Reality Check!! (Discussion)

I posted my last commentary on February 4, 2013. For those who may want to re-read it, it can be found by double clicking on its title "Reality Check!!"

I received two comments in response thereto both of which led to exchanges. I want to share these with you.

The first came from Albert Nekimken PhD of Vienna, Virginia, whose reaction to my post was as follows:

Your skewering of Jindal was delicious and absolutely on target. Regarding the prospect of millions of new Hispanic voters, I was surprised that you didn't even mention the recent vote in Puerto Rico in favor of statehood. How long can Republicans ignore this fervent plea to join the Union (and add Democratic votes in Congress…)? 

As for gerrymandering of House districts, I continue to believe strongly that the only way to solve this is to amend the Constitution so that ALL members of the House are elected by a national constituency, as is the president. The current system is hopelessly anachronistic and, as you describe cogently, thoroughly sabotaged. A national constituency would have the corollary benefits of diluting the effectiveness of lobbyists and narrowly directed PAC money. It would force the creation of multiparty, national governing coalitions. 

Beyond that, you are absolutely correct in sounding the alarm regarding GOP efforts to change the electoral college system, which--whatever its faults--seems to be working as intended at present.

My response follows:

Not all agree that there is a fervent plea on the part of Puerto Ricans to join the union. See here. 

Quoting from CNN:

"In response to the second question, which asked voters to select an alternative, 61% of those who cast ballots chose statehood, but more than 480,000 people abstained from voting on that question.

They could have voted for statehood, if they had really supported it," said Maria de Lourdes Santiago, senator-elect for the Puerto Rican Independence Party, which supports the island becoming its own sovereign republic. "When you combine all the votes, statehood doesn't appear as the true winner in the second question about non-colonial options."

But it is irrelevant. Congress will never allow it. You may remember that when statehood for Hawaii and for Alaska was being considered it only became possible because one was considered Democratic and the other Republican. Without a balance it is not possible.

As for gerrymandering the solution does not require a Constitutional Amendment, and I think that your national House is neither a good nor a viable solution. The Solution lies in the Supreme Court striking it down as a violation of the Equal Protection clause.

In VIETH V. JUBELIRER the Court would not intervene because they could not agree on a suitable standard. But that is not needed. They don't have to agree what would be legal, only what is not. I think this is an issue where Kennedy could be won over and we might have the practice stopped.

A national House constituency runs in the face that smaller units need to be represented, something I agree with.

But I would favor doing away with mid-term elections. Let the House and the Senate be elected every four year to coincide with Presidential elections. Less time spent campaigning and raising money, and a larger and more representative electorate. If possible, state elections should be held at the same time too.

I do not favor multi-parties. They confuse the issues. 

Another comment came from Mike Cerrato Esq. of Westville, New Jersey, who opined:

I've gotten over their having founded their economic system on slavery several hundred years ago (after all, up until that time, everyone was doing it or had done it in the past) I just wish they'd stop trying to REINSTATE it for EVERYONE not earning over a half million dollars/year! But, then again, I always was a wild-eyed idealist.

This drew the following rebuttal from me:

I would not consider slavery as being an integral part of the founding of our nation as being relevant today, were it not for the fact that its influence pervades our culture to this day.

As for "until that time, everyone was doing it" is not accurate. Take a look here and you will see that the US was very late in abolishing it, as compared to most of the world, and no where else did it require a bloody war, to end it. As late as 1850 the US Congress passed the Fugitive slave law, and as late as 1857, the Supreme Court decided the Federal Government did not have the power to regulate slavery within the territories.

But the important point is that race has never ceased to be a major factor in our body politic. It did not stop being a factor even after the Civil Rights movement of the '60s and remains a major factor to this day, as I will discuss in a future post. This is a factor quite apart from the economic class warfare being waged against the middle and lower classes.

Which in turn drew these further remarks:

I don't know about it being "quite apart" from what is going on today. Oh, the suits are nicer, and the words more polished (i.e., "Right to work"), but it still boils down to a bunch of people who still think that it is right to steal another’s' labor, or at least get it as cheaply as possible and morality be damned as long as it gives us "Always low prices." As for the history you cite, all I can say is "American exceptionalism" indeed! As always, thanks for some enlightening information.

Drawing an extensive surrebuttal from me, as follows:

Here I must again take exception. Lower prices are as much a boon to those with little, as higher income. If there were a direct relationship between lower wages and lower prices, it might have some justification. Occasionally there is, but most of the time, lower compensation leads to more profits, which goes mostly to those who already have too much. But I have no quarrel with the Capitalist system that creates these motives, or with the people who take advantage of the system. 

           

I must caution against false equivalence. A system that tries to keep labor costs low is not in any way equivalent to slavery, and we serve both concerns poorly when we make such a false equivalence.

           

All I want is for the government to play its role in balancing the system. A fair minimum wage adjusted to inflation. A fair system of taxation where we get enough revenue from those who can afford it, so that government can meet the needs of the nation and promulgate regulations to protect the consumer, the worker, and the environment, while making sure the nation has the infrastructure and the educational system that keeps it competitive into the future.

           

It is indeed generational theft when we do not do the things that will make us competitive in the future, and destroy the environment in which future generations will be living.

           

But race is different. There is no profit motive when we incarcerate people of color for doing what white people do with impunity, or deny them the right to vote. That is innate to people needing to feel superior, when they have no other basis for it than color.

           

Note how our immigration laws have always, and continue to discriminate against people we deem inferior, whether first Chinese, then people of Eastern and Southern European descent, and now people from the South of us.

           

We, as a nation, suffer from a terrible case of xenophobia and fail to deal with our problems with cries of exceptionalism, which leads to a refusal to recognize our failures and to remedy them.

           

What has made this nation an exceptional one was our creation of a strong middle class, and an educational system that was second to none. This is not the fist time we have temporarily lost our way. We have always managed to right ourselves, often through sheer luck, such as when the reactionary McKinley died and the Reformist VP Teddy Roosevelt ascended to the Presidency. This ushered in a reformist era, when the Republican Roosevelt was followed by the Reformist, though racist Woodrow Wilson, though with the Taft hiatus. We then had the dark days of Harding, Coolidge and Hoover, only for the pendulum to swing the other way with Roosevelt, Kennedy and Johnson, and would have continued in this vein if the Left foolishly had not turned on Humphrey, prolonging the Vietnam war by eight years, by ushering in Nixon, whose policies, domestically, really weren't so bad, but who with his Southern strategy, based on race, ushered in the Reagan era, which we are only now recovering from, albeit with great resistance.

Comments, questions, or corrections, are welcome and will be responded to, but will not be distributed, because events are moving too fast and my posts need to keep up.

Reality Check!!

In the wake of the re-election of Barack Hussein Obama there is elation in liberal and Democratic circles and soul searching in the Republican folds.

The focus is on the fact that “Democrats have won the popular vote in four out of the last five Presidential elections — including the 2000 race in which Al Gore got 500,000 more votes than George W. Bush nationally, but wound up losing the electoral vote by two votes, courtesy of the Supreme Court.” See here. Of course, at the same time it overlooks that Obama, is the only Democratic President since F.D.R. to be granted a second term by a popular majority. See here.

But the first part sounds good! Makes for good headlines! Even has Republicans eating crow. Thus Governor Bobby Jindal in the most dramatic words of any Republican spokesperson said:  

We’ve got to stop being the stupid party… It’s time for a new Republican Party that talks like adults. It’s time for us to articulate our plans and our visions for America in real terms… We are not the party of big business, big banks, big Wall Street bailouts, big corporate loopholes or big anything…We must not be the party that simply protects the well off so that they can keep their toys.

So is it a whole new ball game. Have Republicans seen the light? Or in the immortal words of Yogi Berra, is it  “deja vu all over again".

It is a mere six years since I posted an article on my blog entitled "Euphoria and Reality" in which I pointed out that despite the big win in mid-term elections, the ability to govern was far from our grasp. After 2008 euphoria was even greater, but it was still a very big slog to get real reform enacted. To get the stimulus enacted, three Republican votes had to be found to overcome a filibuster, and the three votes were bought by diluting the crucial funding of state governments, leading to enormous job losses in the state’s public sectors, and a drag on job creation in the private sector.

But now in the elation of 2012 we seem to have forgotten what happened a mere two years ago. That was a real drubbing. As a result in 25 of the 50 states Republicans have complete control of all three branches of government, and 30 of the 50 states have Republican governors.  This came at a very propitious time for them since it followed the 2010 census, allowing them to redraw Congressional and even state legislative lines so as to assure them of a majority in State legislatures and in the House of Representatives into the indefinite future. See here. As of this year Democrats will hold complete sway in only 13 states. See here.

But what of the new Republican awakening as outlined by Jindal? Just recently he introduced into his state legislature a plan to “eliminate Louisiana's income and corporate taxes and pay for those cuts with increased sales taxes…” which according “to the Institute onTaxation and Economic Policy, would end up cutting taxes for the wealthiest Louisianans while raising taxes on the bottom 80 percent of Louisianans. So much for “We must not be the party that simply protects the well off so that they can keep their toys.” The talk has changed! The reality has not!

And is Jindal this new Republican moderate on other issues? According to Raw Story he favors "allowing creationism to be taught in biology classes, opposes abortion in all cases, votes against expanding federal funding for stem cell research and supports a constitutional ban on marriage equality."

So what does he mean when he says we have to stop being “the stupid party"? He means that they have to be better at obfuscation.

The fact is that the shift in state taxes from income to sales taxes, increases the burden on lower incomes, and decreases the burden on upper incomes, and it is happening in Republican controlled states, through out. For example Republicans in North Carolina are pushing such a plan. Kansas, which cut its income tax significantly last year, may trim further. Oklahoma, which tried to cut income taxes last year, is expected to try again. See here.

But far more ominous are Republican attempts to fix not only congressional elections by gerrymandering, but fixing the electoral votes by changing the rules.

They tried to suppress the vote in the last election. It didn’t work, or at least it didn’t work well enough. As the Washington Post wrote, now Republicans:

...who have control of states that went for President Obama in the 2012 election are pushing for their states to change how they award electoral votes. While almost every state awards electoral votes on a winner-take-all basis, Republicans want these states to instead award one vote to the winner of each congressional district. 

The other two electoral votes that each state has likely would be given to the statewide winner, as they are in the two states that currently employ this method: Maine and Nebraska. 

The new system would allow Republicans to consistently win electoral votes (and quite possibly a majority of electoral votes) from states like Michigan, Ohio, Wisconsin, Pennsylvania and Virginia, regardless of whether they win the statewide vote. 

All five of these states went for Obama in 2012. Michigan, Wisconsin, and Pennsylvania have consistently gone blue at the presidential level, and Virginia is tilting in that direction, which would make winning any electoral votes in these states a victory for the GOP. 

Why does it matter? 

It matters because the congressional district method gives the GOP a much better chance of winning, since a strong majority of U.S. congressional districts lean Republican. 

In fact, if every state awarded its electoral votes by congressional district, it’s likely that Mitt Romney would have won the 2012 presidential election despite losing the popular vote by nearly four percentage points. See here.

They are talking about a new party. They are talking about being more inclusive. About courting the Hispanic vote by supporting legalization of the 11 million illegal aliens in the US. Watch what they do, not what they say. It is already no legalization until the borders are secure, and of course we have been trying to make the borders secure for decades. They will never be secure enough to suit these pretend converts. They are owned lock stock and barrel by a majority of Caucasians, mostly rural, who founded this country on slavery and will never, never, accept the idea that they may no longer be the majority. They will do whatever it takes to keep the vote in their hands. Charles Krauthammer writing in the Washington Post speaks for them. “There is an obvious solution: enforcement first.” Even if somehow Republicans in the Congress agree to legalization, i.e. Green Cards, the will never agree to citizenship. Would they really allow 11 million more non-whites to vote, particularly if they are more then likely going to vote Democratic? I think not! Or as the Christian Science Monitor explains: 

In addition to sinking $1 billion into the failed "virtual fence," the US government has spent $2.6 billion for 650 miles of solid border. This wall doesn’t deter people – but it does defy the laws that protect the land.

As for the idea that the illegal aliens have to go to the end of the line before being considered for legalization that is the biggest hoax of them all. As was pointed out in a recent article in the New York Times:

If we really want to tackle unauthorized migration, we need to understand why it exists in the first place. The most important cause is our system of allocating green cards, or visas for permanent residency, which stipulates that no country may have more than 7 percent of the total each year. With an annual ceiling of 366,000 family- and employer-sponsored visas, the per-country limit is 25,620. 

“In practice, this means it is easy to immigrate here from, say, Belgium or New Zealand, but there are long waits — sometimes decades — for applicants from China, India, Mexico and the Philippines. These four max out on the limit every year. When critics admonish prospective immigrants — as well as the 11 million plus undocumented migrants currently in America — to “go to the back of the line,” they should realize that for many people the line is a cruel joke.

Republicans may go along with allowing illegal immigrants, who in the words of Senator McCain are, “… individuals to mow our lawn, serve our food, clean our homes and even watch our children, while not affording them any of the benefits that make our country so great, … I think everyone agrees that it’s not beneficial to our country to have these people hidden in the shadows.”

Republicans may allow them to come out of the shadows, but I predict that giving them citizenship and the right to vote is something that they will fight to the bitter end.

For a history of attempts at immigration reform, see here.

Marco Rubio, a descendent of Cubans, who won his Florida Senate seat, by less than 50% of the vote because his opposition was split, has been touted as the great immigration reformer. Is he? See here.

The cry of  “no amnesty” may no longer be the rallying cry, but citizenship and the right to vote is another matter all together. Of course that “no amnesty" cry was always phony, for we have statutes of limitations for every crime except murder. Why would we not have a statute of limitations for aliens having come here illegally decades ago?

But people who have made lives for themselves in this country, who have been here for decades, who have families here, are entitled to not only come out of the shadows, but to have full participation in our Democracy. Nothing else can or should be accepted.

Comments, questions, or corrections, are welcome and will be responded to and distributed with attribution, unless the writer requests that he/she not be identified.

The Stimulus Bill

How did we get from there to here? How did we get from the booming economy of the Clinton years to the collapse of the economy in the eighth year of the Bush Administration?

It really all began during the Clinton Administration. Clinton had proved that not all tax cuts are stimulative and not all tax increases dampen economic activity. As the bible says (Ecclesiastes 3) and Pete Seeger made famous, “There is a time for everything, and a season for every activity under heaven:”

That is a lesson that the minions of the Republican Party have not learned or as has often been said about them, “They have never forgotten anything and they have never learned anything.”

They are wed to the proposition that taxes need to be cut all the time, and never, never raised. When Clinton proposed raising some taxes on the rich, the economy that he inherited from Bush pére was in the doldrums but interest rates set by the Fed were high. Clinton reached an agreement with Fed Chairman, Alan Greenspan, that if he reduced the deficit the Fed would lower interest rates. The result was a booming economy and a booming stock market. In fact the stock market entered a period of such an exaggerated boom that it caused Greenspan to coin the now famous phrase, “irrational exuberance", but he did nothing about it despite the fact that it was obvious that the stock market boom was caused by rampant speculation fueled to a large extent by buying on margin, i.e. using borrowed money to speculate in the market, or as it is called “leveraging” ones investments. The Fed has the power to raise or lower this requirement (see here) but Greenspan in keeping with his then philosophy of believing that the markets regulate themselves left the market to its own devices.

I believe that set the tone for the Bush fils eight years of wild speculation by the banks at unheard of levels of leveraging their loan portfolios. At the same time, following the policy that all tax cuts are good, these years brought about some of the largest tax cuts ever, leading to huge deficits, which were defended in the words of V-P Dick Cheney, “Reagan proved deficits don’t matter” and with the enthusiastic support of the Republican party in Congress.

What a change an Administration makes. Now, suddenly running up deficits, say Republicans, is “generational theft.” But are they really concerned with deficits even now. They agree that we need to stimulate the economy, and they agree that reducing the deficit now is the wrong prescription, but they want to do it with more tax cuts for, you guessed it, the wealthy. They don’t want to “redistribute wealth” after having presided over the greatest redistribution of wealth upward, toward the wealthy, in the history of the US. As a matter of fact the wealth redistribution upward began in the Reagan years. In 1980 the top 10% of households accounted for 33% of total household income. By 2000 this group accounted for 44% of total household income. Today the top 1% of households receives more pretax income than the bottom 40% and the distribution of wealth is even more lopsided. The top 1% of households own nearly 40% of total household wealth -- more than the bottom 90% of households combined -- and earns half of all capital income. Income and wealth are more unevenly distributed among Americans than at any time since the Jazz Age of the 1920s.

According to the Economic Policy Institute the rich-poor gap widened with the nation's top one percent now collecting 23 percent of total income, the biggest disparity since 1928. According to the IRS there are now 47,000 Americans worth $20 million or more, an all-time high.

What does this tell us? Not all tax cuts and not all deficits are equal. When wealth is inordinately pushed upwards as in 1928 and now in 2008, it will no longer be invested prudently, but rather it leads to rampant speculation leading to a speculative boom followed by a bust.

Only a reversal of this trend, with a pump priming of the economy and a loosening of credit can reverse the impending disaster. More tax cuts for the wealthy can only compound the disaster and the cry of Republicans that the answer lies in tax cuts for “small business” is not the answer either. First of all, small business does not refer to mom and pop stores. “Small business” according to the Small Business Administration includes all businesses that have fewer than 500 employees and, e.g. in construction $33.5 million average annual receipts, hardly what one would call “mom and pop stores.

While they are the largest creators of jobs in our economy, they produce jobs when there is demand, and consumers produce 70% of demand.

If consumers aren’t buying no amount of tax reduction for the suppliers will cause them to produce that for which there is no market. It is the fallacy of supply side economics, which is really another word for redistribution of income upwards.

What is stimulative? Anything that puts money in the hands of those who need it most and who will spend it immediately out of necessity. Thus supplying money to those who are unemployed is the best stimulus. Even if they are simply given the money it will be stimulative because it will be spent creating demand. But this is not the best stimulus because it has no multiplier effect. It is better to employ that person. If we employ him/her to dig a ditch and fill it, it will be stimulative, but it has no multiplier effect. But if we employ that person, e.g. to seed the Capitol lawn we get a multiplier. Not only when they spend, will they cause businesses who manufacture the goods and who warehouse it and who retail it, etc. to ramp up production, causing them to hire additional people to meet the demand which in turn causes more spending, causing a chain reaction which reverses the cycle of layoffs, but in order to seed the lawn, seeds have to be bought, construction equipment has to be rented, each of which creates jobs leading to more jobs, and in the end we have the benefit of a better lawn. But this small bit of creative spending was ridiculed by Republicans and dropped from the bill. Yet unlike large projects, which give more permanent benefit, nothing could have been more “shovel ready.”

Giving money to the states is another example of a provision in the stimulus bill which could not be improved upon, because if we want quick results what can be better than hiring people, if it is not keeping them from being fired. States, unlike the federal government, have to have balanced budgets and so when as a result of the loss of tax revenues due to the recession, they are faced with deficits, they have no choice but to increase taxes or lay off employees, including police, firemen, teachers, etc. They have to stop repairing roads and they have to stop capital projects already under way or shovel ready. That is not what we need when we are trying to start such programs, not stop them. Yet this was the “pound of flesh” our three “moderate Republicans” demanded as a condition of their supplying the votes needed to stop a filibuster.

For a discussion of the filibuster see the paragraph preceding the antepenultimate one here.

They insisted that the amount allocated for aid to states be cut by $40 billion.

We might well ask why this opposition. Bobby Jindal, the governor of Louisiana, the official Republican spokesman made it clear that Republicans were stills stuck on doing nothing. His main theme was to rely on Bush’s failure in Katrina to show government doesn’t work. How ironic. Republicans, after eight years of blindly supporting Bush are now running against him. Besides they seem unable to tell any story without lying. It appears that Jindal’s story about rescuers being threatened by federal agents because they didn’t have insurance and that he was there, was a total fabrication.

They are now even going so far as to rewrite the history of the Roosevelt New Deal. Now we hear that the New Deal was totally ineffective. As I will demonstrate in my next commentary the facts and figures belie that, but it shows that no distortion, nor any lie that will advance their agenda is off the table.