June 2011 Archives

Dear America,

I find myself asking the same question over and over again. Why haven't the American people categorically rejected conservative dogma and the policies of the Republican Party and the Republican conservative complex (Rcc) that are derived from it? When their leading lights defend their position on tax increases for example, what they say seems so incredible that common sense would seem to rule it out, but they go on persistently, and the polls don't seem to reflect the absurdity of their arguments. A case in point is, Dana Loesch, who appeared on CNN with Anderson Cooper on his show, AC360, as the conservative among three commentators on the subject of the current struggle to raise the American debt ceiling. She said that the debt ceiling is not the dire problem that the Democrats say it is. In defense of her position she made two claims. First, she said that the Democrats had set four "deadlines" for a resolution in order to avoid a catastrophe that hasn't come. Second, she said that history had demonstrated that the Republican refusal to consider tax increases was supported in light of decreases in federal revenue every time the government has "seized private property" in the past.

As to the first, David Gergen, a died-in-the wool conservative who has had a high profile both in politics and in political commentary for at least twenty years, reproached Ms. Loesch in no uncertain terms for her misstatements of fact on the debt ceiling. He said that the Democrats had done no such thing, and in fact, all that the Obama administration has done is to point out on several occasions that there are some accounting maneuvers that the government can use to get around the fact that we have in reality already exceeded the current debt ceiling. But he also noted that every major economist and the experts in our financial system alike have expressed their concern about failure to raise the debt ceiling, as has the world banking community at large. As to the second, I have heard that claim before, but conservatives never acknowledge the fact that the most prosperous economic periods in the United States were in the 60's and 70's when the highest tax rate was above 70%, twice what it is today when we have a depressed and faltering economy. As to Ms. Loesch's claim that decreased taxes result in increased government revenue, Ronald Reagan, the patron saint of Republican tax doctrine, did decrease taxes dramatically shortly after beginning his first term, largely on that theory. But he then increased taxes fourteen times over the next seven years, and that is not an idle claim. Arch conservative Alan Simpson, among others, has referred to that fact when discussing the need for greater federal revenue today. A conservative on taxes like Ronald Reagan would never have raised taxes if doing so would have decreased federal revenue, which makes me wonder about the source of Ms. Loesch's claim. I assume she got her information from the same source as that from which Michelle Bachman got her claim that the founding fathers wrote elimination of slavery into the Constitution. Apparently Ms. Bachman never learned about the Civil War, not to mention the three fifths compromise, and who knows what Dana Loesch ever learned.

On the other side of the argument are people like Robert Reich, the author of Futureshock, and Fareed Zakariah, who wrote The Post-America World and now a revised version, The Post- America World 2.0. By coincidence, I heard an editorial piece by Reich and an interview with Zarariah the day after I heard Ms. Loesch, who responds to every criticism of her strained reasoning by laughing as if to dismiss her critics without having to defend herself. The contrast was profound. Reich is a master of economic data that, when cited makes clear that conservative positions on all kinds of pivotal economic issues are ill founded. For example, he points out regularly that the distribution of wealth today, with a preponderance of American wealth in the possession of the very few, is exactly like it was in 1929 when the depression occurred. Zakariah makes similar use of real data to demonstrate that there is no way for us to balance our budget without increased tax revenue, and there is no precedent on which to base the Republican resistance to that fact.

So, considering the parties to the argument, Zakariah and Reich on one side and Loesch and the likes of Rush Limbaugh on the other, who presents the more cogent argument? Well, perhaps we should consider the sources of those arguments. Zakariah has a BA from Yale and a Ph.D. in political science from Harvard, and he has written several books, hosted several television shows of a serious nature, unlike the notably unsubstantiated, blustering that characterizes Limbaugh's and Loesch's rants on their programs. Reich also has a doctorate, but in the law. He graduated cum laude from Dartmouth with a B.A. degree and studied at Oxford as a Rhodes Scholar. Then he got his JD Degree from Yale and taught at Harvard, as did Zakariah. Reich was even the Secretary of Labor. Both write for prestigious periodicals as well and appear as authorities in their fields and commentators with expert knowledge. But somehow, it seems that Loesch and Limbaugh, who don't have a bachelor's degree between them, have broader influence than either of these thoughtful and qualified men.

I have often said that we should think with our own heads rather than with someone else's, and I continue to believe that. But information is still the sine qua non for a well formed opinion. And if we are to be influence in forming our own opinions, we should insist that our mentors be well educated, informed and rational. I must confess that I have read neither Reich's nor Zakariah's latest book, but I intend to. I will not allow either of them to think for me. But at least I will know when I assess what they say that they are capable of thinking for themselves...unlike some others I have heard lately.

Your friend,

Mike

As I have previously noted, I am preoccupied with Social Security and what the Republican conservative complex (Rcc) is trying to do to it. The Social Security Trust Fund contains something on the order of $2.6 trillion--that's trillion with a "t"--but the federal government has borrowed all of it, and the Republicans in congress complain incessantly because now, they have to pay it back as we all might have expected since they played a major role in spending it. The long and short of it is that Social Security is the only federal government program that funds itself and has money on hand for decades of its cost. It is not in any way part of our debt or deficit problem, but the program lent the federal government its money and is now therefore a target because the federal government doesn't want to pay its debt. If we were dealing with a bank, someone would be going to jail for such a scheme, but since we are dealing with Republicans, they seem to have some kind of immunity. Still, we cannot let them get away with this without a fight. So, while I have had to cut back on the frequency with which I write to you by limiting myself to Monday and Friday, I have written to you several times about Social Security, and I feel that comments made about the Republicans and their plans for the program bear repeating. thus, for the foreseeable future, I will reprise those letters on Wednesdays with the thought that someone who missed them might be interested in Social Security too, and in what it means to us as a nation as well. Here is this Wednesday's reprise, which is about Medicare rather than Social Security, but the issues are more or less the same: my letter of November 10, 2010.

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,

When I last wrote to you I was focused on the problem of the sincerity of the Republicans and the Republican conservative complex (Rcc) when they say that their intention is to serve us, especially when they oppose regulation of those who seem to be preying on us and arrogating the wealth of our nation to their own purposes. And I find myself reluctant to harp on such themes as I am the last to know, as I have said before, when my indignation goes from criticism to rant. But I happened to read two pieces in Sunday's papers that piqued my indignation on two counts.

First, there was an article about natural gas and the rush to invest in it that has been inspired by the gas industry and industry analysts over the last few years. The thrust of the article was that the industry's future was not as surely rosy as it projects based on the new techniques and discoveries of resources connected to shale, that is, gas in the rocks below the surface of the land. The first problem is the safety of the technology used to recover the gas from the shale. The process is called fracking, which is the shortened form of the name for the technique of hydraulic fracturing in which chemical laden water is pumped at high pressure into the rock formations in which the gas is trapped and then recovered because the water has been turned into toxic waste that has to be disposed of, sometimes in amounts of a million gallons or more.

The second problem with natural gas from shale is that more toxic waste might be worth it for enough gas to last the thirty five to sixty years that industry experts forecast originally, but it appears that their estimates are at best dubious, and at worst akin to the speculations about the profitability of the market for electricity on which Enron thrived before it misappropriated the money of its investors and failed, and just to be clear, that is not my characterization. It was uttered by a retired industry geologist who worked in gas exploration. It now appears that the long term production of the wells in the fields that were supposed to be so enormous as to constitute energy independence is not escalating as they projected, but is rather declining far sooner on a well by well basis than the technical experts predicted that they would. So the yield from these "plays" as they are called may have shown promise at the outset, but that promise has quickly been demonstrated to have been nothing but an unfounded hope. While proponents of natural gas and shale in particular continue to be optimistic, like T. Boone Pickens who talks it up as the salvation of us all every chance he gets, neither the performance of the industry nor the science of it seems to support their optimism, so much so that some emails from industry insiders used phrases like Ponzi scheme to describe the gas boom. Yet, no one seems interested in regulating the flow of unjustifiably optimistic information about natural gas on which tens of millions, if not billions of dollars are being raised from unwary investors just as they were during the .com era and then the housing boom. Remember credit default swaps?

The third problem is the reason for the eagerness with which this boom was greeted by those in the areas from which our natural gas comes and where the gas shale deposits are located. It was a respite from a steep decline in gas prices half a decade or so ago that resulted in job losses and general hard times in the industry. The price of gas fell, presumably because of the surfeit of supply relative to demand, which should have been welcome news for those who got at least a part of our energy from natural gas...like me. But I saw no decline in my gas bill any time, much less five or six years ago when this period of hardship for the gas industry occurred. In fact, as Enron's stock price soared on claims that electricity was in short supply, the same kind of economy of scarcity pervaded all energy including natural gas. Our bills went up and stayed up, continuing to climb until this day while the prices of gas production and pipeline company stocks declined with the profits they could reap. But again, no one seems to have been interested in the regulation of the gas industry, though the Enron scam taught us all enough to result in competition within the electricity industry in Connecticut. Now, while the power companies continue to be able to use their delivery systems to provide service to the exclusion of all others, they have to allow other companies to provide the current and competition has set in, thus bringing the price of the electricity we use, and hence our bills, down significantly. But apparently the gas industry had a better lobbyist because no such thing happened with regard to natural gas...not nationally and not in Connecticut either. That's what deregulation yields for the consumer: profits for the industry with no need to explain why the price always moves up, never down even when market conditions would seem to merit lower prices.

And then there was an article about a bridge being built in California for the San Francisco-Oakland Bay Bridge...by Chinese workers in Shanghai. They are now building the last four of more than two dozen segments of the bridge with a road bed about fifty yards wide. They will be towed across the Atlantic 6,500 miles from where they will be assembled to create an American bridge. And whose fault is it that the jobs making those assemblies onto which the road bed will be poured here in the United States were given to Chinese companies? The government of California, led by former Republican governor Arnold Schwarzenegger who specifically oversaw the choice to build with a Chinese company, that's whose fault it is. They claim to have saved hundreds of millions of dollars with their decision to outsource the construction of the $4 billion bridge's superstructure, but the jobs lost were the price of the savings. A Republican government in an American state oversaw the process of trading thousands of jobs for skilled workers over the course of four years to the country that Republicans constantly tell us all to fear for their assault on the world's economy. A little short sighted, don't you think? Not to mention the fact that the tax revenue from all the wages that those thousands of workers would have earned over the course of the project were lost while the state paid many of those workers unemployment benefits instead of collecting the tax revenue. Let me repeat. A little short sighted, don't you think.

My point is one I have made many times. We should think with our own heads, not someone else's, and that means judging our politicians on what they do, not what they say. The Rcc and the Republican Party tell us that deregulation is the way to go while we see unregulated industries gutting our economy in one way or another over and over again. And with regard to job creation, they favor it only when there isn't someone somewhere else who will work cheaper. And the proof that such is so is in the fact that just before the November election, a bill reported out of a Senate committee to reward companies for bringing jobs back to this country from abroad with tax incentives, and penalize companies who ship their jobs overseas with tax penalties, was prevented from passing by the Republican minority's threat to filibuster the bill. So it is up to us to decide our future. We go back to the polls in November 2012. I can hardly wait.

Your friend,

Mike

Dear America,

The Republican conservative complex (Rcc) is focused on several enduring tenets of conservatism: reduction of taxes, the paradox of individual freedom from government control concomitant with acceptance of government control when it coincides with their theocratic morality, promotion of personal liberty except for those who do not conform to the norms to which they subscribe, and proliferation and promotion of business, especially by opposition to regulation. And in this last regard, their platform begs questions of various types, but they all distill to one issue: whose side are they on. Yet, no one seems to be publicly asking the Rcc to defend its decisions as to whom and what courses of conduct to defend. We are still suffering through the greatest financial and economic crisis this nation, and in fact the world, has seen in eighty years, and the conduct that precipitated this cataclysm is not some arcane practice indulged in by some star chamber organization. It was derivatives traded by the biggest and best known financial institutions in the world, most of them American, that caused this catastrophe, and the manner in which they did so was entirely public. They assumed risk that they could not bear, and when the risk was manifested in consequence of other practices in which they all had indulged, that is mortgages granted to millions of people who couldn't pay them, we had to pay the "financiers" off to keep them from ruining us completely. It was extortion. Yet, the Republicans, the minions of the Rcc, continue to resist financial regulation even though a body of law has been passed to mandate it. And in the course of resisting the law itself before it was passed, they decried the inclusion in the statutory scheme of a fund paid for by those very institutions whose reckless activities had made the law necessary, and they prevailed over a diffident Democratic majority in both houses of Congress to prevent its creation. They told us that they were against taxpayer bail-outs of these companies, and when a law was proposed requiring the companies to insure themselves so as to obviate taxpayer bail-outs, the Republican Party made sure it didn't pass, and they did it with their bare faces hanging out. Still, no one called them on it, so a diminished safety system to prevent another calamity like the one we have just suffered was the result, that and Republican success at the polls last November. But not all of the questionable policies favored by the Rcc and pursued by the Republican Party are about money and protection of business. Some of them are about life and death.

Two weeks ago, the federal government issued warnings about two materials that virtually all of us are exposed to on a daily basis: formaldehyde and Styrene. Formaldehyde is regarded as a carcinogen-- a cancer causing agent-- and it is present in all kinds of products from plywood and particle board to hair care products. Anecdotal reports received by OSHA (Occupational Safety and Health Administration) of hair salon workers who were exposed to formaldehyde-containing products suffering headaches, nose bleeds and vomiting among other symptoms resulted in an April 2011 warning, and the incidence of cancer among mortuary workers exposed to embalming materials containing the substance supports the report from the National Toxicology Program at NIH (National Institutes of Health) on which the decision to issue the warning was based. The American Cancer Society agrees, noting that because of the ubiquity of formaldehyde, all we can do is minimize our exposure when possible, by choosing safe building materials for example. As to styrene, exposure is far less toxic in the levels to which we are exposed on average, but those who manufacture boats, car parts and bathroom tubs and showers are exposed to Styrofoam in bulk, and thus there are reports of increased risks of diseases like leukemia and lymphoma. And given all of this, the reaction of the affected industries has been...to reject the report claiming that it will "unfairly scare workers, plant neighbors and could have a chilling effect on development of new products" in the words of Tom Dobbins of the American Composites Manufacturers Association. Commerce is the guiding principle at work in business, and as this particular conflict between business and science demonstrates-- representatives of industry have been fighting to prevent the warning since NIH's last report, which hinted that this warning would be forthcoming-- human health, at least as it affects workers rather than management, is a secondary concern. Yet, in the face of such disregard for the health and welfare workers and the public, the Republican Party still opposes environmental regulation as a matter of principle, and does all it can to impede the activities of the Environmental Protection Agency.  And then yesterday the Republicans stood up for those who have the most again, business in particular.

As almost everyone knows, Vice President Biden as the representative of the executive branch has been meeting with members of Congress to try to forge an agreement on deficit and debt reduction, and among the issues he is trying to get considered is tax reform: not tax increases but tax reform. The focus of the Democratic contingent in the meetings has been balancing Republican advocated budget cuts, which have so far weighed most heavily on those who can least afford them, with adjustments to the tax code that would alter or eliminate what are euphemistically called tax expenditures: special deductions for industry and business that have eventuated over the course of dozens of years of lobbying, mostly of Republicans but of members of both parties over the years. Some prominent examples have been in the news lately like tax deductions for oil companies when they explore and farm subsidies for corporate farms of enormous size and profitability as well as millionaire farmers who are often paid not to cultivate their land, and these are just a few of them. And yesterday, House Majority Leader Eric Cantor, one of the most appallingly unctuous men in politics in my opinion, walked out of the meeting because the Democrats would not abandon their call for these tax code changes. Then House Speaker John Boehner endorsed Cantor's high handed fiat by saying, as he often does, that tax increases are "off the table." By the way, he also said that the announced release for sale of 25 million barrels of petroleum out of the 725 million in the Strategic Petroleum Reserve that is being matched by the other oil consuming countries would threaten national security, though in consequence of its minimal proportions all it really threatens is the margin accounts of speculators who buy and sell oil futures for profit, not for utilization, and thus have driven the cost of gasoline and fuel oil through the roof.

So, from everything the Republicans say a pattern emerges. When they must choose between protecting the American people from harm and protecting money, they protect money. That may seem terribly blunt and undiplomatic...and it is. Further, the time for subtlety and diplomacy has passed. The Democrats have defined a position on the balancing of the budget to the effect that it will not be accomplished by dismantling every socially responsible program that the Democrats of the past eighty years have managed, over Rcc objections, though the Republicans want just that. And that is the long and short of it. Now that it is clear whose side the Republicans are on, we as Americans must decide as individuals whose side we are on. It is that simple, and it will be that simple still in 2012.

Your friend,

Mike

As I have previously noted, I am preoccupied with Social Security and what the Republican conservative complex (Rcc) is trying to do to it. The Social Security Trust Fund contains something on the order of $2.6 trillion--that's trillion with a "t"--but the federal government has borrowed all of it, and the Republicans in congress complain incessantly because now, they have to pay it back as we all might have expected since they played a major role in spending it. The long and short of it is that Social Security is the only federal government program that funds itself and has money on hand for decades of its cost. It is not in any way part of our debt or deficit problem, but the program lent the federal government its money and is now therefore a target because the federal government doesn't want to pay its debt. If we were dealing with a bank, someone would be going to jail for such a scheme, but since we are dealing with Republicans, they seem to have some kind of immunity. Still, we cannot let them get away with this without a fight. So, while I have had to cut back on the frequency with which I write to you by limiting myself to Monday and Friday, I have written to you several times about Social Security, and I feel that comments made about the Republicans and their plans for the program bear repeating. thus, for the foreseeable future, I will reprise those letters on Wednesdays with the thought that someone who missed them might be interested in Social Security too, and in what it means to us as a nation as well. Here is this Wednesday's reprise: my letter of August 6, 2010.

Dear America,

As all of you know, Secretary of Health and Human Services Kathleen Sebelius announced yesterday that the "Medicare Trust Fund" will be solvent for a few more years-- until 2029 the trustee now says-- because of the new health insurance reform law. And Social Security will also be solvent, until 2037, though the "Social Security Trust Fund" will begin losing money this year: similarly, Medicare in all its forms is approaching that kind of reversal threshold but later on down the road. Still, the talk of the town, Washington, D.C. that is, is that those programs will cause the deficit, that is the shortfall of revenue to cover any one year's budget expenditures, to grow based on one proposition: Social Security and Medicare account for one third of all federal expenditures. What's wrong with that statement?

What's wrong is that Social Security and Medicare benefits are not federal expenditures. They are our expenditures, America. Those benefits are paid out of the trust funds I just mentioned, which we endowed as individuals with our money, dedicated to one purpose only: the funding of our retirement income and elder health care needs. The money is not just earmarked; it is ours. The federal government writes the checks, but they are drawn on our trust fund, just as the retirement needs of our plutocrats are funded by their trust funds, only not only did daddy fund our trusts, we funded them too. So how does our drawing on our trust funds increase someone else's, that is the federal government's, deficit? Here's the answer: it doesn't. True, the federal government borrows every dollar we pay into the trusts until one of us becomes eligible under the terms of the trust and wants to collect his money, but the money itself, the IOU from the feds, belongs to us, not them. So, if the Rcc wants to claim Social Security spending as a problem, the first thing they have to do is to convert Social Security from a program funded by its own trust to a general fund program funded by tax dollars. I am in favor of that by the way, but until it's done, the Republicans and the Rcc have to keep their hands off our money. They can't both claim the right to confiscate some of our benefits and force us to be the only ones to endow a "trust" from which those benefits are paid and which they don't supplement when it runs dry. In other words, they can't both eat our cake and have it too.

My point is that the Republicans and the Republican conservative complex (Rcc) are constantly ranting about reducing federal spending by cutting entitlements. That's code for cutting Social Security and Medicare benefit eligibility, among other things by increasing the retirement age. But they never explain how reducing our rate of expenditure of our money helps to mitigate the national debt and the budget deficit. They are not talking about borrowing that money-- they've already done that. So what do they mean? Well, my guess is that they are just using Rcc speak to say that they don't want to contribute to those programs anymore: they want to keep their money and manage for their own retirements and old age, you know, like they didn't do before The Depression, which necessitated the New Deal and Social Security in the first place. They want to privatize Social Security and Medicare so that we can all be rich in our old age. They want us to invest in big business, like in the stock market for example (can you imagine where we would be if we had all had money in the market instead of in the Social Security Trust Fund). But most of all, they want to blame someone other than themselves for the mess we are in-- it's misdirection, my friends, misdirection, and a red herring in the bargain. Reducing "spending" by reducing Social Security benefits in particular will serve no purpose but to take money out of the stream of commerce-- we have less to spend so less gets spent. They never mention that back half of the proposition, and presumably, if they get their way and benefits are reduced, they will find another source of the common man's weal to take so as to undo the next financial catastrophe born of greed. And there will surely be one because that one third of federal spending about which they complain goes directly into the chain of commerce: for the most part, people on Social Security don't have the resources to bank their monthly stipends. They spend the money, albeit on frivolities like food, clothing and shelter, but they spend it. So, once again, what the Rcc is advocating is the very petard by which we will all be hoist one more time if they get their way: a bullet aimed not just at their collective foot but at ours as well.

It is remarkable that people who have such an interest in money, particularly their own, have no idea where it comes from. In a recent article written for The Nation, an admittedly liberal journal, Robert Reich, the bearded, diminutive economics gnome who was the Labor Secretary under former President Clinton, opines that the problem with our economy is that the rich are too rich. The money they count does not go into the stream of commerce the way that unemployment benefits, average earnings, the fifty bucks grandma gives your kids when they graduate from college, and yes, our Social Security benefits do. That is an observation more than a theory. It's only common sense. No jobs come from a rich man stashing more money in the trust fund for his soon-to-be rich kids.

So, I have but one song to sing to the Rcc, and it's about self-preservation-- their self-preservation as well as ours. It is not the supply side that drives the economy. It is demand, stupid. Please join me in the chorus, America.

Your friend,

Mike

Dear America,

Last Thursday I was perambulating through the television channels, what Newton Minnow, the chairman of the FCC during the '60s called a "vast wasteland"-- which indeed it seems to still be-- when I came across Newt Gingrich addressing some conclave of his faithful. I didn't stay long as I find Newt just as confident in his own afflatus as, but much more pontifical than, The Pontiff himself. But I did stay long enough to hear him say that socialism had failed demonstrably worldwide. He claimed that such was the case as socialism had "run out of other peoples money to spend," attributing that idea to Margaret Thatcher as if the fact that she said it makes it true. Apparently she, like Gingrich, is unaware that the United States pays at least half again as much for medical care as any nation that has socialized medicine, for example. And so, what occurred to me as I heard him say this preposterous thing was that he seems authoritative when he speaks because he quotes conservative legends whose failures have long since been forgotten as if they had never occurred, and he cites their ideas as axioms as if their vintage made them such. Unfortunately, his party faithful accept that tactic as validation of what they believe and they vote accordingly. It also occurred to me that there was palpable irony in his remark as, whether socialism has failed or not, capitalism definitely has and the economy of the world is proof...and for the very reason to which Newt attributed the failure of socialism: America's rich, financiers in particular, have run out of money to spend...our money. They produce nothing, help no one, and make money by making money, the same way that Paris Hilton is famous for being famous. But that money comes out of our pockets both directly and indirectly, publicly and sub-rosa. And when I realized that, I wondered how many other observations Newt the Sage had made that were actually as applicable to what he holds most dear as they are to anything else.

Then he added that the inheritance tax should be abolished because no politician should be able to take half your money from you when you die, and I realized that I was right. What Newt was actually saying was that he believes that you should be able to take it with you when you go...not a very Christian idea I think, not even for an only recent convert who is just learning the ropes, and certainly not a commendable sentiment for the Republican conservative complex (Rcc) to fly on its banner, though they do so with glee. But politicians don't take money from people when they die anyway. They tax the heirs to the proceeds of estates because they did nothing to produce that wealth and the idea of being rich because mommy and daddy were is as disagreeable in this country as the idea of being famous for being famous or making money by making money, or reducing taxes on tea to drive out smugglers for that matter, which is what really caused the Boston Tea Party. Further, we don't elect people to be president just because they were once Speaker of the House any more than we give titles to sons because their fathers had them. And that is what is wrong with Newt's version of the Rcc philosophy. We've been there and done that. That's why our forebears all came here. So, the fact that Newt Gingrich was part of the Republican aristocracy in 1995 is not going to get him nominated for president in 2012, nor will ideas whose time never has come.

It is significant that the Sunday talk shows, while they talked about every other candidate made no mention of Newt Gingrich. Even Rick Santorum, who has virtually no ideas, not just bad ones, got more mention than Gingrich did. And now that Michelle Bachman seems to have gotten everyone's attention for her performance in the Republican debate last week, there is no need for another player out in left field. What does remain to be seen is whether the Republican Party will lean right toward the Tea Party types-- Bachman is the only viable one now, but Texas governor Rick Perry (whose claim to fame is that he created jobs in oil-soaked Texas, something like creating a lot of snow balls at the North Pole) seems on the verge of joining her-- and set up a scenario like the 1964 election. If the Republican Party faithful remember Barry Goldwater, who like Perry and Bachman spoke the language of about twenty seven million Americans, an enormous audience, they will remember that it couldn't overcome the forty three million member audience of Lyndon Johnson. And then the majority will stay somewhere in the middle of the spectrum when they choose their candidate, which will likely be Mitt Romney, or maybe even John Huntsman, but it won't be Newt Gingrich. My guess is that Newt will figure it all out and by the beginning of 2012 he will be gone from the campaign trail after fading away for six months or so. He'll eventually opt for Greek vacations and six figure lecture fees and forget about the thankless task of running a country. Oh well. No great loss.

Your friend,

Mike

Dear America,

This past Monday, President Obama gave a speech at a company called CREE, which manufactures LED lighting in North Carolina, once again at about lunch time when he could be sure that no one was home to listen. In his speech he revealed his enterprise advisors' advice to him as to how to stimulate American growth and lead us back to prosperity. It entailed more of the same things that the Republicans have been advocating, some of them good things, like training workers with an eye toward the future and encouraging education of young people for professions and trades for which we will have use in the future. But then there were the stock references to reducing regulation, alleviating the purported lack of confidence in American business and tax incentives to induce business to expand and hire. It was disturbing, but not for what was said; we have heard all that so often now that even though it is an insult to our intelligence, it is no longer anything more than a banality. It was what wasn't said, as if The President doesn't read the papers anymore, that disturbed me.

In this past week, data has come to light indicating that business has spent approximately thirteen times more on machinery to increase production than it has on new personnel over the past year and a half. And the disparity is attributed, at least in large part, to tax incentives-- Mr. Obama's idea-- for such capital investment. In other words, at a time of high unemployment, we are encouraging our businesses and industry to automate by giving them tax breaks for doing so, and we have stopped spending money on government sponsored projects that are labor intensive. That isn't helping. Even those interviewed from the manufacturing sector of our economy by the authors of the report, which was summarized in the New York Times, are saying that they have taken advantage of these times and the government's largess to streamline their operations, thus eliminating jobs...permanently. The report estimates that in light of that fact, and referencing the last time this kind of trend occurred-- the recession of 2002-- it will take ten years for our economy to recover from the most recent recession/depression, from which we are still suffering mightily after two years. And despite these facts and one that he even acknowledged in his speech-- that American business is sitting on an enormous pile of cash-- The President wants to do more of the same: no release of oil from the strategic petroleum reserve to punish speculators and aid the average family in meeting its obligations, no extensions of unemployment compensation, no New Deal-like training programs like the CETA program of the seventies in which long term unemployed people were retrained and helped to find jobs in their new trades...just more of the same things he has done lately. You know the things I mean. The things the Republican conservative complex (Rcc) recommends, which our president acquiesces in so as not to offend anyone by looking like he won't capitulate...I mean compromise.

I remember hearing a definition of neurosis that went something like this: doing the same thing over and over in spite of the always negative consequences. We have a neurotic president if that definition is accurate. And we have a neurotic Congress. And the halls of academe are full of neurotics too. We keep sticking the same finger in the same fan and hoping that a different result will occur, and then we vote for the people who told us to do it. Charles Blow said in his editorial in last Saturday's New York Times that the American people needed to recognize who was really on their side and vote accordingly, and I wholeheartedly agree. The notion promoted by the Rcc that this stagnating recession is a function of business' lack of confidence is nothing but a self-serving canard perpetuated by those whose patrons benefit from it. And its illogic is demonstrable. What business man or woman would refrain from hiring people to make goods they can sell today for a profit because he or she was concerned about having to lay them off in two years when tax cuts expire and the Affordable Care Act kicks in? Put another way, what evidence is there that anyone would refrain from making a dollar this year because he might not be able to make one two years from now? And if there were people like that you could never prove it because only a fool would admit to thinking like that and no one is going to admit to being a fool in a survey. And the notion that business needs tax cuts is equally irrational. All such tax cuts would do is put more money in the pockets of businessmen and women who already have pockets full of cash, but none-the-less have failed to do the public spirited thing and hire back those whom they have laid off and whose jobs they have sent to India and China...or to Mexico like Callaway did with its Massachusetts golf ball factory.

And then of course there is this obsession with regulation, which The President apparently now endorses. It has been less than two years since the lack of regulation of the financial industry allowed those people to plunge the entire world into an economic maelstrom that is still spinning us downward. Yet even our president seems to think that we need to reduce regulation so as to allow business more freedom...kind of like saying that the fox isn't yet full of our chickens, so let's give him better access to them so that he'll get full and stop eating them. Who thinks like that way? Or more to the point, is anyone in the White House thinking at all? And we have the Rcc fighting regulation of the oil industry in the same year in which they polluted an entire sea, which pollution the Rcc also complains about. We have them complaining about laws regulating inefficient, energy gobbling incandescent light bulbs because they like them, but they complain about energy policy at the same time. The worst part of all this is that I, like many other liberal to progressive voters, will likely vote for President Obama in 2012, not because I think he is doing a good job, but because he is doing less harm as a simulated Republican than a full-fledged Republican president would do. That the two parties don't really offer us any alternatives is not quite the death of the two party system, but I do think that common sense among politicians has one foot in the grave.

Your friend,

Mike

As I have previously noted, I am preoccupied with Social Security and what the Republican conservative complex (Rcc) is trying to do to it. The Social Security Trust Fund contains something on the order of $2.6 trillion--that's trillion with a "t"--but the federal government has borrowed all of it, and the Republicans in congress complain incessantly because now, they have to pay it back as we all might have expected since they played a major role in spending it. The long and short of it is that Social Security is the only federal government program that funds itself and has money on hand for decades of its cost. It is not in any way part of our debt or deficit problem, but the program lent the federal government its money and is now therefore a target because the federal government doesn't want to pay its debt. If we were dealing with a bank, someone would be going to jail for such a scheme, but since we are dealing with Republicans, they seem to have some kind of immunity. Still, we cannot let them get away with this without a fight. So, while I have had to cut back on the frequency with which I write to you by limiting myself to Monday and Friday, I have written to you several times about Social Security, and I feel that comments made about the Republicans and their plans for the program bear repeating. thus, for the foreseeable future, I will reprise those letters on Wednesdays with the thought that someone who missed them might be interested in Social Security too, and in what it means to us as a nation as well. Here is this Wednesday's reprise: my letter of February 14, 2011.

Dear America,

After watching a little bit of the C-PAC convention here and there on television, I am stunned by the realization that there is a fair sized segment of the American population that will believe anything if the right person says it, and without even the need for a rationale to justify it. I saw a few minutes of Mississippi Governor Hayley Barbour's speech to the convention in which he alternated between cheerleading for the conservative cause, maligning the Democrats and President Obama, and postulating the same old notions about taxes and prosperity that are articles of faith in the conservative camp, but that seem preposterous when examined. He said that a dollar that an entrepreneur is taxed is a dollar less that he will spend on job creation, necessitating the corollary that a dollar by which his taxes are decreased will be spent on job creation. But during the Bush administration over the seven years of the Bush tax cuts, and for the first six months of the Obama administration during which those tax cuts were still in effect, the country lost eight million jobs. And now that the tax cuts have been renewed, while some jobs continue to be created, they are not nearly enough to even match the increase in the need on account of growth in the population of work-desiring Americans, much less to offset the number of jobs we have lost. Barbour's explanation apparently is that it is anxiety over what tax rates will be in two years that keeps business from getting off its $2 trillion pile of cash and creating jobs, presumably because business would rather hold on to money than make more of it for the next two years in light of the fact that they might make less starting then. Well I don't know about your understanding of the wealthy in America, but I never heard of them foregoing an opportunity to make more money now because they might make less money later. They are not creating jobs because they find that they can do just fine without doing so by breaking the backs of the workers they already have.

Barbour, the dough faced Yazoo, Mississippi lobbyist and lawyer-cum-career-politician son of a lawyer father who has been a Republican operative since the mid-60's, doesn't seem to realize that the fact that he has had his prosperous life handed to him doesn't mean that everyone can be prosperous. It never seems to occur to a person like him that he was able to get the job of running the Mississippi census at the age of twenty two not because of any particular talent but because of patronage and nepotism devolving from a hundred years or so of his family's participation in good-ole-boy politics. And further, like most Republican conservatives, his ostensible belief that the rich will take a paternalistic interest in the rest of us and make sure that we get what we need never seems to get any scrutiny from him. That's probably what made him an effective lobbyist. He never feels the need to say I'm sorry. But Barbour is just one of many conservative politicians who are as much caricatures as they are anything at all. Their rah-rah, summer-camp-counselor style of politicking seems more like a skit on SNL than it does a real political campaign, but it is a menace to this country none the less. Barbour will not be the Republican candidate for president in 2012, though that might well be what the Democrats would hope for. And neither will Michelle Bachman, whose what-we-need-is-to-make-Barrack-Obama-a-one-term-president speech and the response to it made it clear that the CPAC convention is a pep rally, not a serious political event. But those two plus Sarah Palin, Newt Gingrich, Ron Paul and a few others are a harbinger of the tidal wave of materialistic self-interest and presumptuous didacticism that is about to wash over the United States of America. They are the advance force of an army of the sanctimonious who want to tell us all what to do and how to live in the name of liberty and democracy. They feel they have the right to wrap themselves in the flag, and thus they would make it unpatriotic to challenge them and their beliefs, but in reality, that is the greatest threat to American democracy. It always is, and that is why there is a constitution in this country. What they do not understand is that it exists not to protect their effort to dictate that the rest of us subscribe to their pedantic beliefs, but to prevent them from punishing us for refusing to allow it. Still, behind that curtain of moralistic certainty sits the real danger. The wizard of Oz is not Hayley Barbour, it is the hedge fund managers, the real estate moguls and the "captains of industry" who actually guide our course. The plutocracy is the danger, not the self-righteous minions who think they are doing God's work. The monied oligarchy will use the Barbours and the Bachmans as foot soldiers, and before the rest of us know it, Social Security will no longer have a trust fund that fully funds the program decades in advance. Medicare will be a luxury that we can no longer afford despite the hundreds of billions that the government has borrowed from its trust fund. And the funds that have been paid by all of us in advance for those programs will be absorbed into the general fund so that the money borrowed from the trust funds will no longer be part of our national debt, thus solving a big part of the our national bookkeeping problem by simply tearing a page out of the ledger.

On Friday, Mark Shields and David Brooks, the former a liberal and the latter a conservative, appeared as they almost always do on the PBS news program to offer their comments on the week's events. One of the topics was the reinvigorated debate over the national debt and the federal deficit. Brooks expressed his opinion that there had to be serious discussion about reducing "entitlements" before there could be an earnest effort to address our fiscal problems, Medicare and Social Security in particular. And when Shields responded, he pointed out to Brooks that Social Security was self-funded for decades, and thus has no role in the discussion, which ironically is what Bowles and Simpson said in their report for the President's debt commission though Simpson seems to have forgotten that just as Brooks has, assuming that he read the report. But I am willing to bet that Brooks will go on citing Social Security and Medicare as part of the debt problem without ever explaining, or even asking himself, how a program that is so well funded that it has been able to lend the federal government trillions of dollars can be an element of the national debt. His mind is set and his heart is following, just as all of the cheering soldiers at CPAC were doing last week. America, we have a problem.

Your friend,

Mike

Dear America,

Rick Santorum, the latest to declare for the Republican presidential nomination, was interviewed by David Gregory on Meet the Press yesterday, and if he is part of the cream of the right wing of the Republican Party, the right wing of the Republican Party is in terrible trouble. A former senator from Pennsylvania, Santorum is a fundamentalist on every social issue and a dyed-in-the-wool conservative dogmatist when it comes to money and those who have it. As to his Christian fundamentalism, there is a significant constituency in the United States to support those opposed to abortion and in favor of school prayer and religion-based absolute morality. The issues to which his beliefs obtain are not susceptible of resolution by argument as they are matters of faith, which by its nature is not subject to reasoned refutation. But as to conservative fiscal and economic dogma, while there may be arguments to be made, they are looking quite vulnerable to refutation at the moment, and the successful conservative will need to have some creative new ideas if he is to persuade anyone that maintaining wealth in the hands of those who have it is the key to everyone's prosperity. As to Rick Santorum, he is the archetypal politician, and like Mike Pence, Mitch McConnell and John Boehner, he can reiterate the party line, but creativity is not his strong suit.

It seemed that Gregory was coddling Santorum in both tone and substance as the interview began, and I was incensed at first, but as the interview progressed, Gregory's almost obsequious attitude became more understandable in that Santorum seemed ever more cornered by even the rudimentary questions he was being asked. It was almost as if Gregory was embarrassed by Santorum's near complete lack of ideas other than the patter he has been spouting all of his political career. Near the end of the interview, Gregory made note of the fact that business is sitting on an enormous pile of cash, and he asked Santorum if giving them more money in the form of tax relief was really going to change anything. All Santorum could do was to spout the party line about confidence being the impediment to further investment and job creation, to which Gregory responded by reiterating the point to which Santorum had made virtually no reference, only in simpler form: if they already have so much cash, how will giving them more cash stimulate them to create jobs. Santorum's face seemed to reflect a sense of having been cornered with no way out, and his response confirmed that such were indeed his feelings. He essentially repeated his first nearly scripted answer, apparently unable to come up with anything remotely relevant much less original, and Gregory moved on, seemingly out of pity. If you will excuse the irony, Santorum doesn't have a prayer.

Among the Republican declared candidates there are essentially two classes: those with the potential to swim in the main stream, and those who can't go any deeper than the favorable currents from which they take the momentum they think they have. Rick Santorum is in the latter group, much like Sarah Palin, Tim Pawlenty and Michelle Bachman. They believe that the fervor that they see in a fringe minority, including the Evangelical right and the Tea Party, translates into a larger groundswell in electoral terms. And as long as that idea is not tested, they remain viable in their own minds, which is good for the Democrats. The Republican true-believer primary voters as a group may make the mistake of believing them too, as they did in 1964 when Barry Goldwater was the party's nominee. But though a candidate from that far right can appeal to a majority of the right-of-center Republican body politic, in the general election, which will include voters from all across the political spectrum, the right-side primary majority translates into a general election losing minority. These righteousness candidates, if I can coin the term, will make the primary debates interesting, though I predict that after he participates in his first one, Santorum will recognize that he has exceeded the limits of his potential and he will drop out. However, Pawlenty, Ron Paul and Bachman are sufficiently narcissistic and sanctimonious that they will delude themselves and keep it a contest with Newt Gingrich and Mitt Romney leading them into the convention, but not by enough for them to forget trying to play a role in defining the Republican platform, and if we're lucky the result will be a Democratic return to the White House and to majority power in both houses as a derivative of the overreaching of a few conservative zealots. So in general, the Republican Party is headed in all the wrong directions. But overall, I must say that I am quite pleased.

Your friend,

Mike

Dear America,

I sometimes feel as though I am the only one thinking what I am thinking about the American political scene. But every time that feeling begins to suffuse my thinking, I read or hear someone else saying exactly the same things that I write to you about. In an editorial in the New York Times, Charles Blow wrote about the nearly boundless prosperity that American business has enjoyed over the past year and a half as the people who make business possible, you and I, have struggled and continue to do so. He quoted a June 6 Time magazine article pointing out the fact that U.S. annualized corporate profits over that period rose 42% to a record $1.68 trillion in just the fourth quarter of 2010, the period just before oil speculators began driving the price of crude oil up 32% in four months, presumably adding impetus to the rise in corporate profits for the quarters to come. He reiterated those figures after noting that Citizens for Tax Justice found that twelve Fortune 500 companies paid income tax at a rate of negative 1.5%, meaning that tax loopholes, shelters and special tax considerations had completely mitigated their tax burdens. His point was that the Republicans have taken an indefensible position with regard to tax increases, given these and other factual considerations, noting in the end that "The full stealing from the plates of the starving simply isn't an American ideal," Mr. Blow's words not mine, though I do wish I had said them.

And earlier this week, Bruce Babbitt, the Clinton administration Secretary of the Interior and former governor of Arizona, gave an interview prior to a major speech he was about to give. In that interview, he decried the Republican effort to neutralize the Environmental Protection Agency and to gut environmental regulations for the sake of business and business profits. He was specific as to particular efforts on their part, which made his position almost irrefutable, and then he went on. He not only vilified the Republicans and the Republican conservative complex (Rcc), he rebuked the Obama administration, and President Obama himself for their failure to confront the Rcc effort and join the argument in full public view. He said essentially what I have heard several other commentators say, and you probably have too: that President Obama is too busy worrying about reelection and reconciliation, abandoning Democratic principles in the name of continued incumbency. And here I had been wondering why I was the only one talking about these things. It is not only me, and perhaps it is even tens of millions of us Americans saying the same things about how our president is leading our nation...from behind the closed doors of the oval office. No bully pulpit for him.

The real problem had its inception in the Congress. First, the House of Representatives failed to pass a bill extending the middle class tax cuts to the exclusion of the cuts for the top 2% until after the November 2010 elections. They had the votes before the election, and for a month afterward, but by the time they did pass those cuts, they didn't have the time to push the Republicans in The House out into the street with their position on the subject. That allowed the Republicans in The Senate to unabashedly killed the bill with the threat of a filibuster-- not with a filibuster, but with the threat of one-- and they then proceeded to get exactly what they have wanted since the first Bush tax cuts were pushed through a Republican Congress in 2001: to perpetuate them despite the fact that the Democrats in that Congress managed to get an expiration date included in that first bill. It seems that the Republicans knew their adversary when they yielded on that point...that the Democrats lacked the will, and more importantly the fortitude, to take them on regarding the issue when the expiration date came, and the Democrats didn't disappoint them. They only disappointed us, their constituents. And they continue to do so.

And the Republicans continue to parley their winnings into greater glory with every opportunity. They passed the Ryan budget with its draconian Medicare cuts effectively vitiating the program in its entirety, and they have already paid for it in at least one election in which a New York district that was heavily Republican turned Democrat and elected a new Democratic congresswoman despite a formidable lead for the Republican until the Ryan plan was announced. But they turned the popular repudiation of Ryan's plan into gold by pointing out that the Democrat controlled Senate has failed to provide any of its own ideas on the budget even though they have been working on it for two years. And even after the Republicans started asking for a better idea from the Democrats, they have been too timid to report out of their budget committee a budget created by its Democratic members because it includes increasing taxes on the rich and Harry Reid, the Senate Majority Leader, is afraid that there will be a backlash from the Tea Party if the budget goes public. They would rather be accused of having no idea how to proceed than make a good proposal for doing so and letting the chips fall where they may.

You can tell that the Republicans are the party of business by their tactics: bait and switch. During the four years of the Democratic majority in the House of Representatives, the Republicans whined incessantly about the majority purportedly ramming legislation through The House without considering the Republicans' ideas. They demanded compromise, saying that the Democrats' failure to offer it was the reason for Congressional inertia, but what they really were demanding was capitulation. And in the end-- in the lame duck session of Congress that led to an agreement to extend all of the tax cuts, even for the rich-- the Republicans got everything they wanted. They hailed it as a compromise while the Democrats simpered obediently and nodded in agreement, but in reality they had laid the bait and made the switch. In reality it was not compromise. It was capitulation, and that has been the theme of the second two years of the Obama presidency. He brought business insiders into the White House to advise him. He expresses accord with the Republican mantra about tax cuts, especially for business, even though business has all the money it needs and hasn't done the right thing with it yet. We now have a one party system, and that will be the downfall of the Democratic Party if its members don't see the light soon. It comes to this. If all we can get is business friendly Republican types, even from the Democrats, why bother voting. Because in the end, as long as there is a filibuster rule in The Senate, our votes don't count anyway, and the Democrats refuse to cast theirs.

Your friend,

Mike

Dear America,

Our political system has spawned an attitude that makes political success an end in itself: a small tail wagging an enormous dog. For example, Mitch McConnell, the Senate Minority Leader, has bluntly stated that his goal during the 112^th congress is to prevent Barrack Obama from being a two term president, which is why the Republicans in The Senate united to prevent several things from happening legislatively. But then they allowed those things to occur during the lame duck session, demonstrating that McConnell's docile Republicans had heeded their master's call with the purpose of obstructing the Democratic effort-- not the vindication of any principle, just the thwarting of the Democrats. The Democrats have likewise dug in on issues like the prioritization of tax reform and debt reduction after other social goals, and while I agree with them in large part, the fact remains that something on the order of 40% of every federal dollar spent is dedicated to what those in Washington, D.C. call "servicing the debt," otherwise describable as paying interest on money we have borrowed as a nation in the past, the point being that if we had 40% more money to spend, we would not have to be in constant political disarray over issues of social conscience.

The significance of these facts is that on issues like health care reform for example, the two major parties, and now the Tea Party sect of the Republican Party as well, have dug in their heels and refused to analyze the problem that the recently passed health insurance reform law was supposed to address. Similarly, with regard to Social Security the Republicans have lumped in decremental spending from the Social Security Trust Fund-- which has started already-- with the national debt when there is really no connection between the two in principle. The fund will be exhausted in 2037 and fund revenues from payroll taxes will no longer support current levels of benefits, but we have twenty seven years to adjust and prevent that in order to avoid the insolvency of the fund, and in the interim, we pay for our benefits week to week out of our collective earnings and our savings in the fund. In other words. the federal debt has not increased by a penny on account of Social Security, and it won't until 2037 at the earliest, and even then, the only addition to the national debt caused by Social Security would be federal general fund subsidies to the fund to sustain levels of benefits over and above payroll tax income-- an event that will never occur for several reasons, discussion of which would just confuse the issue now. But discussion of the problems of Social Security solvency and health care reform in general could yield solutions that would be not just acceptable but desirable for both parties if they would only set aside partisan victory in favor of popular wellbeing.

For example, with regard to health care there is no way around the fact that it costs something in excess of 15% of the gross domestic product every year according to the U.S. Department of Health and Human Services. At the same time, other governmental organizations that have studied the issue have concluded that our health care is more expensive than that of any industrialized nation in the world yet does not make us any healthier than any of those other nations, if we are as healthy as they are at all. While our system is first in responsiveness, we are lagging behind in areas like infant mortality, average life span and broad accessibility, and we pay nearly one and a half times what Germany does for that poor result, even more compared to many other advanced nations like Canada and Britain. In all of the modernized nations that have single payer systems, including those with universal free government health care, the overall result is better than it is here, yet the conservative attitude-- the Republican attitude in particular-- is that the right to choose how to avail oneself of healthcare is more important than universal wellbeing, and that the cost of such health care is prohibitive, which is just not so. But beyond that point is one that no one discusses. If our health care system were supported by taxpayers, business would no longer be the primary funder of health care in the form of insurance paid as fringe benefits for workers. So, while the Republicans rant about corporate tax levels, they could be increasing corporate revenue by 15% if they would only agree to universal public healthcare. Such a change would dwarf any corporate tax reduction that this country could afford, but apparently winning a propaganda war against the liberal political establishment is more important than reason when it comes to this issue.

And then there is Social Security. Even The President's commission on debt and deficit reduction admitted, in its preliminary report at least, that balancing Social Security funds with expenses was an end in itself and was unrelated to balancing the federal budget and reducing the national debt. But the Republicans, and even some Democrats continue to talk about Social Security as a "budget buster" when the fact is that if those hundreds of billions of dollars available to the retired and disabled under Social Security's aegis were no longer being spent in our economy, our current severe economic problems would be far worse. In addition, we would have the kind of pernicious poverty that doesn't just make people miserable, it kills them. However, the simple act of raising the earnings level at which you stop paying additional payroll taxes for Social Security, even on a declining sliding scale, until it quenches the benefit needs of the baby boomers who will be retiring and retired for the next twenty years or so would balance the fund with its obligations. And after that twenty years, chances are that those increases in funding could be reversed as the post-World War II spike in our population declines in its impact on Social Security in consequence of the end of the normal life spans of those beneficiaries. In other words, the Social Security balancing issue could be addressed with something akin to a temporary inconvenience, and in addition, the need for a general fund contribution to the fund would be obviated and the money in the fund could continue to be a pool of capital to be borrowed at a reasonable rate to finance the rest of the nation's fiscal needs. But then, there would be no fire for the Republicans to hold the Democrats' feet to. Again, political victory supplants the common weal as a priority, when all it would take to make everyone happy is a little thought, which makes me wonder. Why can't our politicians play nice like good boys and girls? Wouldn't it make even them happier if they did? Children: what can you do with 'em...except vote for other children.

Your friend,

Mike

MichaelWolf@letters2america.com

Dear America,

Last week, Treasury Secretary Geithner met with freshmen Republicans from The House to discuss raising the debt ceiling. At that meeting, one of these congressional neophytes felt it necessary to point out to The Secretary that "we didn't create this mess," presumably referring to the massive debt that they all seem self-righteously committed to diminishing. And by we, he presumably meant the freshman Republicans in the room, as he could not possibly be referring to his party since half of the national debt was generated the last time that his party held both houses of Congress and the Presidency at the same time. So, these fiscally pious pilgrims to Washington apparently see themselves as fit to chasten the nation with their peremptory attitude on the debt ceiling regardless of the consequences as they do not fear the electoral consequences. That is probably good for the Democratic Party, and they may well know it, but they are too blinded by sanctimony to care. And then there is the Republican commitment to thwarting financial regulation, presumably on the premise that they have a mandate to do so even though more people distrust Wall Street than regard it as an American asset: also good for the Democrats. There is the refusal to raise taxes on business and the rich on the pretext that doing so would be inimical to job creation as it would deprive business of capital and aggravate the crisis of confidence in the business community. They seem to think that we will continue to accept the notion that this deep financial crisis is all a function of attitude and that if we just reassure businessmen by giving them tax breaks, they will be reassured of...something and begin to create more jobs with that money, even though they haven't create those jobs with the $2 trillion that they are now sitting on. That too is good for the Democrats, so why can't they relax. The answer in two words is: gas prices.

The role that gas prices will play in the next election will not be limited to the personal financial effects that their heights have directly imposed on us average Americans. We feel the pinch, but most Americans know that energy policy affects supply years down the road, and thus the refusal by the administration to grant drilling permits until the safety of the process of drilling can be assured will not result in inculpation of the Democrats. Nor will advocating elimination of tax breaks for oil companies. In fact, no policy position relative to oil itself will change the outcome of the 2012 election. But the indirect effects of the high price of energy will be profound, and the Democrats, President Obama in particular, will pay an enormous price for the fortunes being made by speculators world wide at the expense of the consumer unless they do something. The Republicans blame increased demand by other nations for the high prices-- they always resort to contrived shortages to defend profiteering-- and some of their die-hard supporters will believe them, but the precipitous nature of price increases will belie that argument, and the Democrats will harness that rhetorical advantage with ease, but it will not be enough. However, even though the electorate will not hold the Democrats responsible for oil prices, they will be blamed for the persistence of the recession and for the number of unemployed if they do nothing about oil prices, because oil prices are killing the recovery by depressing other consumption. Money being creamed from the economy by speculators does not fuel either consumer spending or oil production. It just decreases the supply of spendable dollars-- consumer equity-- which depletes the economy as a whole because two thirds of gross domestic product, not to mention inventory expansion, job creation and income growth, is a function of consumers spending money, and they can't spend money that they don't have because speculators expropriated it.

So the question is, what are the Democrats to do, and specifically, what is President Obama to do. There is only one answer, and opting for it is the key to the Democrats retaking the House of Representatives, keeping control of The Senate, and retaining the White House on the one hand, or failing to and losing it all on the other. The Strategic Petroleum Reserve has to be tapped, and pretty damn quickly. Only carnage on the trading floor among those who buy and sell oil that they cannot use will vouchsafe the Democrats' victory next year. And to keep their control of the nation's course, they have to outlaw the purchase of oil futures, at least in this country, by all those who cannot take delivery of the oil itself. It is that simple. Drive prices down by producing a minor glut of oil with 100 million barrels of reserved oil, and then another if necessary, in order to address the current problem so that the American people will be able to spend more on goods since they will be spending less on oil. Jobs will again begin to be created as consumer spending improves and unemployment will again begin to decline. Then, the Democrats must move to outlaw the conduct that created these high prices to prove to us all whose side they are on, which will make the Republicans' fealty to big business insuperable for them.

It is time that the Democratic Party drew its own lines in the sand rather than letting the Republicans do it. This is an issue that we can all understand without technical analysis or political dogma to explain it. It is time for the Democrats to show their colors and stop cowering in the corner that the Republicans have pushed them into. As the old saying goes, they have to lead or follow, and if they choose the latter, they might just as well get out of the way.

Your friend,

Mike

Dear America,

Home ownership has been the keystone of the average American's wealth for decades, and probably since before the United States of America was a nation. One of the primary appeals of emigration to the new world was the availability of land for those who would have it and develop it as they saw fit. Land ownership imbued the owner with social station, wealth, financial security and a legacy to bequeath to his progeny. And even in the second half of the twentieth century, home ownership was so desirable that it was among the inducements, in the form of loan guarantees, offered to American men to fight and die in national conflicts. Congress after congress promulgated law and programs designed to encourage and enable home ownership and it became not just the keystone of the individual American's wealth, but of the nation as a whole. The construction industry is among the fundamental supports in our nation's financial structure as a provider of jobs, capital, federal, state and local tax revenue, as a damper that has lessened the impact of negative economic trends by providing reliable economic activity as well as a reliable repository in which to accrue wealth for those who have bought houses and effectively stored their wealth in their family homes. For at least half a century, fortunes could be lost in business, the stock market, futures and commodities trading, entrepreneurship, and virtually all other segments of the American economy, but that wealth in which we have lived our lives was always secure. It was safe from the predation of hedge fund managers and nefarious bankers as well as economic vicissitudes beyond the control of anyone. We have been possessed of fortunes in which we could live and flourish and raise our families with a sense of security in a place we could call home in spite of most any adversity, but not any more. Bankers were trusted members of the community in those days. Not any more.

Surveys of Americans from various sources done in various ways have demonstrated with fair certainty that the ownership of a family home is no longer a universally held goal. The advantages of home ownership-- including the apparently moribund home-mortgage- interest tax deduction-- seem to have fallen by the wayside. Instead, ownership of a home has become as much a source of financial distress as the closing of the local plant in many cases. The persistence of the value of a home as a primary asset on which a family's prosperity can be based is no longer even a likelihood, much less is it the certainty that it was once regarded to be. At first blush this reversal of what has probably been the most enduring of populist American beliefs about wealth may seem of only modest import, but modest is one thing it is not. The housing industry has been the backbone of our economy for a long time, but if the current trend in the attitude about home ownership continues, that will likely never be the case again. Just as we no longer make the worlds textiles, its steel, or even its tires, we will no longer make even our own houses, at least not nearly in the numbers of the past. We will have one less industry to sustain us, one less repository for our wealth, and that much less access to wealth because the family home has been the largest part of the average American family's wealth for a long time. And with its demise as a measure of success and financial security will come the demise of other things we will miss, among them the abiding belief that at least that modicum of wealth that a home represents is available to virtually aall who apply themselves to the task of getting one. And the irony in this turn of events is its internecine effect. Those whose profiteering-- and that is probably the kindest word for what those holding financial power in this country did to us-- resulted in the current economic distress, distress that they have not seemed to suffer so far, will eventually befall even them. Our economic system, that is American capitalism, is a revolving process. No part of the economy can exist without the vast bulk of the other participants. Those who consume provide demand. Those who supply provide goods for consumption. That is how natural wealth is created. But those who merely make money by manipulating it create artificial wealth, which is in reality nothing more than taking a steady flow of equity out of the system, thus depleting it of its energy and ultimately its life's blood. And that is where Republican doctrine fails. It is rooted in the notion that natural wealth and artificial wealth are the same thing.

It is from this misguided axiom that the Republican conservative complex (Rcc) derives all of the other misguided concepts that guide it. Equity cannot be created from thin air. And that is why those who create nothing but prosper by financial manipulation are engaged in nothing short of chicanery, and the rest of us pay the price; that "wealth" that they claim to create for themselves is in reality the equity of others diverted from our economic system. And that diversion makes the system hostile to all those who do not control it. The very few build billion dollar fortunes out of mortgage failures, foreclosures, bankruptcies, retirement accounts lost in the stock market, usurious banking practices, obscene compensation for those in power in our corporations and for those who buy and sell the theoretical equities that our stock and bond markets trade as if a hedge fund is anything more than a casino for the affluent, who it appears can never have enough. That is why this new attitude about ownership of homes is an ill omen even for the rich, though the Rcc will certainly fail to see it. But whether they acknowledge it or not, it is the beginning of the end of the neo-capitalism that lauds predation as a route to prosperity. And those of us who do not live in the rarified atmosphere of the new robber barons need do nothing in order for what they refer to as a class war to occur. It is happening now. For decades, the Rcc fought the Glass-Steagall Act and finally prevailed against it during the Clinton administration, and the repeal of Glass-Steagall is something that will always taint Bill Clinton's presidency, but no matter. Despite that debacle, which created a new generation of financial wildcatters who have gorged themselves on America's wealth, the worm will now turn. They have made the rules for decades, but the American people are now saying that if that is how the game is to be played, they are taking their ball and going home. And the surprise that the affluent minority in our country are in for is this: without the ball, there is no game.

Your friend,

Mike