On the Contrary

Remember that our conservative friends were totally against the stimulus bill.  Then they loaded it up with tax breaks saying that only creating private sector jobs would do any good.  Now they are saying it failed to create the number of jobs promised.  Apparently all those tax breaks weren’t all that effective.  What was effective were the jobs that were not lost in each of the states, especially teaching jobs due to stimulus money.  So let’s just think this through.  You know, apply logic instead of emotion and ideology.  Remember that except for three Republicans, the rest wanted to do nothing.  “Let them eat cake.”

First of all let’s look at cutting taxes to stimulate the economy.  If we were in a mild recession, this might not be a bad idea.  If people weren’t loosing their jobs, then giving business an incentive to hire or replace equipment might be an effective way to stimulate demand.  But in the current situation, there is no demand because the economy is shrinking* and people are losing their jobs.  Why would I hire someone or replace equipment for demand that does not exist?  In other words, in an extreme recession, why would I take the risk on expansion when there is no one to buy my increasing inventory?  I would venture that if you made the tax rate 0% right now, it would not have any impact except on Wall Street where they bet on derivatives, not create capital for new businesses.

Let’s just take little old me as an example.  When I get a consulting check, I sock 37% away for taxes that I have to pay quarterly.  37% is what I have computed over the years to make sure I don’t owe anything come April.  Now if you reduced my taxes from earnings to zero I would have a nice chunk of change I could spend, and so the theory goes, I would stimulate the economy with this spending.  The trouble with this simple minded conservative thinking is I would not spend it.  Times are tough and I am not sure when the next job is coming so I want as much money stashed away as possible as a pad for the future.  No stimulus there. This is generally what economists will tell will happen with tax cuts in a severe recession, but if the only thing you know how to say is tax cuts, then, well, you prescribe it no matter what.  It’s all you got.

So if demand is shrinking, and tax cuts are not going to stimulate private spending, what you have left is public spending.  Oh how conservatives hate this.  The usual complaint is two parts.  It increases the deficit and government jobs are not real jobs that sustain the economy.  So let’s take one at a time:  It is very true that this spending will raise deficits, but so will tax cuts.  Either way the effect is the same on the deficit and our treasury.  Oh but private jobs are self-sustaining while government jobs are dependent on continued spending.  Well, yes and no.

First of all there are no private jobs to be had and they are shrinking.  So the government has a couple of choices.  It wants to stimulate the economy by giving the economy money that will be spent.  That means you give it to people that will spend it, people on the margins.  That generally means you fund state programs.  That is why the job numbers created are teacher’s jobs that would have probably been cut.  You also fund help for indigent (social programs) and that money is also spent.  Is that stimulative?   Of course it is since those people spend money that fuels private sector jobs.  Without it, many more jobs in the private sector would have gone away just further shrinking the demand and the problem.  Same result is achieved with construction/infrastructure projects.  The benefit of this kind of spending is that not only do you at least keep the economy working, you get something for your money, either in your kid’s education (teachers jobs), or needed infrastructure improvements.

To the question of are these make-work jobs that are dependent on continued government spending, the answer is not really.  The government is trying to maintain the services and infrastructure improvements to stimulate the economy until the tax base can once again support these critical services.  The private sector is moribund.  There is no other option.  Well that’s not quite true.  You can follow the conservatives lead and just let the economy collapse and sooner, or more likely later, things will restore themselves.  The collateral damage is not their concern.

Their concern and bogeyman is the deficit.  Okay it is a concern.  But they don’t bat an eye about billions for Iraq and Afghanistan, they don’t see the defense industry as a government program, and they wouldn’t hesitate to cut education, health care, or whatever to support these giant programs.  I don’t think it means a hill of beans to have the strongest military in the world if our economy is a shambles.  Is the deficit something we should worry about?  Of course, but right now we have to get things moving or the deficit is going to get much worse than what this spending will cause.  Later on we will have the fight with conservatives once again to set reasonable tax rates to pay off the borrowing we need to do today.  It is called shared sacrifice which is totally alien to their mind set.  They are on the wrong side of almost every issue because their ideology has constipated their brains and of course the status quo (those that got rich in the existing climate) pays them not to think.

And yes we need another stimulus, as the first one was too small and not targeted to things that would fuel the economy with spending.  Thank you conservatives for that.  That includes some of those moron conservative Democrats that the press continues to falsely refer to as moderates.  This stimulus package or whatever they want to call it, ought to be more focused, to help those out of work (extending unemployment) and real investments in tomorrow. Forget about bipartisanship because the conservatives will try to keep anything from happening.  They will scare the rabble with the fear of deficits while setting the country up to bankrupt the poor.  Nothing ever changes and you would think sooner or later people would wake up to going nowhere.

*While the economy grew 3.5%, most of that was due to replacement of inventory, reduction of workforce , and longer work hours, while unemployment continued to increase.  Even the Stock Market has figured this out as it fell on the weak outlook.  Things are going to get worse, not better without a new stimulus plan.

On Meet the Press on Sunday, conservative Joe Scarborough was in a discussion about if the Republican Party is fracturing and he made this comment:  “ …when I, when I ran in 1994, the Republican Party on the state, national and local level tried to run against me a moderate Republican. And I’m not talking, I’m not talking abortion or gay marriage, I’m talking taxes and spending, small government.  That’s great to reinvigorate the base.”

So other than the wingnuts who see black helicopters and socialism everywhere, the conservative revival according to Joe and many Republicans, will be based on tax reduction, minimal federal government spending, and small government, which is code for few regulations.  What I can’t figure out is why doesn’t anyone challenges this ideas as exactly how we got into the mess we are in today.   The Bush administration passed a tax break that emptied the treasury and set up our wild out of control deficits.  Oh by the way, this same administration and the Republican Congress went wild on spending including the Iraq war with absolutely no control.  Finally they couldn’t reduce the size of government so what they did was emasculate its ability to regulate and manage its affairs.  The outcome was disastrous from Katrina to the financial meltdown.  We have had no energy plan, no infrastructure investment, no climate control policy, minimal spending in R&D, assuming that somehow the market would solve all these problems.

Now one can surmise that all these tenets of the conservative mantra are based on faith in the market system and capitalism so lets examine this system and the conservative beliefs in it.  This can be summed up as let the market place, through capitalism, operate with a minimum of restraints and our economy will be humming.  But anybody who really reads Adam Smith and the Wealth of Nations understands that there is no such thing as perfect competition.  Regulations didn’t come first.  They came after gross abuses mandated them because of the public outcry.  Labor laws, safety regulations, environmental laws, truth in lending laws, monopoly laws, banking laws, handicap access, minimum wage, all come to mind.  Companies that worship capitalism are always maneuvering to stifle competition so that they will have an eternal competitive advantage.  Government’s role is to level this playing field and to curb the worst abuses.  Conservatives totally miss this.

So the bottom line is that regulations are necessary to level the playing field, keep honest competition a reality, and prevent unrestrained capitalism from abuses to the environment, labor, safety, you name it.  Now I will be the first to admit that there are many regulations that are counterproductive but at this juncture in our mess, it is clear that regulations and an effective government to carry them out are a given.  Then we can perform a careful assessment of what works and what doesn’t, and refine those regulations.  But a philosophy carried out in reality that hates government and all regulations will just return us to the Bush mess of 2007.

So much for the small government and few regulations.  What is required is effective government, but that is not what conservatives believe in.  Quite the opposite, they see government as “the problem”.  A philosophy that ignores reality is bound to fail when put into practice.  Does anybody remember the lessons learned from George Bush?  Oh, I know, most conservatives avoid confronting these realities by saying George wasn’t a real conservative.  It is denial at a humongous level.  It is humongous because I hear every day people say they don’t want government to run something.  They fail to understand that almost everything they have today from clean and adequate water supply, a reliable transportation system, to their education and medical insurance in old age is a direct result of government action.  They only remember the failures or hindrances they perceive, not the overall impact.

Now on the tax and spend mantra, what is meant is low taxes and little spending.  But as I have pointed out in other blogs (See Republicans Aren’t Evil are They?), investment is the lifeblood of businesses, so why wouldn’t it be the lifeblood of a country.  Low taxes in themselves are not an elixir.  Many studies have shown that lowering taxes too much has a detrimental effect on the long-term health of an economy just as raising them too high.  The other side of this coin is deficits.  The deficit is large and further growth of it scares everyone.  But we got that debt as noted earlier, not by investing in our future, but in tax cuts for the wealthy and failing to pay for proper investments in this country.  The conservatives would dry up any investment in our future and in fact mortgage our future on the present.  It’s called selfishness.  As noted in a News and World report, the USA has fallen from fourth to ninth this year as a rating of the richest countries in the world.  This has been a direct result of conservative economic policies we have followed for the last eight years.  The article notes that this is not because of the recession as other countries are quickly recovering and we are not.

Some of these measures that were evaluated to determine our status were jobs, poverty, education, economic growth, competitiveness, prosperity, health, and happiness.  Now we are falling in all these measures after eight wonderful years of conservative economic policy.  The deficit is scary, but we are going to need to make investments in the short term to create cash flow in the economy.   Unemployment will increase, along with foreclosures.  States see shrinking revenues for the foreseeable future, which means more cuts.  The fact that companies are showing more profitability will not solve these problems.  They aren’t selling more; they have reduced staff and work longer hours.  The stock market reflects the faux profitability of these companies and economists use these numbers to say we are in a recovery.  But if demand continues to shrink, no one is going to hire.  The real recovery will be when people have jobs and their purchasing power grows.  Right now it is continuing to shrink.  Simply reigning in government spending is going to worsen this cyclic problem.  That spending needs to be directed where it will be most effective and that is not in tax cuts.

So if you like where we have been, and you will if you are in the top 1% of income earners, then continue the conservative economic approach.  If you want to see us get out of this mess, then we need to think about new ways of doing business.  This is going to take smart investment by our government, and reasonable tax policies to implement this policy.  Instead we have conservatives promising us a return to wonderland if we will just re-embrace conservative hate-government, cut taxes, and spend little. I am not gullible enough to tell you that the Democrats have the answer, but we have tried the conservative approach and it has failed miserably   If you are that stupid to try it again, you deserve your fate.

President Obama has made some great strides since taking office and it has been quite a change from the Bush years.  He has had some unparalleled challenges and he does seem to be changing the direction of the country.  Having said that, there are some real changes that he is ignoring or failing to address, and these failures could eventually undermine his administration.  They will undermine his administration because if he is seen as just another politician who fails to tackle the tough issues by limiting his actions to what is politically expedient instead of what is right, our faith in government will be further undermined.

I believe his heart is in the right place on most of these issues, but he is getting infected with the “bubble” logic of Washington which loses sight of what’s right in the cloud of what seems politically possible.  Sometimes what is politically possible is not any better than doing nothing if it will not bring about real change.  So here is my list and challenges to the President and I am not pulling any punches.  From my point if he doesn’t soon sort these issues out, he will have failed at real change which is standing firm on our American ideals:

• Gay and Lesbian Rights – You promised to end don’t ask, don’t tell and have done nothing while good, loyal, and heroic Americans are being run out of the service.  Even Dick Cheney can see gay marriage has merit.  Yet you still can’t see that until this is a national right, there is no equal protection under the Constitution.  For a professor of Constitutional law, you deeply disappoints me especially when you confuses your religious beliefs with our Constitution.  Allowing these injustices to continue while you fail to exercise the political courage to do something about them is unconscionable.  Where is your leadership Mr. President?
• Abortion Rights – It is clear that the killing at the clinic in Kansas was terrorism, plain and simple.  It is also clear that the anti-abortion people have fomented this hate campaign and their tactics are clearly blatant intimidation the Bush administration allowed to fester.  They are being successful because they are depriving women of a legal procedure that they have a right to.  So where is your outrage?  Where is your political courage to stand up and call this terrorism and to protect the legal rights of women seeking abortions? Where is your leadership Mr. President?
• Single Payer Health Care – There is only one real change to our health care system that has any hope of working and that is a single payer system.  Some fall back government system if the private system fails is just kicking the can down the road one more time and setting us up for failure.  When do you stand up and look us in the eye and tell us what has to be done instead of pining for some bipartisanship in the sky that is destined to fail?  It is time you came out swinging for what will work, not what may play into the Republican’s hands. Where is your leadership Mr. President?
• Reforming the Banking System – There hasn’t been any.  We have bailed them out and not made the boards or their executives pay the price for their bad decisions.  The reform for derivatives to make them transparent has a hole in it big enough to drive a truck through.  I understand the need to save the banks, but now they must pay.  We own them.  Let’s break them up so they are never too big to fail again.  And by the way Mr. President, where the hell were you when the bill to allow judges to adjust mortgages in a bankruptcy proceeding went down to banking lobby?  Do they own you too?  This was the one thing that could have really helped homeowners.  Where is your leadership Mr. President?
• Torture and Detainees – Once again you are starting to look like George Bush lite.  First, get on with releasing and declassifying everything.  If you don’t, Republican obfuscation about its effectiveness will never be put to rest.  It is not behind us and it never will be if you continue on this path.  There must be an investigation and responsible parties held accountable.  There is no other way in a nation of laws.  There can be no indefinite detention or our right to habeas corpus and due process is no longer a right.  If there is an exception, then the right no longer exists.  It is only a right if you don’t make it an exception.  You of all people ought to know this.  Hiding behind some judicial process is not the intent of our Constitution.  Detainees must be tried or released and we must have the courage to live with the consequences.  Otherwise our whole system of government has no meaning.  Where is your leadership Mr. President?  Where is your courage?
• Terrorist Surveillance Program, Military Commissions Act, and the Patriot Act – These are all abominations enacted by President Bush and a frightened Congress who sold out our Constitution when they were threatened with fear for their safety.  It was the greatest example of the lack of moral and political courage this country has shown since the internment of the Japanese since World War II.  Instead of overturning many of these abominations, your attorneys have been upholding them in the courts making the same arguments about national security overriding Constitutional rights that the Bush administration did.  When are we going to restore our dignity and demonstrate the courage of our convictions by stopping this travesty Mr. President?  Have you succumb to the argument that to be safe we must jettison our most cherished beliefs?  Where is your leadership Mr. President?
• Energy and Climate Change – Have we stalled in mid-stream?  Since gas prices have fallen, where is the energy plan that will not only get us off oil, but save our planet?  We are coasting and I see no focused plan.  Are we drifting along until the next crisis?  We need an aggressive 10-year plan.  Okay then, how about an aggressive 20-year plan, but the point is where is it?  Are we even moving toward it?  I fear we are losing momentum Mr. President.  Where is your leadership?
• Secrecy and Abuse Photos – Here is where I really feel you have lost touch with your roots.  Lindsey Graham and Joe Lieberman have a bill to make the pictures of detainee abuse an exception to the freedom of information act.  Any bill from these two ought to be suspect just for starters.  Their point, which apparently you and Secretary Clinton seem to agree with, is that by releasing these, you may put some of our people in jeopardy, therefore they must be suppressed from public release.  THINK ABOUT THIS! The precedent you are setting is that if our government does some horrible or embarrassing thing that might, if known, put Americans at risk, it should never be released.  This is the same logic that Dick Cheney uses to justify torture.  If it will save American lives, it is justified.  I was an American fighting man and I did not fight so you could suppress the truth because it’s painful.  I fought so that our government will be transparent, that we know what the government does in our name and we can take action at the polls if we don’t agree.  THIS IS A VIOLATION OF EVERYTHING WE BELIEVE IN.  IT TARNISHES WHAT MAKES FIGHTING FOR THIS COUNTRY WORTHWHILE. You are trading safety for our right to know.  If, because you think not signing this bill you will putting some American lives at risk, you sign it, you will be denigrating everything I and many others fought for.  We will take the risk.  It comes with the territory.  If you don’t understand this, then we elected the wrong guy.
• Finally the Deficit – A recent study showed that our out of control deficit is only 7% due to your stimulus package and 3% from your agenda on health care, education, energy, and other issues.  Most of the deficit comes from the tax cuts of the Bush years (33%) and from Bush policies like the war in Iraq.  37% is from the business cycle and the increased spending for the safety net.  About 20% of the deficit comes from your extension of Bush policies like the war in Iraq and tax cuts for households making less than $250,000 and the bailout of wall street.  The Republicans are using this deficit as a fear card, yet they have no plan to curb it since they want even more tax cuts.  The author of the study had a simple conclusion:  “The solution, though, is no mystery.  It will involve some combination of tax increases and spending cuts (for everyone).”  Unlike California, which is about to commit suicide by not raising taxes to invest in their future, when are you going to look the American people in the eye and tell them they have to pay their way?  Where is the leadership Mr. President?

Okay tough language.  We know he has made great strides in many areas and are we just asking for too much too soon?  My answer is no.  These are fundamental values that must be stood up for.  Otherwise we will make changes at the margins, but we may loose what is unique to being American.