version of the AC Cobra: the legendary high powered sports car from the sixties. And as it happens, the bodies of his cars are hand molded aluminum made the same way as a certain Polish jet plane's body was made. That is because, out of interest in the process, he went to Poland to see it and to meet the craftsmen who did the work. By coincidence, when he went in the mid-nineties, the communist legacy economy and infrastructure were still crumbling around the Polish people and also by coincidence, during one of Kirkham's trips there 20,000 workers were laid off. The conclusion he reached was that the layoffs were a consequence of state control of the economy, which supported his right of center concept of politics and economics. He was a Bush man, and a libertarian cum Republican. Of course, when GM and Chrysler laid off tens of thousands more as the economic crisis was unfolding, Mr. Kirkham did not conclude that those layoffs were a consequence of the free market and capitalism-- which is the problem. When the leader of the Tea Party world in Utah saw Polish layoffs, he concluded that the state should stay out of business affairs, which idea he brought forward to the bank and auto industry bailouts leading him to the conclusion that Barrack Obama was a socialist. And so, a Tea Party member was born...but probably by mistake-- his own. It never occurred to him that sometimes, demand slows and people get laid off regardless of who is making the products for which there is no longer a market. That is the quality of reasoning that we can look forward to, at least from the leader of the Tea Party Movement in Utah. By the way, while he concluded that President Obama is a socialist by virtue of those bailouts, those same bailouts caused many socialist types to think of the President as pro-business-- dogma in the form of conventional wisdom once again. You can decide for yourself who is right, if either camp is.

But from my perspective, neither camp is, as most camps are not. It goes back to something I often say: think with your own head, not someone else's. And if that does not become the conventional wisdom soon, who knows where we will end up. In Germany, the post-war administrations decentralized government so as to prevent another Hitler from coming to power. Don't misunderstand me. I am not saying that the Tea Party will spawn a Hitler-esque figure to lead us to the dastardly end that the NAZI party met, America. But it is important to understand our potential leaders' weaknesses so that we can recognize it when they lead us off the beaten path- not always a bad thing-- but in the wrong direction. Keep your compasses open, America. It's going to be a while before we know the quality of our new leaders' thinking, so don't hesitate to do your own.

Dear America,

Election post-mortems fill the airwaves and the pages of our news publications. They are replete with reproaches of The President and congress for what they didn't do, but surprisingly devoid of panegyrics extolling Republican politics, even from conservative commentators, though not all of them will be able to help themselves for long. Even Mitch McConnell, the archetype of the Republican loyalist, admitted immediately after the election that the electorate did not so much choose the Republicans as it rejected the Democrats, and all of the statistics support that acknowledgment of bipartisan failure over the past two years. But all that being said, there is one thing on which no one seems to be commenting: propaganda. The Republicans were shameless and persistent in dispersing dubious claims, and that is how they won.

The most blatant was the ubiquitous Republican conservative complex (Rcc) claim, pushed most prominently by Karl Rove and his cabal of like minded pols and plutocrats, that the Democratic health insurance reform law cut $550 billion from Medicare, which is a claim that is true in the same sense as it is true that the war in Iraq was fought over weapons of mass destruction. Rove had something to do with that one too. The fact is that Medicare's cost to taxpayers was reduced by $550 billion over ten years by the health insurance law, but that reduction was in the form of a reduction in the growth of Medicare Advantage-- not a cut in the basic Medicare program but a reduction in the projected increase in Medicare's overall cost by limiting payouts to medical care providers and insurers under the Medicare Advantage program. Medicare Advantage plans are effectively private upgrades to the basic Medicare coverage that most of us will qualify for upon retirement under Social Security or shortly thereafter, and some of them charge premiums although others just charge co-pays and impose deductibles leading to costs for the plan participant that offset some of the additional benefits paid under those plans. And while Medicare is bypassed when one is in a Medicare Advantage plan in terms of administration of most health care, the plans have to pay at least what Medicare pays. So a reduction in amounts paid to Medicare Advantage providers does not reduce basic Medicare benefits. See what I mean? Contrary to the implication of the Rove-conceived ads, the elderly are not going to see a reduction in the Medicare benefits they get from the U.S. government. If anyone will experience any change in his coverage, it will be only those in one of the Advantage plans, and they can always go back to basic Medicare or change to another Advantage plan. But perhaps millions of elderly people were scared into voting Republican by the prevarication that Medicare had been cut by half a trillion dollars: basically a canard. And it worked because of how the Democrats responded: they didn't-- not to this dysinformation campaign nor to any of the others, mostly directed at individual candidates; hence a Republican Congress will sit in Washington starting in January. By the way, cutting Medicare has been a lynchpin in the Republicans' plans to balance the budget until it became inconvenient, and incidentally, quite unpopular.

The essence of my point is that it was not strategy that unseated the Democratic minority; it was silence. And that brings me to the conclusion that I believe all of the Democrats in Washington should reach. If governance is properly concerned first and foremost with the common weal-- with the future of the people governed-- the electorate's repudiation of the Democratic Party should be immaterial to the course of the party over the next two years. What is important now is that the 110^th and 111^th Congresses, Democratic Congresses, leave their mark in the history books by preserving what they wrought during their tenure. Now, in the 112^th Congress, reelection should be the last thing that any Democrat considers when deciding how to vote on any issue. In that way, freed from political considerations, the Democratic members of the outgoing Congress can shape the future by preserving the past. And they can fetter the natural tendency of the Republican 112^th Congress-- enriching the rich and ignoring the meek-- by pushing without self-interest for the furtherance of the platform that swept the Democrats into office in the first place. They can make the Republicans state their position and then be sure that the American people clearly understand its implications. The focus of the Democrats for the next two years should be information. It should be ensuring that the American people understand how the inevitable efforts of the Republicans to roll back financial reform are a fundamental disservice to ninety eight percent of the people. It should be explaining the health insurance reform law and propounding and bringing to the floor changes of their own that will move that law closer to the universal health care program that two thirds of the people favored in 2003 when one of the last Republican Congresses did nothing about it. It should be making sure that the American people ask themselves how, if the Republicans were truly interested in serving the majority of them, they failed to create a system in which health care is available to everyone when they had the power and a popular mandate to do so, which consensus among the people obviously carried through 2008 when President Obama was elected on his promise to make that very thing happen.

In the 112^th Congress, the Democratic Party should be a true loyal opposition...truly loyal to the American people, not to any party. It may cost them another two years out of power, and perhaps more, but if the Democrats are truly the people's party, that is a sacrifice they should be willing to make: it will give them the morally unchallengeable power to do the right thing born of the freedom to act without concern for repercussions, and the Republicans will be unable to respond. Because if there is one thing we all know about Republicans it is that self-sacrifice is not among their strategies.

Your friend,

Mike

Dear America,

The Sunday morning political talk shows are always interesting; they condense and elucidate what is happening in American politics, though not necessarily in the real world. But this past Sunday they were particularly illuminating for their juxtaposing of what perhaps is the future of American politics with what has been. On ABC's This Week, Congressman Mike Pence of Indiana appeared and in response to questions about what the election meant and what has to change, he reiterated the same tired political polemic that he has employed to define himself since he first took a seat in Congress in 2001. Then, on NBC's Meet the Press, the current governor of New Jersey, Chris Christie, appeared also for the purpose of analyzing the recent election and addressing the issue of what has to happen now in our divided capital if we are ever to get out of the mess we are in. The contrast was one between what has been in the Republican Party and what will be if the party is to re-emerge, and perhaps between what has been in American politics and what will be if the American people are to emerge from this abyss.

Pence is the paradigmatic entrenched pol, not because he is a Republican but because he is the apotheosis of the American politician-- embedded like a tick in the system that both spawned him and has failed us. Whenever he is asked about an important issue, he answers with pat thematic, dogmatic, conservative conventions, and he starts his response with the word "look" as if to say to the questioner, "you don't understand, so let me explain it to you." His personal conceit-- his condescension-- is emblematic of at least his public personality, and it is what he has managed to parlay into political power: he is one of the leaders of the Republican party in the Congress. And Pence is a handsome man with a shock of close-cropped silver hair and a sartorial style that reminds me of Jack Kemp, who was a better quarterback than he was a politician. But there is a glib slickness about Pence and an apparent understanding on his part that if he says nothing of substance, he cannot be contradicted. Toeing the party line is how he got where he is today and that is how he intends to get where he is going tomorrow. Then, there is Governor Christie.

The Governor is a huge Cherub in a two thousand dollar suit and a pink striped tie who is strangely boyish and charming for an axe wielding northeastern politician. He is just now making his bones in national politics by cutting everything in New Jersey that he can reach short of the material for his next suit. He is a big man in a doughy way, and perhaps because of his dimensions, he is as non-threatening and ingenuous as a good con-man, but unlike Pence, for whom what you see is what you get, Christie is a man not just of corpulent style, but of mental substance as well. Note that I did not say intellectual substance-- only time and the success or failure of his policies will tell if he has that. But what he does demonstrate is mental clarity and comprehension. He sees what is in front of him, admits it is there, and goes directly about the task of dealing with it. There was a long needed and much vaunted tunnel project in New Jersey intended to provide another artery besides the tunnel that already exists between northern New Jersey and Manhattan, where many New Jersey citizens are employed. But while even Governor Christie says that the tunnel is needed, he stopped it in its nascency because the best the federal government would do after he threatened to do so was to pay thirty percent of an indeterminate cost and the State of New York declined to contribute anything to the project's funding. At a time when his state faced an $11 billion deficit and unemployment above the demoralizing national average, he felt that the tunnel project was a lower priority than reducing debt, even though he concedes that infrastructure projects are at least a part of the way out of our sustained unemployment and economic doldrums: a sincere position whether one agrees or not. He also vetoed the millionaires' tax that his legislature sent him, Christie says in the pursuit of fuller employment: probably an even less cogent idea, but also sincere none-the-less. He cut his state's budget by ten percent across the board and even eliminated some programs that he admittedly would have liked to keep as they were of benefit to his constituents. But he was confronted with a Hobson's choice, and he made it in full view of the voters and without apology. And when Christie speaks about these things, he does so with a fluency and a lack of coy evasion that is not just refreshing...it is remarkable in American politics today. Candor may be an ancient virtue, but I like it. And that is what is perhaps most remarkable about Governor Christie, the Republican.

I like him, too...for his candor even though I am not quite sure about his policies, to put my skepticism mildly. In fact, if I were a New Jersey voter, despite my life long progressive-to- radical Democratic credentials, I might have voted for him, and there it is. Here is a politician who doesn't say to us "look," you don't understand; I'll tell you what to do. What he says is, I am just telling you what you already know: the emperor has no clothes on. He is saying, you cannot add two and two to get fourteen much less fourteen trillion. You aren't going to like what I propose to do, but here it is anyway, and your mental substance is just as great as mine, so you and I both know that it has to be done somehow, and this is how I'll do it...this is my plan, in specific detail, and it's going to hurt. Elect me or don't. Mike Pence, on the other hand (and I name him only because he was on television yesterday, not because he is the only one who does what he does...or doesn't do what he doesn't do as the case may be) shows us a poke and tells us that we'd better buy what he says is the pig inside, but it turns out to be a 'possum when we finally get it out of the bag.

Pence is obviously eager to run for president, and Christie may be also, though not in 2012. But for my money, in a presidential election someday, I'd rather buy Christie's ugly pig than Pence's poke. Over the next two years we'll see which way the Republicans go on that.

Your friend,

Mike

Dear America,

The worst has now happened to the Democrats in congress: they lost their majority in the House of Representatives, but they maintained a majority, albeit a smaller one, in the Senate. If only they had lost the Senate too. Then we would have had a legislature completely in the hands of the Republicans and the excuses that they will surely make for their failure to rectify an economic maelstrom that is devouring the wealth of the middle and working classes would be unavailable. Now however, they will be able to point to the Democratic Senate and say that they tried in The House, but the Democrats thwarted them. Bad as it is though, they are hardly worse off than they were on Monday.

The Democratic control of both houses of congress was nothing more than an illusion. While the Republicans were in the minority in The House, it was in name only as they also had on their side most of the time the Blue Dog Democrats-- 54 ostensibly Democratic Congressmen who characterized themselves as moderate to conservative, but who were actually Republicans in Democrats' clothing. And while the Democrats held a majority of 256 of the 435 seats, the Blue Dogs aligned themselves against the party much of the time, so the Democrats held only 202 seats that they could rely on in a strictly partisan vote: a minority, not a majority. And unfortunately, the Blue Dogs used their power against their party often and when it was most important with the result that every major Democratic initiative was diluted or-- in the case of health care reform at least-- rendered unrecognizable. The President prefers a single payer system philosophically, but out of pragmatism he compromised his principles in the primaries, the general election and in the fight for the health care reform that we finally got as have many legislators, largely because the Blue Dogs and their supporters made that necessary. In so doing, the Blue Dogs drove a substantial portion of the Democratic base away because health insurance reform is not what they elected either the Democratic congress or a Democratic president for. What we wound up with might be better than nothing, but it is vastly flawed in ways in which a single payer system would not be, which alienated the idealistic few who were the difference in the 2008 election.

But of the fifty four Blue Dogs, only about twenty five will remain after all House races are finalized. The irony is that among the losers, half voted against even the transmogrified health insurance reform bill, but that was not enough to save them. In the final analysis, the apostasy of the Blue Dogs left them without Democratic support and the perfidy in their voting records did not redound to their credit with the opposition either: a lesson learned the hard way. They brought the Democratic House of Representatives down, but they sank themselves as well. So now, the Democrats are a minority in both name and substance and thus, responsibility shifts to the Republicans along with their new-found power, but as the Democrats had to manage the Blue Dogs, the Republicans will have to mange the Tea Party representatives. The worm has turned in Congress.

As to the Senate, the Democratic majority existed in the formal sense only. In the end, after special elections and delayed counts from the November 2008 election, the Democrats had a majority of 59 out of 100 seats. Unfortunately, long standing Senate rules regarding filibusters allowed the 41 Republicans to prevent "cloture" of the filibusters they threatened, and they could therefore veto any Democratic initiative unless a few of their own defected. That happened with the health insurance reform bill, but again, what eventuated was a law that is so flawed as to be assailable from many angles: a liability to those who managed to get it passed despite their good intentions. Now, the Republicans still have a minority in The Senate, but the Democratic majority has been slightly pared down to the extent that the Republicans have what amounts to a cloture proof minority. They were the fly in the ointment before the election; now they're the bat in the ointment. So, all is not lost for the Democrats. Even in The Senate, the ultimate responsibility for what comes out of the body will repose on the shoulders of the Republican minority that has presumed to dictate to the majority for the past four years and now will continue to do so but with even more bravado and audacity. Everything is on the Republicans' plate now. What remains to be seen over the next two years is how much of it will turn out to be crow.

Your friend,

Mike

Dear America,

What happened yesterday is virtually identical to what happened sixteen years ago when President Clinton went through his first mid-term elections and his party-- the Democratic Party-- lost both houses of congress to the Republicans. You may recall the Newt Gingrich era during which the Republicans stumbled through the process of determining just how far they could go on the basis of the electoral mandate they had received; it didn't take them long to overreach.

Bill Clinton was elected president in 1992, and his first mid-term election was in 1994. In 1995, the new Republican Speaker of the House, the aforementioned Newt Gingrich, decided that it was a good time for the Republican conservative complex (Rcc) to exercise what he saw as its undeniable control of the American body politic, and he united the Republican Party behind a budget that slashed federal spending in ways that were, at least to some, draconian; ironically the same issues are in play today in the areas of Medicare, Medicaid, education, the environmental and energy agencies and the earned income tax credit, which benefit's the working poor primarily. Some things never change though what each side says about them seems to. Gingrich decided that the fiscal conservative creed of deficit reduction was the dog and the common weal was the tail, and the budget his Congress passed was Gingrich's way of wagging it. Gingrich, believing that he was now the big dog, sent the budget to the White House for The President's signature, threatening that if Mr. Clinton did not sign it, the government would be shut down and his presidency would be all but over. But the identity of the real big dog was still an open question and Mr. Gingrich's gauntlet barely hit the table before The President picked it up. He refused to sign the budget into law, and Gingrich along with allies in Congress like Dick Armey, who has only recently retired from Congress, stood their ground. They said that they would not alter the budget-- that in fact they would not even shepherd through an increase in the national debt limit or a "continuing resolution," which allows the treasury to borrow money to run the government while the budget is contemplated. They would shut down all but essential services and point the finger at President Clinton.

It reminded me of when Ronald Reagan was president and he opted for the development of certain missiles that the Soviet's objected to strongly as an escalation of the arms race. To make his point, Reagan called them "Peacekeeper" missiles, but the Soviets' consternation was not assuaged and Reagan seemed almost bemused by their response to his plan. He didn't seem to understand that when you bury a hatchet in another man's forehead, it doesn't make him feel any better if you call it a handshake. And Newt Gingrich seemed to suffer the same kind of hubris: he also believed that he could make a thing into something else just by calling it by another name and no one would ever figure it out. But the American public saw that it was the Republicans shutting down the government, not President Clinton, and what Gingrich thought was at worst a stalemate quickly became a rout. The Republicans had no choice but to back down, and in the next election cycle, the Republicans lost ground, which party regulars blamed on Gingrich. By 1997after losing Congressional seats in the 1996 elections, Gingrich was blamed and he was on the run. Then, in the 1998 elections the Republicans lost more seats when Gingrich overreached again regarding President Clinton's scandals. Gingrich's support waned even from those within his own party, and by 1999, his career in Congress was over in a cloud of scandalous revelations and ethical charges. People in glass houses...you know the rest.

So, now here we are again. At this writing it seems certain that the Republicans will control the House of Representatives and that they will at least have diluted the Democratic majority in the Senate. John Boehner, who has a lot in common with Gingrich on several levels-- his moneyed connections outside of politics, his tendency to seek attention for himself and his ambition, not to mention a few others including his haughtiness-- appears to be the Speaker in waiting. At the same time, President Obama is a president with a nature similar to that of President Clinton: tending toward cerebralism, outwardly conciliatory but possessed of a determination and clarity of vision that quietly defy and ultimately thwart resistance, and also possessed of a kind of shrewd ability to assess the situation and play the right cards at the right time. I sense a confrontation that will follow a familiar pattern.

Boehner has already said that he intends to make every effort to repeal what he and his ilk refer to as "Obamacare." He claims that he intends to honor the will of the people in doing so, though he did not seem so interested in accepting the will of the people when his party was in the minority, forgetting that at least at some points during the Bush administration, two thirds of the American people or more wanted universal health care. In fact, the Democrats were able to take over both houses of congress presumably to get that and a few other things done, which would give a clever John Boehner some pause. For if he does what he proposes to do and leaves a vacuum where the partial remedy of health insurance reform used to be, which by the way is partial only because Republicans and Blue Dog Democrats resisted universal health care, how are the people who are in this new wave of support for Republican upward mobility going to take it. When they lose coverage for their young adult children and their preexisting conditions begin to haunt them again, will they turn out to be Republican partisans or just a frustrated electorate who won't take no for an answer from the Republicans either. It is important to recognize that the Republicans are held today in as much contempt as their Democratic rivals. They are not being swept into office because they are Republicans; they are being swept into office because they are not Democrats. But if the something that "Obamacare" represents turns into nothing, what then. Put concisely, given what the Republicans are boasting that they will do, in two years the Democrats may still look like half a loaf to the American people, so the Republicans better not still be offering them none.

Your friend,

Mike