Feeds:
Posts
Comments

Archive for January, 2009

The Senate Republicans are lining up to oppose the stimulus package, whining as did the House Republicans, that they aren’t being listened to and that their ideas aren’t finding their way into the package.  Never mind that President Obama met with the House Republicans, listened to their concerns, and the House made some adjustments to the mix in the bill to try to accommodate them.  More tax cuts.  A few spending cuts.   They responded to his open hand with a clenched fist.  And here we thought that was aimed at the terrorists.  So, what did they do?  Voted NO as a block.  Never mind that the tax cuts of the past eight years haven’t exactly led to prosperity.  They want more of the same, and the Senate Republicans are acting like an echo chamber.  I wonder how many of those “no” voters will say “thanks but no thanks” to any stimulus funds that might be coming into their districts or their states.  Anyone want to take bets on that one?  Think you could find anyone to take you up on it, regardless of what sort of odds you give?

Economists of every persuasion — liberal and conservative — agree that a stimulus package is needed and that tax cuts don’t produce jobs the way spending does.  Most economists agree that people, except for the poor — many of whom fall below the minimum income needed to pay taxes — tend to save the money coming from tax cuts.  Or they use them to pay existing bills.  The tax cuts don’t get money into the economy as well or as quickly as spending does.  And heaven knows there are plenty of things we’ve been ignoring as a nation for decades.  All you have to do is drive our highways and city streets.  The pavement is cracking and the pot holes are nearly big enough to swallow a car.  How many more bridges and levees and dams need to fail before we get it… we need to invest in infrastructure.  How many more school buildings need to be condemned because they are unsafe?  How many more kids need to sit on the floor, lacking books and supplies, let alone class sizes that are actually conducive to learning?  How many buildings need to be made more energy efficient?  The list is nearly endless.  But the Republicans focused their criticism on condoms and new sod for the National Mall.  No matter that preventing unwanted pregnancies among poor families prevents a further financial drain on the system.  No matter that even laying new sod on the Mall would provide jobs for some folks who desperately need them.

It would seem that the Grand Obstructionist Party isn’t paying much attention to the election results… a Democrat elected President by a wide margin, significant numbers of seats lost in both houses of Congress.  The American People sent a message, but it seems they aren’t listening.  The message was that we don’t want more of the same.  It hasn’t worked out so well for us.  And elections have consequences.  Bipartisanship doesn’t mean that the minority part is still in control.  It means that everyone, regardless of party affiliation, works together for the good of the country.

The economy is hemorrhaging jobs at a growing rate — 100,000 or more just this week.  Housing prices are still falling.  People are afraid to spend money because they fear their job will be next.   This economy desperately needs to create jobs.  But the Republicans are playing with the numbers, again.  Instead of looking at the cost per job over the life of the stimulus package, they’re billing the entire cost in the first year, a trick that nearly quadruples the cost and doesn’t take into consideration the tax revenues those jobs produce.  But it serves their partisan political purposes.  Or so they think.  Do they really think that the voters won’t be reminded of their record come the mid-term elections, especially if by then things are starting to turn around?  They’re banking on the hope that things will be worse.

President Obama said before he took office that things are likely to get worse before they get better.  If this week’s numbers are an example, he was correct.  But a change of attitude is in the air.   Whether shaming via the bully pulpit or coercing via new and improved regulations, the administration is clearly identifying the problems that come with lack of regulation, oversight and accountability. And only one Senate seat remains as hostage to continued Republican obstructionism.   It will be interesting to see just how far the Republicans are willing to push — and even more interesting to see the consequences of their methods.

Advertisements

Read Full Post »

President Obama has accurately described the feelings of many Americans towards the financial sector CEOs’ use of the bailout funds.  We hear of management retreats at luxury spas, multimillion dollar corporate jets, huge bonuses, funds used for acquisitions rather than to ease credit, and even a multi-million dollar mansion being “sold” to one CEO’s wife for $100.  Are these people so out of touch with reality that they don’t see this behavior as resembling Marie Antoinette’s infamous response to the privations of her subjects?  No wonder that some wags are suggesting that they spend some time in the accommodations at Gitmo for a dose of reality!

And we read that as the wealthy continue to spend their millions, they’re asking that their luxury purchases be delivered, wrapped as gifts, or placed into plain bags so that their conspicuous consumption isn’t quite as obvious.  So at least some of them are aware; they apparently just don’t care.

The more I hear of the lack of oversight and accountability for the first half of the TARP funds, the angrier I get.  I’m still shaking my head that there were no requirements and that the ones that were included were written with such large loopholes that you could fly several corporate jets through them doing aerobatics all the while.  Again and again I’m reminded of the comparisons with the S&L fiasco during the latter years of the Reagan administration, although the real damage didn’t show up until the early years of Clinton’s first term. Once again, we’ve flirted with deregulating the financial sector, and not surprisingly the results are similar; this time around they’re even worse.

Last night I finished reading Chalmers Johnson’s Blowback.  For those of you who haven’t read it, I highly recommend it — along with Naomi Klein’s Disaster CapitalismBlowback is the first of a trilogy addressing the implications of imperial over-reach.  Written prior to 9/11, Johnson delves into the relationship between the US and its allies in East Asia, and writes in detail on the events and decisions leading up to the economic collapse there in 1998.  In summing up, he writes presciently as follows:

The world remains poised on the edge of a possible, United States-induced recession, athought the United States itself has thus far been the least affected by the economic crisis.  Even if a collapse of global demand is avoided, misguided Amerian economic policies have set back thirty years of economic progress in Southeast Asia and laid the foundation for unpredictable forms of economic, political, and military retaliation by the devastated nations. […]

Johnson isn’t the only voice who predicted some of our current economic mess.  Kevin Phillips did as well in American Theocracy.  The title of Phillips’ book is somewhat misleading as he spends fully a third of it on the problems inherent in our dependence on foreign oil and another third on the challenges and inherent dangers of an economy based on financial services rather than on producing goods.

Read Full Post »

I continue to be impressed with our new President.  He understands that communicating (both talking and listening) is a vital part of governance.  He is willing to compromise without sacrificing principle.  And he understands that power comes in many forms. He also seems to understand that influence is often more effective than raw power.

President Obama has a large majority in the House of Representatives and a nearly filibuster-proof majority in the Senate.  So, he could simply ram his agenda through without Republican help.  But yesterday he spent several hours on Capital Hill meeting with <gasp!> Republican leaders of both houses.  He explained his thought process on the stimulus package, but more importantly he listened to their concerns.  And he made some compromises, albeit on minor points, but compromises nevertheless.  He could have summoned the GOP leadership to the White House to meet on his turf, but he went to them.   And he met not just with the leadership but with the entire GOP caucus.  Both of these are powerful symbolic steps that speak to his commitment to a new, more cooperative type of governance.  And how very different from the way Washington has run, at least since 1994!

And on the international scene, his first telephone call to a foreign leader was to Mahmoud Abbas, head of the Palestinian Authority, and the first interview he granted as President was with a moderate Arab network, Al Arabia.  His first executive orders have been directly aimed at addressing some of the most egregious errors of the Bush administration vis a vis the Muslim world.  Rather than appearing to view Muslims as “other,” he has reached out to them and spoken of our shared dreams for our children — that they be able to live in peace and dignity.  Clearly, he is reaching out with an open hand, quietly challenging the Muslim world to unclench their fists.  His assessment of Al Qaeda’s reaction to his election — that they are nervous — is telling.  He asked his Arab listeners to consider whether Al Qaeda is offering them a way that will fulfill their aspirations for the future.  No bluster, no demands, no threats — just a quiet but powerful question aimed at identifying common ground.  He has appointed not one but two highly qualified special representatives whose job it will be to coordinate our efforts in dealing with the Middle East region — former Senator and Envoy George Mitchell for the Arab-Israeli conflict, and Ambassador Richard Holbrook for Afghanistan-Pakistan.  All of these actions — the phone call, the interview, the executive orders, the meetings with the top military brass to plot a new course in Iraq, and the appointment of the special representatives state clearly the importance of the region and they announce a new approach.  Even Sec. Gates’ comments yesterday that a democratic Afghanistan is not feasible is a clear break from President Bush’s dream of spreading democracy throughout the region.

Read Full Post »

When I get into discussions about the economy with my conservative friends, they consistently tout the benefits of tax cuts to stimulate jobs and spending.  But they are consistently opposed to increases in the minimum wage as costing jobs.  Some go so far as to oppose the very concept of a minimum wage.

But here’s where I find their logic faulty.  We know that consumer spending (the demand side of the economic equation) accounts for a large part of the US economy.  And it is the demand side that is in trouble.  Of course, the credit crunch is a factor, but it doesn’t fully explain the current crisis.   Individual consumers have stopped purchasing.

Demand for goods and services is what creates jobs.  When demand goes down, layoffs result. The reduced demand over the past months is largely responsible for the layoffs we’re seeing.

The last administration used tax cuts and tax rebates as ways to try to stimulate the economy, and they do have a short term effect on spending.  However, the facts demonstrate that those cuts and rebates did little to create jobs.  But over the course of their tenure, overall job growth was anemic at best, rarely enough to cover those new workers entering the economy.  Additionally, the jobs that were created weren’t generally good paying jobs.  Indeed, the average wage for most Americans didn’t even cover the cost of inflation, leaving consumers less able to consume.  And as the economy has constricted over the past year, reduced demand has led to increasing layoffs and business failures.  Unemployment rates are higher now than in recent memory.

So, I ask my conservative friends, just what did all those tax cuts really accomplish?  Especially when the tax cuts were financed by deficit spending.  The people at the top got the benefits while our kids and grandkids got the bill.  The rest of us kept tightening our belts, trying to figure out how to afford the increased costs of medical care, education, food, energy, etc.  And now, we’re unable to do much more belt-tightening, even with the significant reductions in energy costs, which themselves reflected the reduced demand.

If consumer spending is the fuel for the economy, doesn’t it stand to reason that the more money people have, the more they can and will spend?  How it is that money in the hands of the wealthy is good, but money in the hands of the middle class isn’t?  How do tax cuts that provide capital for investment and job creation help counter reduced demand and the accompanying layoffs?  People who don’t have jobs can’t contribute to increasing demand.

It seems to me that the last eight years call into question the conventional wisdom about the benefits of tax cuts.  Yet the Republicans are arguing that the Bush tax cuts should be made permanent.  What this economy needs, and needs desperately, is job creation.  Jobs get money into the hands of consumers where it can be spent, thus creating demand and subsequent additional jobs.  To be sure, many Americans who have been spending beyond their means will use part of that money to pay down and pay off credit card balances, obtain long-delayed medical care and the like.  We know that the previous rebate checks went largely to pay bills during a time when energy costs were at their peak.

We have been lured into thinking that lower taxes are the solution, that taxes are inherently evil.  We have swallowed the line that we have the highest standard of living in the world.  Yes, we may possess more goodies than those in other countries.  But our medical care, our education, and our infrastructure — things that most people in other industrialized nations demand from their government as part of the social compact — lag behind.  We spend twice as much per person on medical care with poorer outcomes.  Our schools are failing in their social responsibility to develop an educated citizenry that can compete successfully in a global economy.  We fail to recognize the linkages between lack of education, poverty and crime and so we incarcerate a higher percentage of our population than any other country in the world.  We fail to recognize the costs to society and to the environment of crumbling roads, an electric grid that is vulnerable to failure.

And now the Republican leadership wants to continue with the same tax cuts that failed us before, choosing instead to criticize individual small parts of the proposed stimulus package rather than to identify other more worthy projects.  The party would be well advised to listen to those voices who explain their recent electoral failures as a failure of ideas.  Simply opposing for the sake of opposing is unlikely to bring them in from the cold.  Rather it will continue to cost them elections.  I was stunned at Ken Blackwell, formerly Ohio Secretary of State and current candidate for the RNC chair, say that he opposed the stimulus package because it would create jobs and thus score political points for the Democrats.  That sort of thinking is simply un-American and must be rejected.  Instead, the Republicans should be scrambling to figure out how to create more jobs than the ideas proposed by the Democrats.

Read Full Post »

When John Thain, formerly the CEO of Merrill Lynch, tried to justify his salary and bonus to Congress, I awarded him the “Let Them Eat Cake” award for his utter lack of awareness of reality.  It seems he didn’t read my open letter to him.  Instead, he spent over $1.2 million of our money (courtesy of the bailout) to redecorate his office — $86K for a rug, thousands more for chairs, lamps, and other accessories, but the $1400 trash can really qualifies him for a repeat award.  I must admit that I was heartened that Bank of America, who took over Merrill Lynch and who recently went back to the well for a second helping of bail out funds, has seen fit to fire Mr. Thain.  It seems that even they were offended by the office re-do.

But it seems that Mr. Thain’s sense of entitlement isn’t unique in the financial sector.  I thought banker’s hours were generally pretty cushy — at least that was the common wisdom.  But there’s something obscene about taking taxpayers money and then thumbing your nose at the people who are footing the bill.

When the TARP (bailout) was proposed, I supported it because I understood that without readily available credit, our economy would fall into increasingly bad shape.  But it seems that in their hurry to help out the financial sector, Congress took leave of their senses.  They were rightfully offended at the idea that Sec. Treas. Paulson would have complete control of the funds with zero oversight or accountability.  But it seems that Congress also failed in its responsibility to the People.  We now realize that all the extra provisions added little or nothing to the accountability that should have been attached to that whopping sum.  I assumed (and yes, I know what that does) that there would be at least guidelines if not outright requirements that would assure that the funds be used to provide credit — not for executive salaries and bonuses, not for dividends, and not to fund mergers an acquisitions.  I assumed that there would be some guidance and oversight.  It would seem reasonable that if we have in essence nationalized the banking system, the government would have a more active role in its operation.

For all of the conservative decrying of the welfare state, it seems that they only oppose welfare when it benefits the needy, not when it benefits their interests.  It seems that the first portion of the TARP funds went as welfare to the bankers.  Not acceptable!  Credit is still tight, and despite interest rates at nearly historic lows, the lenders are over-reacting to their previous bad decisions by requiring nearly perfect credit scores in order to lend.  And the crisis is spreading from the US economy to others around the globe.  The only one that hasn’t yet seen much effect is India, where government takes a more protectionist stance.  But given that the vast majority of India’s 1 billion plus people still live in dire poverty, despite its recent economic growth rate, protectionism there may have its own problems.

There is plenty of blame to go around as the economic meltdown goes global.  Here’s one list of the top 25 individuals that share at least some of the blame.  It seems apparent that some new thinking is in order.

Read Full Post »

Both parties have declared their own cease-fires.  We wait to see what the final outcome may be.  It is interesting to note that by each side having declared a unilateral cease-fire, neither had to address the concerns of the other.  Israel got no assurances that the rocket attacks will stop.  Gaza got no assurances that the siege would be lifted.  So, one can argue that the conflict was for naught.  Unless, of course, the rocket attacks were not the real reason for the war.  And it does strike me as “curious” that the pullout came, like Iran’s release of the US hostages in 1981, as the US inaugurated a new president.  In both those cases, the US electorate had signaled that it was time for a change.

So, let’s tally up the damages.  Thirteen Israeli deaths — 4 civilians and 9 military.  Thirteen hundred Gazans — more than half civilians. The siege is continuing almost unabated, imposing further human suffering.  At one point, the Israeli justification for the war shifted slightly — or at least the reporting in the US media shifted slightly — from stopping the rocket attacks to stopping the smuggling of arms into Gaza.  Many tunnels were bombed, and because Gaza is so densely populated, “collateral damage” to homes, other buildings and infrastructure was inevitable.  But as soon as the cease-fire began, the tunnelling began anew.  So, one must ask just what was accomplished.

I will reiterate that I do not support or condone the rocket attacks on Israel.  But I must question Israel’s motives for the war.  Like the US war in Iraq, the stated rationale is shifting.  Independent journalists were barred from the scene, and so it’s difficult to sort out truth from propaganda and self-serving statements from both sides.  One must wonder how much the US inauguration played in the decision to withdraw Israeli troops.  One must also wonder the extent to which internal politics drove the entire war.

Is it possible that the most recent phase in the Gaza conflict was not the result of Hamas rocket attacks?  We in the US tend to side reflexively with Israel.  But what if both sides broke the previous cease-fire?  What if Israel actually committed more violations than did Hamas?  One must ask whether the Israeli-imposed siege and even the war itself had other motives at its core.

Could the attacks on the UN-run facilities — schools, warehouses for food and fuel — have been other than “a grave mistake”?  Consider that the UN has repeatedly condemned Israel over the years for many actions that are counter to Israel’s stated desire for peace.  Were those attacks Israel’s way of thumbing its nose at the community of nations?  How easy it is, once the bombs have fallen, to claim that they were errant.  I’ve recommended a variety of sources beyond the US media — from Al Jazeera English to Professor Juan Cole to Ha’arretz — as a wider scope of inputs can provide balance that is largely lacking in the US reportage.  Today I’m suggesting an article from the UK Guardian.

I am glad for the respite in the fighting and the rocket attacks.  But until both sides, with help, encouragement and even pressure from their friends, decide to pursue a real and lasting solution, the current cease-fire is only that — a temporary lull.

I am encouraged that President Obama may be able to bring a new perspective.  George Mitchell was able to help bring an end to “The Troubles” that had plagued the relationship between Britain and Northern Ireland.  Will he be able to do the same for the Israelis and Palestinians?  Only time will tell.  But in the interim, it is vital for Americans to learn as much as they can about the history of the conflict and to understand that what we read and hear in our media may not accurately represent the realities on the ground.

And then, today, there is this from the Los Angeles Times.  In particular, note the comments from the Israeli peace activists about the moral issues associated with the Israeli response.  They may provide some food for thought for those readers who hew to a reflexively hawkish perspective.  It seems to me that while our baser instincts call for a full-throated armed response, a more measured approach can often bring better results in the long run.  I am glad to see that the United States is returning to the concept of “smart power” and recognizing that the military is but one part of the three that can be used to promote a nation’s interests — the other two being diplomacy and development.

Read Full Post »

We Americans have a new President.  The transfer of power came off smoothly — well, with the possible exception of a slight improvisation by the Chief Justice of the Supreme Court in administering the presidential oath of office.  President Obama’s inaugural address may not have lived up to our expectations of soaring rhetoric.  It may have disappointed those who were looking for something more triumphal.  But while it was fairly short — sure to have satisfied First Daughter Sasha — it was filled with food for thought.

It reminded us of the serious problems that face both our president and our nation.  And it drew each and every one of us into the need to roll up our sleeves and work to solve our problems.  By linking the present to the founding values of our country and to our most revered presidents, President Obama reminded us that when we work together, we can achieve much.  His speech was a clear but very civil repudiation of the immediate past.  And it was a call to action. He had warned us during the transition period that things are likely to get worse before they get better, but today he challenged us to look ahead; to look beyond both the immediate future and the immediate past.

I wonder if those who heard it in person, without the analysis of the media’s talking heads, were aware of the rephrasing of the words and themes of some of his predecessors.  It took the likes of presidential historians to point out those connections.  And perhaps the somewhat subtle nature of his references was done with a recognition that his words would be analyzed by future historians.

The conjunction of the historic nature of his accession to the presidency, the 80th anniversary of Dr. Martin Luther King’s birth, and the upcoming 200th anniversary of the birth of Abraham Lincoln obviously was on the mind of the Inaugural Committee as they planned the event.  And while the words may have been more temperate than some of President Obama’s already noted portfolio of speeches, the imagery was there.  He reiterated his belief in the innate equality of all people — not just of all Americans. He again called us to our better angels.  He called on us to grow up — undoubtedly a first in inaugural addresses!  And yet, there was hope and confidence that as we have achieved great things in the past by dint of hard work, we will again.

I was struck by the imagery of the sea of people who filled every inch of available space, waving small American flags.  It was as if they were reclaiming that symbol.  Too often in recent years it has been used as a claim of righteousness, worn to shield the wearer from criticism and to brand that criticism as somehow unpatriotic.  Yet, here were hundreds of thousands of small flags waving.  We Americans are facing some of the toughest times in recent memory.  Most of those waving the flags today were young.  They were signing up to participate in putting things aright.  Perhaps for the first time in a generation, there is a renewed sense that they are part of something greater than themselves.  They came out to work to elect President Obama, and they are remaining engaged.

The people who crowded the mall today are younger and more diverse than in recent inaugural crowds.  Perhaps their youthful exuberance can be forgiven in the one demonstration of bad form — the boos and catcalls that greeted the outgoing president when he was seated.  Now I am no fan of the forty-third president of the US and I am glad to see him no longer in office.  I am similarly glad to see his entire administration go.  I have disagreed with virtually every one of their decisions, from the tax cuts that sapped the surplus he inherited and ushered in the greatest upwards transfer of wealth since the 1920s, to the denial of science, to the cronyism and corruption, to the war in Iraq, to Katrina, to the myriad cynical ways in which they chose to pit people and groups of people againt each other, to the subversion of the Constitution and international laws and our very values as Americans.  I view the Bush administration as eight years squandered.  Yet, despite the fact that I am glad to see an end to the Bush years, I do respect the office.   I do not understand what drives the man.  That is for the historians to ponder.  But from one human being to another, I couldn’t help but feel some pity for him and for his family.  It must have been difficult for them to hear him mocked.

Read Full Post »

Older Posts »