Thursday, July 19, 2012

Capital and Tax Cuts for the Wealthy

A concept that Republicans push and have done so for the past 35 years, is the idea that targeted tax cuts for the wealthy will trickle down and affect the economy in positive ways, through business expansion, job creation, etc. This idea is hinged on the fact that those in higher tax brackets put a higher percentage of their earnings into investment than those with more modest incomes. This hypothesis is certainly true, particularly at the low end of the income range, where every dime goes to pay for food, housing, healthcare, etc. Where this hypothesis runs into trouble is with the fact that investment capital is highly mobile. Investments may not take place in ways that help the country that instituted the tax cuts. The tax savings could just as easily go to swiss bank accounts, or to Bahama based equity firms, which in turn funnel money to companies that employ workers in Taiwan, China or Indonesia. Even individuals with their 401K such as myself, may have some money tied up in overseas international funds. The point I would like to make, is that as a national tax policy for generating jobs or revenue, there simply is too much leakage of the money that was meant for investment in American jobs from tax cuts provided for the very wealthy. It should come as no surprise, that the economic crisis that we are clawing our way out of occurred after several years of significant cuts to the highest marginal rate for federal income tax, as well as a reduction in the capital gains tax. If the Republican hypothesis for national economic growth is true, our unemployment rate should be at an all-time low. The fact that it isn’t belies the fact that the simple solution of tax cuts for the wealthy does nothing for economic growth, but everything for explaining the growing disparity in our country between the well off and those who are struggling. It also explains the shrinking middle class. This is why I suspect that Mitt Romney does not want to release his tax returns. Like many businessmen who took advantage of the favorable tax treatment they received from the George W. Bush administration, I think you will find that Governor Romney’s money trickled down, but not to U.S. taxpayers. I suspect, it made its way to tax safe havens and from there invested in jobs overseas. If this is the case, and I am Mitt Romney, I wouldn’t want to release my tax returns either. I think that Mitt Romney will use every excuse and every diversionary tactic that he can to not release his taxes, because beyond Mitt Romney’s own personal finance, it would expose the fallacy of Republican economic policy. It would show how many jobs that Mitt and his millions shipped away from our shores, to Communist China of all places. The ironies of such a reality would expose what Republicanism is all about in our common era, a move to an autocratic State controlled by the few. The Republicans have their own propaganda network, their own funding mechanism and a trainload of divisive social issues to work with. It has worked very effectively for many years. At what point will the pain, humiliation and economic decline of the masses be enough to make them see that they’ve been duped? I have no good answer for that one.

Thursday, August 11, 2011

Chaffetz and Lee- Specifics Please

There continues to be press about teabagger darlings Chaffetz and Lee getting accolades for opposing the debt ceiling legislation as not being aggressive enough on spending. That being the case, I have one simple request for these guys, detail what you would like to cut and how much those savings will accrue through time. Certainly they wouldn't just make blanket political statements without having something specific in mind to cut. Is it social security? Is it medicare? What is it? People have a right to know your intentions.

Or is your intention purely political demagoguery? If I am not making it financially, I would look at a breakdown of my expenditures. I would weigh my options. I might consider working a second job to bring in additional revenue. This is how grownups deal with the real world. Nothing so far has shown me that Mike Lee and Chason Chaffetz are grownups. They live in a magical world of pure ideology. If we just do this magical thing (cut taxes and reduce spending(whatever that is)), there will be prosperity in the land and all will be well in Zion, errr, America.

Magical thinking and public policy are bad combinations. Perhaps Rep. Chaffetz and Sen. Lee have some concrete cost savings they aren't telling us. Until they provide their own realistic solution, I can only conclude that they are merely second rate demagogues living detached from reality. I hope they prove me wrong.

Tuesday, August 2, 2011

Crisis Averted

That will be the headlines. “Crisis Created and Nearly Implemented” is what should be the headline. This was the fruits of the 2010 elections. Republicans, who for years had no problems with massive deficits, and as a matter of routine increased the debt limit without blinking an eye, now took aim on deficits during a Democratic Presidency and an economic recession of Republican making.

The cause of the deficits is really pretty simple. You have a nation at war, that doesn’t want to pay for it. You have a nation that has made commitments to its seniors, who when it has become too expensive, has decided not to fund it.

The Republican solution for everything is to lower taxes. Their hero Ronald Reagan did that and they revere him to this day. Ronald Reagan lowered taxes and began a massive re-armament of the military that resulted in a substantial growth in the deficits. Ronald Reagan’s major complaint against Jimmy Carter was his massive $64 billion deficit. In response to Republican criticism, Carter had already reduced taxes. Reagan once in office massively reduced them while never committing to any politically difficult cuts, such as in medicare or social security. And Reagan did this during a period of high interest rates, leveraging the country at a high cost for future generations.

Fast forward to the teabag led revolt against common sense. These people are from my generation and I know where they got their political compass. They understand half of Reagan’s legacy, but not the other half. People prone to make heroes out of people are very capable of selective memory and self-delusion. Mike Lee, Jason Chaffetz and their ilk live in this delusional world of hero adulation, and have lost touch with reality. They created a crisis that didn’t need to be out of shear misreading of history and what it means today.

Running deficits is not the best idea, certainly of the magnitude we are running currently. However, these deficits are being made during an economic downturn where interest rates are low. Tax cuts for the wealthiest Americans which have been preserved in the fatally flawed compromise that even right-wing nutjobs like Mike Lee voted against left those cuts intact. The Republican reasoning for lower taxes for the wealthy is that they are the ones likely to invest money in our economy. However, capital is mobile. Much of the tax cuts implemented by George W. Bush went to real estate, and to foreign investment, areas that had little lasting impact on our economy. The manufacturing sector of the U.S. economy continues to suffer while we buy cheaply made goods from China. This is the real problem we face. Not some mythical creeping socialism in the paranoid minds of Mike Lee, Glenn Beck and others.

This bad deal didn’t need to be made. Action is needed, but not the actions that are being taken. If the economy turns around, the deficits will shrink. This deal lessens the likelihood that the economy will turn around. And this is the result of right-wing black-mail. To quote James K. Galbraith from Salon “This deal validates the making of real policy under the appearance of extreme threats. That process will not end here. And while Social Security, Medicare and Medicaid escaped in the first round, they are set up to fall in the second. The deal creates a new junta to force those cuts before the end of this year. The process is repellent, cruel, undemocratic, and designed to leave blood on the ground but not on anyone’s hands”. From self-deception, comes self-destruction.

Tuesday, April 26, 2011

So What Has Happened?

I have not written much in a while and have spent more time asking people I know of all stripes questions in order to try to understand where they are coming from. Obviously, I'm not tuned into the "tea party patriots", "biblical constitutionalists" and other right-wing movements which dot our landscape and I am at a loss to understand what is going on with the mindset of so many in our ailing Republic. There are several themes I've gathered listening to people and hearing them out.

First- the government is the enemy. No one ever uses the term "our government" any more because "the government" has become a catch all scapegoat for all that ails people. All problems can be twisted into "the government did it". Corporations move operations overseas, and the problem is "government regulations made them do it or environmental policies are driving our jobs overseas."

Second- "they" losely defined has taken over "our country" (not government) and "we" need to take it back. "they" seem to be a conglomeration of minorities, liberals, feminists, non-Christians, etc. There is this "they" out there that is a powerful coalition that wants to make our country some mamby pamby, lovey dovey country of intellectuals and slum dwellers. I'm still digesting and analying what's going on here, but it is quite bizzare.

Third- Manifest Destiny version 4.0 After westward expansion of America ended, in the 19th century (version 1.0), imperialist expansion via Spain's crumbling empire (add Hawaii) (version 2.0) and American Cold War Hegemony (version 3.0), we now find a new trend in America. The idea of America as a vessel for Protestant Christian culture has been reborn in Manifest Destiny version 4.0. George W. Bush tried this with version 3.5, but bungled it with his ill-thought out invasion of Iraq. This version has worked out the bugs of the premature release and has more traction behind it. This is the pure form, ideologically rich with symbolism and not as tainted with the greed of version 3.5. The world should fear this version.

Fourth- Timidity among the left- If you lead, people will follow. There has been a lack of leadership on the left that has left movements to the right relatively unchecked. The President's willingness to compromise has compromised his mandate. Liberals and moderates wonder who it was they helped to elect, and why is he letting nutcases walk all over him. They cling to Jon Stewart and Colbert to give them to calcify their spine. If you've got to go to Comedy Central for your political edification, you are in trouble.

These are just some of the trends I see. Like my credit score, "it ain't good." But atleast I know, it wasn't the government's fault my credit score ain't good.

Thursday, October 28, 2010

The Future of our Republic

The future of our republic will be decided elsewhere. Utah's essentially single party status has made them irrelevant to national politics and merely play a role as defining the outer reaches of conservative and nativist extremism that's possible if the Republican noise machine succeeds nationally.

Places like Illinois, Wisconsin, California, Nevada and Pennsylvania will likely determine whether the Democrats continue to control the Senate, and a broader belt of midwestern and far-western states will determine whether they control the House. The Mormon belt and the Bible belt are now the solid red bastion of conservative extremism, and is it any wonder, that these areas are also those areas with the most devout followers of fundamentalist religious faiths? Correlation doesn't always equate with causation, but I have a hard time not linking these two.

My concern is long-term about the future of our country. Keyne's maxim that "in the long run, we're all dead" may be true, but I have children, nephews and neices and I care about future generations of our country. If we are to create creative solutions to the problems of today, and to our future, we will need to as a society have a great deal of attributes antithetical to religious or political dogmatism. We will need flexibility, creativity, accountability and transparency. Religious dogmatism is anti-thetical to all those things that we will need to create the best solutions to whatever problems we face in the future.

The feedback loop goes as such- people during periods of stress and uncertainty, look to ideologies that provide certainty. These ideologies result in poor solutions to pressing problems which results in greater stress and uncertainty, followed by more dogmatic adherence to certainties. This is what I fear for our country. Eight years of Bush created a disaster economically and morally for our country. Conservatives response to this has been that the problem was Bush's lack of adherence to "true" conservative principles. Conservative ideologies, like a drug to an addict, provide escape from reality but temporary comfort, but provide a scarcity of creative solutions to the problems we face as a country. And like an addict, when the addictive behavior creates more problems, the solution is more of the drug.

We face an intellectual and moral crisis in this country. Those who look backwards into the past for solutions to the present limit our options and bind us with inflexibility. This is the paradigm I see in Mike Lee and tea partiers. And I don't believe me and my little blog will make a difference in the intervention our country desperately needs if we the people, will take responsibility, and look to flexible solutions, not dogmatic myths about ourselves. The politicians are a symptom of a problem that goes much deeper. It lies in us, the American voter and people and our susceptibility to demagoguery and delusion.

The answers to our problems are rarely simple. Let's move forward looking for the best solutions, not to dogmas based on authority. Progress in our Republic is still possible, but I fear this election will stunt our growth and bind us for generations to come. I hope I am wrong.

Monday, October 18, 2010

Question for Republicans

I want real answers, not the usual Republican spin about “waste and inefficiency” that is in government. Republicans have controlled the executive branch of government for 20 out of the last 30 years. It was the Democratic President, Bill Clinton who finally brought the deficit under control, but let’s spare that debate for a second. Let’s look to the future. Republicans want to continue the W. Bush tax cuts. What specific expenditures are you willing to cut to pay for it? I WANT SPECIFICS (note, we liberals try not to use all CAPS when writing because it makes us look like angry conservatives, but I’m willing to meet them half way).

The vast majority of the federal budget is in the areas of social security, Medicaid, Medicare and National Defense. Once you get beyond these areas, any material cost savings (ask your Republican accountant friends what material means) will have to come from these areas if they are to really affect the deficit. Spending through earmarks barely show up as a factor compared to the obvious elephants in the room. So what is it? Do we cut the military? Social security? Medicare? Tell me. Keep in mind that baby boomers are now beginning to retire and the projected costs of social security and medicare are only going to increase, no matter what inefficiencies you business geniuses can find.

So what is it? As a car buyer, I’d like to know what is under the hood. Is it a four, six, eight cylinder, or lawn mower engine? Or is this just the typical Republican "cut taxes and borrow" engineless Lamborghini that looks so good in advertisements, but doesn’t exactly get me to work? My eyes are weary from watching posturing teapartiers and other clueless know-nothings yell at the top of their lungs that government needs to be reined in. Well here’s your chance. Chaffetz? Lee? Bishop? Rein it in. Specifically what are you going to cut? Is there any engine in this car you’re selling, or do we need to get Fred and Wilma to show us how it really works.

Thursday, September 9, 2010

More Bagging on Tea Partiers

Insanity is defined by some as doing the same thing over and over again and expecting a different result. Terminal insanity is doing more of the same because the problem before was you didn’t take a pure enough form of the drug. Tea-party Republicans are like alcoholics, deciding that the pinot noir version of conservatism was insufficient, and we need to go to straight bourbon, or in the case of Sen. Inhofe, only vodka without a chaser.

Self-destruction is often the result of self-deception. How true this is of today’s xenophobic, conspiracy mongering, Beck worshipping, followers of nonsense peddled from the Marketing Firm of Piddle, Pooh and Woo (aka Fox News). The age of enlightenment had a brief and tenuous re-birth, only to awaken the demons and demagogues who may have faced a temporary set-back, but have not changed their goals and aspirations.

This being said, I acknowledge that the tea partiers come in different stripes and many in the corporate elite are worried. There is a populist element to this uprising that should worry them. For years, your corporate Republicans have worked hard to sell middle-class Caucasians of voting against their own economic interests in favor of corporate interests by diverting their attention with social issues and by fostering cultural wars. Their success has now created a monster that may devour them as well. TARP, was as Republican as a flag lapel pin, and many Liptonites don’t subscribe to that brand of Republicanism. Where will all this sort out in the backrooms of Republican-ville, I can’t tell at this point.

During September of 2004, I had the pleasure of meeting with Sen. Bob Bennett and listened to him tell our group that his election was assured, and that it was going to be a Republican year. He rather smugly indicated that social issues were going to doom the Democrats this year. I thought it rather arrogant at the time that he considered his re-election a matter of fact with two months to go in the campaign. Even so, Bennett was an effective Republican senator who represented corporate interests as well as any good conservative could. He was pragmatic enough to work with others to make sure Utah got its share of funding projects for things like roads and public transit. Replacing him will be an ideologue who has more passion than wisdom, whose devotion to irrational dogma is not out of political opportunism, but out of deep-held belief. This new brand of Republican believed Reagan’s rhetoric, never seeing that the rhetoric was purely a political strategy rather than a recipe for good governance. And he will represent one vote in fifty in our Republic. And there are enough like-minded individuals who could join his ranks, that those of us devoted to enlightenment ideals should be very concerned.