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Posts Tagged ‘change’

Watching the increasingly irrational arguments being shouted out at town hall meetings, I can’t help but wonder how the protesters can be so very detached from facts.  Their anger seems to go far beyond the health care issue, and they are clearly not swayed by reason.  I think there is another source of the rage, whether the protesters are conscious of that or not.  Many, if not most, of those trying to drown out the debate are senior citizens — people who are already covered under a government-run, single-payer health care system.  Seniors are the only age group in which McCain beat Obama.  I tend to think that many seniors are afraid of change in almost any form, even though most of the seniors in my own family welcomed the kind of change that Obama campaigned on.  And they are  very aware that they are on the downslope of their lives.  Why else would the “death panel” canard be so very effective?  The majority of the shouters are also white — and whites, while still the largest racial group, are becoming a minority of the entire population.  That explains the undertone of racial animus in some of the questions — including the issue of health care for non-citizens, even though most non-citizens are here legally.

Then today, I came across a piece by Bruce Bartlett that helps explain what’s really going on.  It makes a lot of sense. Bruce Bartlett.  Does that name ring a bell?  If you remember the Reagan Administration, it should.  Bruce Bartlett was one of the original “supply siders” who was instrumental in shaping Reagan’s economic program.  He helped author the Kemp-Roth tax bill.   In the years since then, he’s had an opportunity to witness how supply side economics works when it goes from theory to practice.  And he has concluded that it doesn’t work very well, except perhaps for the top few percent of the economic heap.  In other words, for 98% of Americans, it doesn’t work.  Well, Bruce Bartlett has weighed in on the seething rage that has been characterizing so many of the town hall meetings lately.  He says that it’s a lot more than healthcare that is fueling that rage.  He also says that the rage is misplaced.  Because it’s so important, I’m including his article in its entirety as well as providing a link.

Where is the evidence that everything would be better if Republicans were in charge? Does anyone believe the economy would be growing faster or that unemployment would be lower today if John McCain had won the election? I know of no economist who holds that view. The economy is like an ocean liner that turns only very slowly. The gross domestic product and the level of employment would be pretty much the same today under any conceivable set of policies enacted since Barack Obama’s inauguration.

In January, the Congressional Budget Office projected a deficit this year of $1.2 trillion before Obama took office, with no estimate for actions he might take. To a large extent, the CBO’s estimate simply represented the $482 billion deficit projected by the Bush administration in last summer’s budget review, plus the $700 billion Troubled Asset Relief Program, which George W. Bush rammed through Congress in September over strenuous conservative objections. Thus the vast bulk of this year’s currently estimated $1.8 trillion deficit was determined by Bush’s policies, not Obama’s.

I think conservative anger is misplaced. To a large extent, Obama is only cleaning up messes created by Bush. This is not to say Obama hasn’t made mistakes himself, but even they can be blamed on Bush insofar as Bush’s incompetence led to the election of a Democrat. If he had done half as good a job as most Republicans have talked themselves into believing he did, McCain would have won easily.

Conservative protesters should remember that the recession, which led to so many of the policies they oppose, is almost entirely the result of Bush’s policies. According to the National Bureau of Economic Research, the recession began in December 2007—long before Obama was even nominated. And the previous recession ended in November 2001, so the current recession cannot be blamed on cyclical forces that Bush inherited.

Indeed, Bush’s responsibility for the recession is implicit in every conservative analysis of its origins. The most thorough has been done by John Taylor, a respected economist from Stanford University who served during most of the Bush administration as the No. 3 official at the Treasury Department. In his book, Getting Off Track, he puts most of the blame on the Federal Reserve for holding interest rates down too low for too long.

While the Fed does bear much responsibility for sowing the seeds of recession, it’s commonly treated as an institution independent of politics and even the government itself. But the Federal Reserve Board consists of governors appointed by the president and confirmed by the Senate.

Because the president appoints the board, he has primary influence over its policies. This is especially the case for chairmen of the Fed appointed by Republicans because they often have ties to Republican administrations. Chairman Ben Bernanke was originally appointed as a member of the Fed in 2002, serving until 2005, when he became chairman of the Council of Economic Advisers in the White House, a position that made him Bush’s chief economic adviser.

As early as 2002, a majority of the seven-member Federal Reserve Board was Bush appointees, and by 2006 every member was a Bush appointee. While many critical decisions about monetary policy are made by the Federal Open Market Committee, the board’s position always prevails.

The Treasury secretary also has had breakfast with the Fed chairman on a weekly basis for decades. Consequently, most economists generally believe that every administration ultimately gets the Fed policy it wants. Therefore, one must conclude that if there were errors in Fed policy that caused the current downturn, it must be because the Fed was doing what the Bush administration wanted it to do.

To the extent that there were mistakes in housing policy that contributed to the recession, those were necessarily committed by Bush political appointees at the Department of Housing and Urban Development, Fannie Mae, Freddie Mac, and other agencies. To the extent that banks and other financial institutions made mistakes or engaged in fraudulent activity, it was either overlooked or sanctioned by Bush appointees at the Securities & Exchange Commission, the Comptroller of the Currency, the Commodity Futures Trading Commission, and elsewhere.

But in a larger sense, the extremely poor economic performance of the Bush years really set the stage for the current recession. This is apparent when we compare Bush’s two terms to Bill Clinton’s eight years. Since both took office close to a business cycle trough and left office close to a cyclical peak, this is a reasonable comparison.

Throughout the Bush years, many conservative economists, including CNBC’s Larry Kudlow, extravagantly extolled Bush’s economic policies. As late as December 21, 2007, after the recession already began, he wrote in National Review: “the Goldilocks economy is outperforming all expectations.” In a column on May 2, 2008, almost six months into the recession, Kudlow praised Bush for having prevented a recession.

But the truth was always that the economy performed very, very badly under Bush, and the best efforts of his cheerleaders cannot change that fact because the data don’t lie. Consider these comparisons between Bush and Clinton:

• Between the fourth quarter of 1992 and the fourth quarter of 2000, real GDP grew 34.7 percent. Between the fourth quarter of 2000 and the fourth quarter of 2008, it grew 15.9 percent, less than half as much.

• Between the fourth quarter of 1992 and the fourth quarter of 2000, real gross private domestic investment almost doubled. By the fourth quarter of 2008, real investment was 6.5 percent lower than it was when Bush was elected.

• Between December 1992 and December 2000, payroll employment increased by more than 23 million jobs, an increase of 21.1 percent. Between December 2000 and December 2008, it rose by a little more than 2.5 million, an increase of 1.9 percent. In short, about 10 percent as many jobs were created on Bush’s watch as were created on Clinton’s.

• During the Bush years, conservative economists often dismissed the dismal performance of the economy by pointing to a rising stock market. But the stock market was lackluster during the Bush years, especially compared to the previous eight. Between December 1992 and December 2000, the S&P 500 Index more than doubled. Between December 2000 and December 2008, it fell 34 percent. People would have been better off putting all their investments into cash under a mattress the day Bush took office.

• Finally, conservatives have an absurdly unjustified view that Republicans have a better record on federal finances. It is well-known that Clinton left office with a budget surplus and Bush left with the largest deficit in history. Less well-known is Clinton’s cutting of spending on his watch, reducing federal outlays from 22.1 percent of GDP to 18.4 percent of GDP. Bush, by contrast, increased spending to 20.9 percent of GDP. Clinton abolished a federal entitlement program, Welfare, for the first time in American history, while Bush established a new one for prescription drugs.

Conservatives delude themselves that the Bush tax cuts worked and that the best medicine for America’s economic woes is more tax cuts; at a minimum, any tax increase would be economic poison. They forget that Ronald Reagan worked hard to pass one of the largest tax increases in American history in September 1982, the Tax Equity and Fiscal Responsibility Act, even though the nation was still in a recession that didn’t end until November of that year. Indeed, one could easily argue that the enactment of that legislation was a critical prerequisite to recovery because it led to a decline in interest rates. The same could be said of Clinton’s 1993 tax increase, which many conservatives predicted would cause a recession but led to one of the biggest economic booms in history.

According to the CBO, federal taxes will amount to just 15.5 percent of GDP this year. That’s 2.2 percent of GDP less than last year, 3.3 percent less than in 2007, and 1.8 percent less than the lowest percentage recorded during the Reagan years. If conservatives really believe their own rhetoric, they should be congratulating Obama for being one of the greatest tax cutters in history.

Conservatives will respond that some tax cuts are good while others are not. Determining which is which is based on something called supply-side economics. Because I was among those who developed it, I think I can speak authoritatively on the subject. According to the supply-side view, temporary tax cuts and tax credits are economically valueless. Only permanent cuts in marginal tax rates will significantly raise growth.

On this basis, we see that Bush’s tax cuts were pretty much the opposite of what supply-side economics would recommend. The vast bulk of his tax cuts involved tax rebates—which failed in 2001 and again in 2008, because the vast bulk of the money was saved—or tax credits that had no incentive effects. While marginal rates were cut slightly—the top rate fell from 39.6 percent to 35 percent—it was phased in slowly and never made permanent. Neither were Bush’s cuts in capital gains and dividend taxes.

I could go on to discuss other Bush mistakes that had negative economic consequences, such as the Sarbanes-Oxley Act, which imposed a massive regulatory burden on corporations without doing anything to prevent corporate misconduct, and starting unnecessary wars in Iraq and Afghanistan, which will burden the economy for decades to come in the form of veterans’ benefits.

But there is yet another dimension to Bush’s failures—the things he didn’t do. In this category I would put a health-care overhaul. Budget experts have known for years that Medicare was on an unsustainable financial path. It is impossible to pay all the benefits that have been promised because spending has been rising faster than GDP.

In 2003, the Bush administration repeatedly lied about the cost of the drug benefit to get it passed, and Bush himself heavily pressured reluctant conservatives to vote for the program.

Because reforming Medicare is an important part of getting health costs under control generally, Bush could have used the opportunity to develop a comprehensive health-reform plan. By not doing so, he left his party with nothing to offer as an alternative to the Obama plan. Instead, Republicans have opposed Obama’s initiative while proposing nothing themselves.

In my opinion, conservative activists, who seem to believe that the louder they shout the more correct their beliefs must be, are less angry about Obama’s policies than they are about having lost the White House in 2008. They are primarily Republican Party hacks trying to overturn the election results, not representatives of a true grassroots revolt against liberal policies. If that were the case they would have been out demonstrating against the Medicare drug benefit, the Sarbanes-Oxley bill, and all the pork-barrel spending that Bush refused to veto.

Until conservatives once again hold Republicans to the same standard they hold Democrats, they will have no credibility and deserve no respect. They can start building some by admitting to themselves that Bush caused many of the problems they are protesting.

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Yesterday I was shouting at my radio as I listened to some of the stuff I was hearing about the stimulus package — read JOBS bill.  Some GOP Senators were talking about how pork-filled it was and that they were going to filibuster it.  Today I read that several of those same Senators, including John McCain and John Kyl, aren’t going to be there to vote no.  That’s cool.  That makes it that much harder for them to pull off the threatened filibuster or to block the bill.  Every day we hear of more layoffs, more pain spreading through the economy.  It’s pledge season for my local NPR station, and they were pleading for contributions, saying how important it is to have non-commercial media available as an alternative to the corporate-owned stuff we’re inundated with.  We’ve supported PBS and public radio for years because we find that it does a better job at being truly fair and balanced than does corporate-owned media.

Then today, I found this summary of what the bill ACTUALLY contains, stated in simple terms.  The author is an ordinary American who has taken the time to read the entire bill.  She (and I) are tired of the ranting over less than 1% of the total — ranting that’s intended to keep us scared in our lack of information.  And there are links to the text of the actual bill.  So, my fellow Americans, it’s time that we went around the talking heads, whether they are the media or members of Congress.  Remember, the media is interested in ratings, and controversy garners ratings.  Remember, too many members of Congress are in it to serve their own interests or those of their corporate masters, NOT the interests of the country.  Read it for yourselves.  See what it actually says — where the money would go, the restrictions, the oversight, the transparency.

Then, consider a couple of other points.  What are the consequences of doing nothing?  Of doing too little?  Is it really worth sinking the whole thing for less than 1% of the total?  And while you’re considering, read this piece by Tom Friedman.  It’s up to us, folks.  We need to get ourselves off the couch, read the bill (takes notes and really think about what it proposes), then call or email our Senators.  And once the Senate passes a bill, we need to follow the progress of the conference committee and keep the pressure on both our Senators and our Representatives.  We voted for change.  But we need to be an active participant in that change.  That change won’t happen otherwise.  And if it doesn’t, we will need only to look in the mirror to see who’s responsible.  President Obama has said that we are in a new era of personal responsibility, and that responsibility includes being active participants in our democracy.

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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.

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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.

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Whether you have just celebrated the winter solstice or the end of the Hajj season, or you’re celebrating Hanukkah, or you’re about to celebrate Christmas or Kwanzaa, or you view this time of year as a secular holiday filled with good old American over consumption of food, drink, and things, my wish for you is much happiness and joy.

The lights are up, the trees are decorated, the packages have finally been mailed, and my kids will (barring unforseen weather events) receive their boxes before the 12th day of Christmas.  The cards will be New Year’s cards this year.  I’m still awaiting delivery of one order, and there isn’t yet a cookie baked.  Sorry, Mom, I’ve never been able to live up to your standards on that one… a batch a day beginning the day after Thanksgiving.  We’ll settle this year for mostly bar cookies because they’re faster.  And I still have gifts to wrap and a house to clean.  But what doesn’t get done will be overcome by the sense of good cheer.

We will celebrate, more simply this year than in other years.  Some family members will travel to join us, while for others, phone calls will have to suffice.  We are blessed with a home while so many others have lost theirs.  We will be surrounded with family while others are alone.  We are blessed with more than enough food while so many others will go hungry.  We will be able to call absent loved ones, knowing they are safe, while others are far away from home and in danger.

But rather than seeing all the need as a downer, isn’t it also an opportunity for each of us to be that change we hoped for?  As we move towards a new administration, I’m inspired to plug in and see where I can meet some of that need.  I have time to give.  I know there is need.  I’m terrible about resolutions, but just this once, I’d like to remain resolute.  If the true meaning of Christmas was the gift of a child to show us how we should treat our fellow travelers on this speck of space dust, doesn’t that mean that each of us can pay that gift forward in our own small way?

Like many others, I was disheartened by the choice of Pastor Rick Warren to give the invocation at the inauguration.  But then I read a piece this evening by Melissa Etheridge.  As she says, the choice is ours.  Regardless of who we are or what we have, we have a choice on how we treat each other, how we treat our earth.  So, while I’ll be away for the rest of the year, I’ll also be thinking about the choices I can make to be that change we’ve been waiting for.

So, merry, merry, happy, happy.  See you at the turn of the new year. May these next days be filled with love and joy for each of you.  And may 2009 be the beginning of something new and wonderous.

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Ok, I’ve had a couple of days to come down from my election night elation.  The hints of change are in the air.  Change is one of those words that can mean different things to different people.  Some welcome change, others resist it with all their might.  The recent economic melt-down and the election will both result in changes for many of us, and change can be as unsettling as is living in close proximity to the San Andreas Fault.  It’s important to recognize and even honor that unsettling feeling — that somehow things are shifting all around us.  But change is also an opportunity — a chance to think about things from a different perspective, gaining new insights, and deciding to do things differently than before.  After all, that’s what over 63 million Americans voted for.

President-elect Obama has selected his Chief of Staff.  The brickbats coming from elements on both sides of the aisle make me think that it’s probably a very good selection.  Those who worry about a potential shift from promised bipartisanship should take careful note of the composition of the economic team Obama will be meeting with later today.

  • David Bonior (Member House of Representatives 1977-2003)
  • Warren Buffett (Chairman and CEO, Berkshire Hathaway)-will participate via speakerphone
  • Roel Campos (former SEC Commissioner)
  • William Daley (Chairman of the Midwest, JP Morgan Chase; Former Secretary, U.S. Dept of Commerce, 1997-2000)
  • William Donaldson (Former Chairman of the SEC 2003-2005)
  • Roger Ferguson (President and CEO, TIAA-CREF and former Vice Chairman of the Board of Governors of the Federal Reserve)
  • Jennifer Granholm (Governor, State of Michigan)
  • Anne Mulcahy (Chairman and CEO, Xerox)
  • Richard Parsons (Chairman of the Board, Time Warner)
  • Penny Pritzker (CEO, Classic Residence by Hyatt)
  • Robert Reich (University of California, Berkeley; Former Secretary, U.S. Dept of Labor, 1993-1997)
  • Robert Rubin (Chairman and Director of the Executive Committee, Citigroup; Former Secretary, U.S. Dept of Treasury, 1995-1999)
  • Eric Schmidt (Chairman and CEO, Google)
  • Lawrence Summers (Harvard University; Managing Director, D.E. Shaw; Former Secretary, U.S. Dept of Treasury, 1999-2001)
  • Laura Tyson (Haas School of Business, University of California, Berkeley; Former Chairman, National Economic Council, 1995-1996; Former Chairman, President’s Council of Economic Advisors, 1993-1995)
  • Antonio Villaraigosa (Mayor, City of Los Angeles)
  • Paul Volcker (Former Chairman, U.S. Federal Reserve 1979-1987)

The team consists of people in both representing government at the local, state and Federal level, as well as corporate American in a variety of sectors of the economy, Republicans and Democrats.

Shortly before the election, Obama talked of bringing some of the lessons learned from the use of technology during the campaign into the White House.  That’s already being done with the launch of a new website for the Office of the President-Elect that will be a communication tool for Americans interested in the transition.  Already this incoming administration is feeling more inclusive and a continuation of the pledge to listen as well as to inform.

And with the election over and done, the focus of this blog will broaden as well.  That’s not to say that politics will disappear, but I plan to include additional discussion of issues, of governance, of the challenges faced by both the Republican Party and by conservatives in general.  I will also share some thoughts on larger topics — things like climate change, sustainability, and some international issues.  I updated my “About” page today to share some of my educational background, so expect some disucssion stemming particularly from my grad school days.  I look forward to your responses as we continue the conversation.

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We’ve heard a lot recently about the “real” America. 

 Which is the real America? Imagine. Hope. The choice is up to you.  You decide.  Be sure to vote.

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