Archive for November 2012

No Duh Moments

The Republicans, with the pundits repeating their nonsense, have said they will have to communicate more effectively with minorities and reach out to them. In other words it is all about re-messaging. This is kind of like a candy manufacturer who produces just a horrible tasting mess of sugar and nuts deciding the sales problem is the packaging. Packaging might be part of the problem, but the real issue is the product itself. Sadly, the reality is that the Republican are just flat wrong about the product, from gays to immigration, from government spending to the economy, and from women’s issues to science. They can’t just change their stripes, to use another cliche, and expect to be viable again, they have to change their policies. I think as Robert Shrum wrote in the Daily Beast the other day, it may be two or three Presidential election cycles before they get the message and are able to transform their base from old fat angry white men who are proud of their ignorance. Of course then they would be moderate Democrats.

The other day I wrote a blog on my own experience as an engineer providing flood protection in the lower Mississippi Valley and trying to point out that it was fruitless (The Corps of Engineers Syndrome) if the government keeps underwriting risky building in flood zones. The problem is that our federal government (you and me) underwrite flood insurance in high risk areas encouraging people to rebuild in areas that are just going to flood again and again. Well, more informed people than I took up the topic with the data that most should understand if we are going to end this wasteful and fruitless program and was in an op-ed in the NYT yesterday (End Federal Flood Insurance) in response to the Sandy rebuilding. Another no duh moment in the obvious, but special interests will continue to influence Congress to put us all at risk, living in flood plains and paying for the disasters that result.

Words are important and you really have to pay attention to their nuances. In the discussion about reigning in Medicare and Medicaid, the majority of Americans are against cuts to entitlements including raising the age eligibility requirements. President Obama has already saved $750 billion in cuts to costs, not entitlements, that amazingly the Republicans promised to restore if they one election.  Now they want massive cuts in entitlements. So note the wording in the President’s proposal to Republicans on the the fiscal cliff, that he will find additional “savings”. The Republican approach is the meat clever approach of cutting entitlements which as with most things Republican, goes after the effect, not the cause (deficit anyone?). The Democrats recognize that the benefits are minimal and necessary and look for savings in more cost effective ways to provide those entitlements. It recognizes that in most of the rest of the modern world, they provide more “entitlements” at half the cost. Another no duh moment in moving forward while the Republicans can’t think outside their carefully crafted ideological box.

Apparently there are major protests in Egypt about their Constitution that was just rammed through a Muslim Brotherhood legislative body. It just amazes me that we are celebrating the birth of “democracies” in the Middle East, when they ignore the core principle of all successful democracies, minority rights. Any democracy based upon a religious fundamental idea of right and wrong is really a tyranny of the majority and that is what you are getting in the Middle East. Maybe they will evolve into recognizing the rights of the minority, but I don’t think so in countries where the sense of right and wrong is interpreted through religious intolerance. Another no duh moment in thinking things are really any better in the Middle East.

Speaking of minority rights, we are having a real discussion about the filibuster where it has allowed the tyranny of the minority. When the Democrats took power, sort of, back in 2006 in the House, nothing really got done as Republicans like to claim, because the Republicans in the Senate blocked anything the Democrats wanted using the filibuster. That has been their modus operandi since then with the average of 1 filibuster a week to block progress.  Now Democrats finally recognize the need to tweak it around the edges. It should be done away with totally. The Senate is already a very undemocratic body since Republican Senators only represent 34% of the American public yet they control what gets passed and not passed. The Constitution was clear about what should require a super majority and the filibuster is just an idea in the rules of the Senate that is past its prime. Another no Duh moment in the obvious, but Harry Reid will only tinker at the edges. Oh by the way, could we get rid of the “hold” that gives an individual Senator control over any nomination for any position?

One last thing. I will remind you that in my blog (Hi Ho, Hi Ho, It is Over the Fiscal Cliff We Go) I predicted that there will be no compromise. I listened to Howard Dean last night on The Last Word with Lawrence O’Donnell, talk about how that is the best thing that could happen to control the deficit. What was left out of this discussion was that we need stimulus spending to not stifle the economy with this massive austerity bomb that the Tea Party forced upon us. I think Democrats need to be careful. While they get raised tax rates on the wealthy and major cuts in defense spending that is probably unobtainable any other way, they must not forget to push that we need to use the savings to create jobs. If they leave this discussion out of the equation like Howard Dean did, they allow the discussion to focus once again on the deficit instead of jobs, which is what the election was about. Paul Krugman today in Class War 2012 addressed how the plutocrats are using this moment to protect their interest by using just this tactic. Another no duh moment is that the real problem is about jobs, not the deficit.

Last Word on the Susan Rice/Crotchety Old Men Debacle

Jon Stewart gave us the best insight into the hypocrisy and pure evilness of the McCain/Graham attack on Susan Rice.  Enjoy:

Who Said it Best Today: Lincoln Mitchell

Fox News has done more damage to this country than just about any other media outlet or for that matter anyone else, with its either false new, or its one sided coverage which allows Republican talking points to go unchallenged and creates a whole base of uniformed voters.  This may be coming to an end.  In a Huffington Post editorial, Lincoln Mitchell (Harriman Institute, Columbia University) writes that Fox may be damaging themselves and the Republicans (Is Fox Even Helping the Republicans Anymore?):

One of the bigger challenges facing the Republican Party is that they are perceived as the, to phrase it nicely, less smart of the two major parties. The anti-science perspective, unwillingness to speak out against absurd sounding conspiracy theories, and even the attacks on Nate Silver, presumably because Silver did somewhat sophisticated math, have contributed to this and are damaging the party. It is no coincidence that the Obama campaign had a more sophisticated targeting and turnout operation and better statistical modeling. A party that refuses to take a firm stand in support of evolution or recognizing climate change is not going to draw too many people with advanced statistical training as advisors and consultants.

Fox contributes to that environment by creating a climate where partisan rantings of people like Dick Morris are indulged while criticism by serious people like Tom Ricks is shut down and attacked. There is no inevitable link between conservatism and stupidity, but one could be forgiven for coming to that conclusion while watching Fox News. As it is currently constructed, Fox News is going to bring in almost no swing voters in the coming years. It will more likely continue to repel them through poor analysis and rants that strike the precise tone the party should be trying to avoid…

Unfortunately for the Republicans, while this is bad politics, it is good business for Fox. By positioning itself as the place where angry Republicans can go for their rhetorical red meat, Fox guarantees itself a sizable viewership, so the incentive for Fox to keep doing what it is doing is substantial, as is the potential damage to the Republican Party.

Live by the sword, die by the sword and none of us will miss you.  We need a nation who thinks, not reacts.

Compromise? Really?

My morning routine involves driving down to the mailbox (1/4 mile down a steep hill) at o’dark thirty to get the newspaper and also give my golden retriever a ride in the truck, which she pouts about if I don’t exactly follow this routine.  So my satellite radio was on and  I was tuned to MSNBC and I listen to Chris Jansing interview some Progressive Congressman about going over the cliff, which he felt would provide Democrats with better leverage in the negotiations.  Jansing countered rather vigorously with the question, “What makes you think the Republicans will negotiate then (after going over the cliff) rather than now.”  Implicit in this questions was be afraid, be afraid, the Republican talking point.

No, I did not hear the answer because I was so frustrated with the question, I turned her off.  But here is what my answer would have been:  “Gee Chris, so implicit in your question is the assumption that we should just cave to what the Republicans want like we did last time?  What you are really saying in your question is that taking the nation hostage with terrorist demands should be tolerated?  And in answer to the question, when we go over the cliff, it will be obvious who caused it and we will take it to the American people.  They have already weighed in on tax cuts for the wealthy in the election. Republicans are already irrelevant, and this will be political suicide for 2014.”

There are really two things to consider when looking at compromise that everybody who is a talking head or a pundit seems to want.  The first is to consider how extreme the Republican Party is.  They have moved the country far to the right during the Clinton and Bush years, and George Bush brought us Republican Valhalla, minimal enforcement of regulations and rock bottom tax rates, and the deficit bloomed, the economy sputtered and then blew up.  Now what the Republicans are fighting for is an extreme position backed by failed policies and compromise just moves us further to the right.  They move the ball 10 yards down the field to Right Lunacy, and we compromise with a 5 yard gift?  Why would we want to do that?

Second, the two views of the economy are diametrically opposed.  The Republicans’ view is to pay off the debt so that the wealthy will have “confidence” and create jobs while maintaining their “job creator” status.  The problem with this is an unblemished record of failure in this economic philosophy (See Europe and their austerity or job creation during the Bush years).  As the wealthy get more concentrated wealth, the economy falters (See Why Nations Fail or Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else).  They are fighting to maintain this unequal distribution of income and if you believe history, continue to weaken our economy and our economic future.

Meanwhile Progressives understand that we must raise up the middle class as the only way to get our economy going again versus the flow down that has failed under the Republicans.  They understand that the deficit is not the problem, but a symptom of a lackluster economy that is not growing.  The problem is jobs.  If you gut Medicare and Medicaid, and only increase tax rates marginally on the wealthy, you simply leave the problem in place while forcing those who have already suffered under these policies to pay price.  So why compromise if the end result does not solve the problem. Like last time when the Democrats compromised on the Stimulus and the Debt ceiling, nothing got better and  simply gave the Republicans a reason to say once again, “See, the Democrats ideas don’t work” when the Republicans made them ineffective with their compromised positions.

So no, don’t compromise.  If we go over the curb, we have just taken care of the tax cuts to the wealthy and there will be tons of pressure on Republicans to restore middle class tax cuts.  The other spending cuts need to be addressed one -on-one.  Defense certainly needs to be cut.  And note, if you follow my yesterday’s recomendations, that money will be reinvested into the economy in more productive ways, so there is no net loss in spending and we create jobs.

One last shot over the bow.  I listened to ex-Senator Alan Simpson of the Bowles-Simpson plan discuss how we need to raise the rates on the rich because he understands that without revenue, you can’t solve this problem.  But then he went off on the debt causing growing interest rates and inflation.  This is basically the argument that the CEO’s have launched to get a deal before we go over that speed bump.  It is the confidence fairy argument again where the problem is the deficit, not a lack of jobs and a growing GDP.  It is a failed argument as Paul Krugman has documented for the last four years (Incredible Incrediblity).  It is solving the wrong problem and nothing will get better.

First Republicans, CEOs, and VSPs (Very Smart People) have been saying our borrowing will drive up the interest rates and yet it is at record lows as predicted by Keynesian Economics in a severe recession.  It is not going to go up no matter how much we borrow until our economy takes off, because there is no strong demand for borrowing in a depressed economy.  When the economy takes off, you can then throttle back spending, controlling the interest rate, but first it has to take off and that means jobs.

The inflation argument is the other one that has been repeated over and over again since 2008 once it was obvious that we are printing money to pay our debts.  The trouble is two-fold.  First is a little inflation would be a very good thing.  Holding on to money during a period of inflation just makes it decrease in buying power, and there would be an incentive to invest and grow our economy.  Second, once again, Keynesian Economics tells us that there won’t be any or very little inflation until the economy starts to grow, and as Paul Krugman pointed out after WWI, France took the print money approach to solving their problems and weakening their currency while England took the responsible austerity approach, and guess whose economy did better and recovered earlier (Twenty Tales)?

My point is simple.  The people who are holding sway in this debate and pushing compromise and debt reduction have it all wrong.  Not just wrong in my opinion, but demonstrably wrong by all the data out there.  So why are we listening to them?  Because we are stuck in our home budget analogy and just can’t grasp the lessons of the world around us.  The only way to solve our problems is to grow our middle class, redistribute the spoils of our economy, and create jobs.  The debt will take care of itself if we follow Keynesian Economics and throttle back spending when the economy blossoms (see what happened after WWII with our massive debt, we just simply grew out of it).  So listening to this false BS on the TV makes me want to drive the car off a cliff.  Will we ever learn?

Rachel Nails It

Rachel Maddow tonight may have nailed why there is this Republican vendetta (McCain and Lindsey Graham) to tarnish Susan Rice. They want John Kerry as Secretary of State so his Senate seat comes open and they can run Scott Brown for his seat in a special election. Otherwise it makes no sense at all.

Talking Nonsense

I think I am about to throw up. I have understood that change is hard, but this is ridiculous. The business community/wall street has sent out their “financial wizards”, you know the ones who did not see the bubble, drove the economy into the ground, and profited nicely, to explain to us that we can’t afford to go over the fiscal cliff, and oh by the way, we need a serious cut in entitlements. Oh and did I mention we ought to keep the tax cuts for the wealthy? Prime example was David Cote, CEO of Honeywell, on Meet the Press Sunday, but there are others (Huffington Post).

Lets see, these guys are part of the biggest give away in the history of the country in the form of tax breaks, tax loop holes, and policies friendly to their increasing wealth, but now that we have figured out we can’t afford it, the people who have suffered the most must pay up. Does this not make you want to strangle those that interview these people and treat them with hallowed respect? And it is all the rage, “both sides must give”. No, one side has been giving and giving to the “job creators” and there have been no jobs. Sadly some of the morons in the Democratic Party are following this conventional wisdom and it is why they will never really lead the nation.

Let’s do a little critical thinking. Are entitlements growing and are they a problem? Yes and by entitlements the Right means Social Security, Medicare, and Medicaid. But first and foremost, Social Security has nothing to do with the deficit. It is funded separately and with some increases in the payroll tax and lifting the limit on the amount of income that can be taxed, bingo, problem goes away. Note that if we just started growing our GDP the problem would be immediately lessened and we do that by creating jobs, not but reducing benefits, raising the age, and generally reducing spending in the economy.

Medicare and Medicaid do impact the deficit and they are growing, but their growth has decreased (costs, not benefits) recently. Enrollees have increased dramatically because the Republicans drove us into a ditch with doing what the financial boys wanted. But now we must do some critical thinking here. The implicit assumption in all this reduce the deficit by reducing entitlement costs is that this will only be accomplished by cutting benefits. See a problem here? We are not looking at what is driving these cost growths and when we compare our costs with those of other countries who provide more benefits at less cost, with better aggregate outcomes, our system is out of control. So if you focus on cutting benefits and do nothing about what are driving the costs, you simply kicked the can down the road and we will have to do this again soon.

No, ladies and gentlemen, our problem is not that our entitlements are too generous. In fact these are not the problem at all. The problem is that we do not have a growing economy where we all share equally in the spoils. The Republicans are cleverly using their created crisis, the fiscal cliff, to once again drive policy with “we both have to give something”, and in effect just maintaining the status quo. Our number one concern should be creating jobs and the whole “crisis” around the fiscal cliff simply emphasizes what creates jobs in a contracted economy, government spending. The problem with our current spending on the wealthy in the form of tax breaks, is that they don’t spend those benefits, or said another way, if there is flow down, where are the jobs?

So here is what Obama and Democrats should do:

  1. Entitlements are off the table, period unless you want to talk about reforms to fund them
  2. Go over the fiscal cliff because then at least the middle class tax cuts will be sustained
  3. Look at ways to increase revenues through tax reform, streamlining of government, and cuts to defense
  4. All of the savings get reinvested in stimulus spending (not tax cuts) to invest in a 21st century infrastructure, including affordable education
  5. Put an automatic trigger in our GDP growth so that when it reaches a certain level, a certain percentage of tax revenue then goes to paying down the deficit. In other words, when the economy takes off, instead of increasing our spending with it, we let it sustain itself and we start reducing our debt (Keynesian Economics anyone?)

It is really fairly simple, but nobody gets it. Until we recognize that the real problem with our economy is not the deficit, or entitlements, or takers and makers, but is the concentration of wealth in a few, nothing changes. Once we understand that if the spoils of our economy are more equally shared, the economy will grow, and all of us benefit, then we can get on with fixing our problems. But as long as we think both sides have to give when one side is almost bankrupt, we are doomed.

Who Said it Best Today: The Daily Beast

“Outside the South, President Obama defeated his opponent 55 to 45 percent, winning a landslide there as well as in the Electoral College. The bottom line: Romney got elected president of the old confederacy.”

John McCain – The Perfect Republican

John McCain has become the perfect symbol for the Republican Party, fat, white, old, out of touch, and vindictive. It is such a shame but there it is. I was a Vietnam Vet and I once admired John McCain, but not anymore. I guess the lesson here is that who you are is defined by what you do today and tomorrow. Yesterday is old news.

Opinion is Not Fact

One of the things (of the many according to my family) that drives me crazy is uninformed opinion or intellectually lazy conclusions that state something as fact. It may or it may not be, but the opinion offered has no bearing on it. I will start with the mundane and work toward the important. I was watching a football game on TV Saturday and there was a call of interference with catching a punt and the announcer (most football announcers are truly scary with their football cliches) went on and on about how the offender had not touched the receiver till after the catch. I was thinking, has anyone read the rule book? Isn’t there a clear zone that has to be maintained? It would have been nice, instead of criticizing the referees, to discuss the rule, and then see if the call was called incorrectly. But opinion was offered as facts, no infraction, instead of examining the rule and a logical argument justifying the conclusion. The opinion simply sufficed in the announcer’s mind.

In the world of pundits and reporters it even gets worse, much worse. My favorite was listening to Howard Fineman, a liberal reporter for the Huffington Post, tell how he had talked to some business executives he knew and trusted in New York, and they were not investing in new jobs because they felt the uncertainty in the economy. Of course this supports the Republican talking points that we have a supply side problem where the business community won’t expand because they lack confidence in the economy, aka Obama. But it was just an opinion, not support by anything but socially incestuous business people reinforcing each other’s opinion. When a real economist did a real survey of both large and small businesses, the finding was that there was a lack of demand, people’s will to spend money to buy stuff. If people were spending (had disposable income), they would expand. Stimulus spending anyone?

But the most damaging opinion out there, and you hear it from pundits like Tom Friedman who spends way too much time getting his economic opinions from business leaders instead of looking at data, is that we have this problem of a lack of skilled workers. It is called the structural argument about unemployment, i.e., there are plenty of jobs, but people are not trained to fill them thus we must be retraining our workforce. But the facts don’t support that. First as Dean Baker has said many times (co-director of the Center for Economic and Policy Research), if there were a true shortage, you would see wages going up in those specialties. See also Paul Krugman. But now a real journalist enters the picture.

Adam Davidson, in Skills Don’t Pay the Bills, gives us this account:

Eric Isbister, the C.E.O. of GenMet, a metal-fabricating manufacturer outside Milwaukee, told me that he would hire as many skilled workers as show up at his door. Last year, he received 1,051 applications and found only 25 people who were qualified. He hired all of them, but soon had to fire 15. Part of Isbister’s pickiness, he says, comes from an avoidance of workers with experience in a “union-type job.” Isbister, after all, doesn’t abide by strict work rules and $30-an-hour salaries. At GenMet, the starting pay is $10 an hour. Those with an associate degree can make $15, which can rise to $18 an hour after several years of good performance. From what I understand, a new shift manager at a nearby McDonald’s can earn around $14 an hour.

The secret behind this skills gap is that it’s not a skills gap at all. I spoke to several other factory managers who also confessed that they had a hard time recruiting in-demand workers for $10-an-hour jobs. “It’s hard not to break out laughing,” says Mark Price, a labor economist at the Keystone Research Center, referring to manufacturers complaining about the shortage of skilled workers. “If there’s a skill shortage, there has to be rises in wages,” he says. “It’s basic economics.” After all, according to supply and demand, a shortage of workers with valuable skills should push wages up. Yet according to the Bureau of Labor Statistics, the number of skilled jobs has fallen and so have their wages.

The point is simply this: We spend our political energy solving problems that are not the real problems and we get nowhere because we do not know how to think critically. We insert what we want to believe with opinion that reinforces our misconceptions. Did the referee make the wrong call above? We won’t know unless we understand what the rule book says. Is our lack of jobs because business lacks confidence? We won’t know until we really look at the market and ask what would happen if there were real customers wanting to buy stuff. Does our workforce lack critical skills and with retraining unemployment will go down, or is the real issue the lack of good paying jobs that would incentivizes workers to get the skills? Again talking to businessmen tells us nothing until we look at the data.

We are a nation that seems to lack critical thinking skills and are immobilized by what we want to believe instead of what is. That is why opinion instead of fact holds such sway and why pundits think a consensus of opinion results in facts. Until we can throw off the shackles of what we want to believe and just look and what is, we are chasing windmills. Deficit reduction anyone?

Liberals Fear Obama with Good Reason

There was an article in the Washington Post about how liberals fear that Obama will once again give away what he was handed in the election. I think they fear with good reason. That is his history, and I still don’t think he really understands Keynesian economics, which has been the model to use to describe what we are going through. The deficit is not the problem, but a symptom of the problem and yet he talks about solving the deficit problem instead of leading us with a discussion of about how we need to create new jobs so we have the ability to then deal with our deficit. I still think he believes that we can do both, i.e., some sort of compromise, and if he does, once again he will have squandered what the voters handed him.

I guess my real concern is that if he leads forcefully, he could end conservative nonsense about the economy forever, and if he doesn’t, he lets them right back in just like he did last time by allowing them to define the issues. If he were to go after jobs, and really improve the economy, 2014 and 2016 would force the Republicans to come back into the mainstream. And make no mistake, this election was not a lurch to the left, but a small move back to the center right. Don’t get carried away with the weed approvals and gay marriage. This is kind of recognizing failed policies and wasted dollars fighting what doesn’t need to be fought. But the nation, or at least the pundits and maybe the President are living in the dark ages of economics where they think we can cure our economy with just a little less severe austerity than the fiscal cliff.

So it is up to Democrats to lead if he won’t or can’t. I could be jumping the gun, but I think we are seeing the leanings once again to some kind of a bargain with entitlements. I hope not, because if he does, he has missed the boat once again, and Democrats in the Senate and House will have to lead. He has such an opportunity to define our future and change the dialogue from small thinking to big thinking. Will he? Will he go over the cliff and define the debate as he needs to? He hasn’t yet and if he doesn’t, if Democrats want to gain control in 2014 and 2016 they will have to pull him along. I am doing my part.