Category Archives: Obama

One Great Speech and Two White Whines

Michelle Obama 2016 Atlantic magazine called Michelle Obama’s speech last night one for the ages. It was.  Even Vogue got into the act.

“The story that has brought me to this stage tonight. The story of generations of people who felt the lash of bondage, the shame of servitude, the sting of segregation, but who kept on striving and hoping and doing what needed to be done so that today, I wake up every morning in a house that was built by slaves. And I watch my daughters, two beautiful, intelligent, black young women, playing with their dogs on the White House lawn. And because of Hillary Clinton, my daughters and all our sons and daughters now take for granted that a woman can be president of the United States.”

It doesn’t take any imagination to figure out that the Trumpers are going to take exception to this, because they have already:

“All I hear is bitch bitch bitch yes there where slaves in the usa but how many white people died to free the slaves? I get really sick of black people bitching about someone way back when in their family might have been a slave (not likely less than 10% can really trace their family to slaves) and now they want money for something that has nothing to do with them. Till you can get over the fact that long long ago there where slaves in the usa remember the only about 5% of the slave trade came to the usa the rest went to south america.” [IndJourn]

And, this morning on the Thom Hartman show some ignorant fool from Nevada called in to whine, “Why did she (Mrs. Obama) have to bring that up, it’s just divisive.” Or something to that effect. I can’t match the inarticulate nature of his complaint. Beginning with “I’m a 64 year old white man…”

So, here comes the rant

Get some history.  The first enslaved people were hauled to Virginia in 1619; there were about 20 Africans sold into slavery before the Pilgrims even landed on the coast of Massachusetts.  In 1636 the first American slave transport ship, ironically named the Desire, set out from the Massachusetts docks.  It’s not until 1865 that slavery is officially abolished in this country in the 13th Amendment to the Constitution.  That’s 246 years of slavery.

That would be 246 years of putting up with the likes of one slave owner who wrote in his diary for September 3, 1709: “My wife was indisposed again but not to much purpose. In the afternoon I beat Jenny [a house slave] for throwing water on the couch.” [EyewitnessTH]

Yes, the majority of enslaved people were transported to the Caribbean and South American regions. Professor Henry Louis Gates, Jr. puts the number of slaves brought directly to the US at about 450,000.  So, irrationally, our first commentator leaps to the conclusion that only about 10% of the current African American population can trace their ancestry to a slave. Nice try, but not even close.  In order to make this leap of faith (and not fact) we’d have to assume that the children and grandchildren of those imported to this county against their will weren’t enslaved? Nope Dope, the children, the grandchildren, the great-grandchildren, likely multiple generations of progeny were enslaved like their forefathers and mothers.

And, why isn’t it easy for an African American person to trace the family tree? Because slave owners wrote things like “Henry, age 17, 5’4” in their records. [USArchives]  It doesn’t matter if 450,000 or 4 million people were initially brought to this country enslaved – slavery was wrong in the first place; and, there’s absolutely no way to assert that their children, their children’s children, and their children’s children’s children … were bought, sold, humiliated, beaten and badgered for 246 miserable years.

What matters is the fact that the great-great-great granddaughter of Melvinia Shields, a slave in northern Georgia, was standing on the podium of the Democratic National Convention last night talking about how she was living in the White House and her daughters (the great-great-great-great granddaughters of Melvinia Shields) were playing with their dogs on the south lawn.

However, the White Whiners aren’t finished. Notice the second part of the comment, the one with the “long long ago” phrase – there are a couple of blood boiling feathers attached to this chicken statement.  The assumption here is that the whole “slavery” issue is long ago and far away, and therefore not part of our collective existence.  This is an easy assumption to make IF and only IF we ignore the fact that on March 21, 1981,  Michael Donald, an African American resident of Mobile, AL was the victim of the last recorded lynching in America.  The record before then was even worse.

“Researchers said they determined that 3,959 black people were killed in “racial terror lynchings” in a dozen Southern states between 1877 and 1950. The new number includes 700 people who were not named in previous works seeking to comprehensively document the toll, the authors wrote. Some of those previous studies were conducted at a time when lynching was still an ongoing phenomenon.” [WaPo]

So, only 28 years after the last recorded lynching of an African American man in the United States, an African American mother is watching her girls leave in Secret Service vehicles from the White House to go to school.

Our 64 year old White Whiner was born in 1952, he was 29 years old when the last lynching took place in this country, and he doesn’t want to talk about slavery, race, or all that divisive stuff.  He’s white, and he’s uncomfortable when people talk about things white people did, and he certainly doesn’t want to be reminded that he’s obviously uncomfortable with African Americans.

As far as he seems to be concerned it’s up to African Americans to make him feel comfortable.  Let’s guess he’s upset that the African American President understood how the parents of Trayvon Martin felt, and how the Talk hadn’t been enough to save their son from a gun happy bigot.  Thin (white) skin and contemporary issues aren’t a good mix.  He’s upset that the African American President might understand how a small suburban police force could be so insensitive to the people they were supposed to serve?  How a toxic combination of revenue collection and racism could exacerbate an already tense situation?

Our 64 year old white whiner was 15 in 1967 and 21 in 1973, just in time to watch the Watts Riots (1965), the Detroit Riots (1966), and the Newark Riot (1967).   Far from understanding what precipitated these events, he appears to have decided that “hard-working Americans” means “white.”  “Those” other people (black) riot.  He was 28 years old in 1980, in time perhaps to vote for Ronald Reagan, and the “morning in America,” which dawned at the Neshoba County Fair, Mississippi.

Perhaps our 64 year old white whiner just doesn’t feel safe anymore?  The Hispanic population of his home town, Las Vegas, is now about 1/3rd of the total. 11% or so of the population is African American, and another 6% are of Asian descent.  Clark County isn’t the home to the 277,230 people in Las Vegas as it was in 1970; it’s now home to a very diverse 603,488.  Nor is it a place where racist, sexist, or ethnic “humor” is tolerated as it was 50 years ago.  He can’t say the N-word outside of a tight circle of like-minded companions. He can’t crack jokes about ethnic groups outside the confines of that same tribal group. He can’t complain about women in the work-force without risking censure.  He can’t feel comfortable with all that “political correctness” (read civility) requiring him to tolerate people he finds intolerable.  He can’t comprehend that arguing against the toleration of others is simply another manifestation of white privilege, white tribalism, white supremacy.

And, he can’t understand how the African American mother, the great-great-great granddaughter of an enslaved woman in northern Georgia, could be speaking of the promise of America, and the progress of this nation, when she mentioned the very thing that makes him uncomfortable – the fact of slavery, segregation, and discrimination in the United States of America.

“So look. So, don’t let anyone ever tell you that this country isn’t great—that somehow we need to make it great again—because this right now is the greatest country on earth. And as my daughters prepare to set out into the world, I want a leader who is worthy of that truth.” [Atlantic]

Comments Off on One Great Speech and Two White Whines

Filed under Democratic Party, Obama, Politics

The Media Was Warned: Trump Campaign is one giant Gish Gallop

Gish Gallop Trump

“Trump’s incessant barrage of outrageous pronouncements is reminiscent of the Gish Gallop strategy of argumentation: keeping your opponent on their heels and unable to debate effectively by throwing out so many false and misleading statements that it becomes too difficult to address any single one of them or make your own case. It’s a common creationist tactic, and a common tool of hucksters and swindlers everywhere.” [Washington Monthly, November 22, 2015

Three ways to spot a swindle:

Number One:  High pressure sales pitch.  Those who would have you part with the contents of your wallet will tell you that “time is short!” “Act now.” “This is a limited time offer!”  Hogwash. In order for me to pull off a swindle on you it is necessary for you to feel the “urgency” of my pitch.  If I were trying to pitch an investment swindle, I’d tell you that the economy is in terrible shape (it isn’t) and if you don’t act now to protect your retirement fund (which is probably fairly safe where it is) you’ll be in Dire, I say DIRE straits down the line. Notice I didn’t tell you where that line was drawn.

Trump’s pitch, and it’s more Pitch than a stump speech, is that voting for him is necessary to Save The Country; Yes, Save It Immediately – from what?  The leading economic indicators forecast a modest growth rate in the early part of 2016. [MarketWatch]

What part of this chart indicates to any sentient person that there’s a horrible unemployment rate problem in this country?

Unemployment chart trend The President noticed the Gish Gallop from Trump quarters in a recent speech:

“But he largely defended his record and sought to tell voters about the stakes in this November’s election.

Improved economic numbers don’t mean “folks aren’t struggling in some circumstances, and one of the things I’ve emphasized is that there’s some long-term trends in the economy we have to tackle,” Obama said in the PBS town hall. “So we’re going to have to make sure we make some good decisions going forward.”

“The notion that somehow America is in decline is just not borne out by the facts,” Obama said. “But it resonates. It resonate with aggrieved people who are voting in big numbers for Donald Trump.” [NBC]

No, we’re not “in decline,” and NO we don’t need to make America great again, it’s already the strongest nation on this planet.  But that isn’t going to impress the devotees of the Gish Galloping Trump; they are listening for the second element of the perfect swindle pitch.

Number Two: It’s too good to be true.  Again, if I were to launch a swindle in your direction I’d promise outcomes like a 25% increase in your investment, in some ridiculously short amount of time.  And, should you hesitate I’d shower you with misinformation, disinformation, and pure south bound product of a north bound bull, all the time pointing to the Bright Blue Sky (to which MY bank account is headed if I can only get you to play along).

If, IF, you will invest with me all your troubles will be long ago and far away.  I’ll “build a wall,” I’ll “get a better deal,” I’ll “get you a better job,” I’ll “fight the Chinese currency manipulators,” I’ll “turn the water on.”…..

This will work, if you don’t do two things: Check my facts, and do some Critical Thinking.  If I can get you to avoid these two activities, then I can effectively initiate the third element of a good swindle pitch.

Number Three: Downplay the risks.  Galloping right along… Here’s Mr. Trump with a classic example: “We have been too afraid to protect and advance American interests and to challenge China to live up to its obligations. We need smart negotiators who will serve the interests of American workers – not Wall Street insiders that want to move U.S. manufacturing and investment offshore.”

Unfortunately, for those who know how to use the Google, downplaying the risk of getting into a trade kerfuffle with the Chinese is a matter of taking on the wrong target for the wrong reasons.  

The Chinese “currency manipulation” charge is a set piece of conservative attacks on our trade policy.  First, let’s agree that setting nominal interest rates is something that central banks DO.  The U.S. Federal Reserve sets its sites on the federal funds rate; the European Central Bank focuses on the marginal lending facility, and the Chinese central bank fixed the yuan-US dollar rate along with a “basket” of other currencies. [Wall St Journal]  Message to Mr. Trump: “Currency devaluation of revaluation is a common exercise of sovereign monetary policy.”

With this understood we can get down into the weeds, and again look closely at what the Wall Street Journal had to say about focusing on the “currency manipulating:”

“Movements in the nominal yuan exchange rate have almost no long-term impact on global flows of exports and imports or on broader considerations such as average wages. The exchange rate that matters for trade flows is the real exchange rate, i.e., the nominal exchange rate adjusted for local-currency prices in both countries.

The real exchange rate, in turn, reflects the deep forces of comparative advantage such as technology and endowments of labor and capital. These forces drive trade regardless of monetary policy.”

[…] Today more companies operate in global supply networks—in which trade and investment link different stages of production across different countries. Because these networked companies incur both revenues and costs in many currencies, their trade competitiveness tends to vary little with the movement of any one currency.” [emphasis added]

Thus, NO, Mr. Trump, waving the “Currency Manipulation” banner like some kind of red flag obscuring the more complex nature of international trade forces and trends, doesn’t come anywhere near explaining the issues involved in international trade and the related currency valuations thereof.  What Mr. Trump is saying is a rather vapid “I’ll get a better deal.” Without, obviously, introducing any of the real factors associated with international trade policy.  However, in Trump’s campaign, waving this banner is just one more piece of the continuing Gish Gallop.

Before the third element of the perfect swindle pitch is successful, it’s time to remind ourselves of H.L. Mencken’s famous line:”

“There is always an easy solution to every problem – neat, plausible, and wrong.”

It isn’t like the Trump Gish Gallop hasn’t been spotted already – Blue Virginia caught it back in March 2016, the Democratic Underground wrote of it in January 2016 – proposing to call it the “Trump Trot,” and the media was warned, as noted previously, by the Washington Monthly in November 2015.

Gish Gallop 2

Those still confused by the combination of Gish Gallop and Word Salad emanating from the Trump Campaign may note with some trepidation that Mr. Trump can lie faster than the fact-checkers can keep up.  Prevaricate he will, as he pours forth his high pressure sales pitch, promising that which is too good to be true, and downplaying the risks of his preposterous proposals.

1 Comment

Filed under Economy, Nevada politics, Obama, Politics

Do We Have To Make Racists Comfortable?

No sooner did an African American take the oath of office as the President of the United States than racists (and those who tolerate them) began slathering on the euphemisms and buzz words for making opposition to him credible.  Remember the e-mails that made the rounds? The ones with “bones in noses” and “watermelons on the White House lawn?” And the response, “We were only joking.”

Obama racist cartoon

Those who found this cartoon amusing are racists. Purely and simply racist. Those who took these people seriously are enablers .. consider CNN’s “debate” about whether this obnoxious drivel was “Racist or Satirical.”  There’s no debate here. The cartoon is clearly, obviously, evidently racism.  How do we know this? A black man as a “savage.” A black man as a “witch doctor.”   Enough people were indignant about this offensive cartoon that its advocates slunk off to find more fodder for their e-mail lists.

However, the obvious racists are relatively easy to deal with – and even easier to shun.  Those “dens of lone wolves,” the Internet’s dark corners of hate and intolerance can be monitored, the “patriots” can be watched, and the hate-mongers prosecuted.  It’s the enablers of institutionalized and personal racism who seem more problematic.  Perhaps we’ll be able to move forward if we shatter some persistent myths.

The Myth of Two Sides

In the current cable news template, there must be “two sides” to an issue.  Let’s revert to the day someone at CNN decided to produce a segment on that 2009 cartoon.  Yes, they decided, the cartoon was, indeed, racist, but why was the question posed at all?  Well, gee, it could, it might, it may look in some circles, … like racism, but it could also be political criticism… Really?  No, to anyone with any sensitivity, or an IQ above cauliflower, it was racism.   Moving along the continuum from “we’re just joking” we get to “can’t you take a joke?”  Other presidents have had horrible cartoons drawn and published about them, why are we so sensitive about a black president?   For the near-veggies who might read this: It’s because he is a black man, and black men have been vilified for centuries in this part of the world for being “savage,” and “wild,” and “emotional,” and “lustful,” and … we could keep going here, but that would only serve to raise blood pressure.  So, let’s get to the point: Racist and ethnic jokes aren’t funny. Except to racists.  But, but, but… African Americans (and blondes and Poles) do it? That still doesn’t make it right.  The ‘everybody does it’ response is usually the province of immature adolescents trying to explain their misbehavior to the parents.  We should be a bit more mature.

The Myth of the Mirrors

Another myth which should hit the skids is the banal “speaking out about racism is divisive.”   Well, obviously, yes.  As well it should be. Who wants to be lumped into the same category with racists?

Remember the Twitter Fit from the Right when the President commented on the murder of Trayvon Martin?   The  Right echoed George Zimmerman’s whining about the President “rushing to judgment,” and said the President’s comment “pitted American against American.” [Hill]  It’s “race-baiting” to talk about race?

“…the allegation is that simply talking about race in America makes you a racist. It is, as Boehlert called it, “a very odd brand of projection” that’s “very weird and complicated,” but that’s where the roles of endless repetition and cognitive closure come in. They naturalize and normalize what would otherwise clearly be both arbitrary and bizarre.” [Salon]

If we boiled the “endless repetition and cognitive closure” down to its essentials what comes out is – If you talk about racial issues in ways that make racists uncomfortable, i.e. it makes people confront their own racism, it must be ‘race-baiting.’   When this message moves inextricably closer to its inevitable extension we can no longer speak of a whole host of topics which cause conservatives to squirm.

We can’t have a national discussion about institutional racism in employment, housing, or health care outcomes because … we’d be “divisive.”

We can’t have a national discussion about voting rights and the African American community, and other communities of color, because … we’d be ‘divisive.’

We can’t have a national civil debate about the social costs of mass incarceration of African Americans and other people of color, because … we’d be ‘divisive.’

And, Heaven Help Us, we can’t have a discussion about policing in America because … we’d be ‘divisive.” Worse still, we’d be “race-baiting,” as asserted by the Louisville, Kentucky Fraternal Order of Police.  [Full letter here]

The Myth of A Non-Partisan World

I think I’m going to gag at the very next assertion that what we need in this country is “healing,” and “bipartisanship.”  There never was, and never will be, a harmonic idyllic session of any democratically elected ruling body gracefully gliding over issues and points of disagreement with elegance and aplomb.  And yet, this is the standard by which some of the Chattering Classes measure the effectiveness of legislators and legislation. “The bill had bi-partisan support,” as if that automatically made the bill any better law.  Yes, politics is the art of the possible. And, yes, pragmatism usually makes more progress than strident partisanship.  However, there are some points at which we should agree, and one of the prime ones in American life is that racism is wrong.

The racists are aware of this. Why else would they be quick to tell us that they were only joking, or that they are merely being satirical? Why else would they begin obnoxious expressions with “I’m not racist, but…?” Why else would they whine so loudly if it’s suggested their own brand of projection is nothing more than an attempt to ‘normalize’ what is patently arbitrary and downright bizarre?

Sometimes wrong is just wrong.   We can debate the finer points of trade agreements, international arms agreements, educational policy, health care insurance needs, and so many other topics, but this is 2015 and we should no longer have to make racists comfortable and racism tolerable. Nor do we need to tolerate its symbols.

CSA battle flag

The Stars and Bars, isn’t a Redneck Flag —  unless the aforementioned Redneck is a racist. It isn’t a symbol of southern heritage – unless that heritage is hate.

NASCAR, yes NASCAR, got the message back in 2005:

“NASCAR has a policy that prevents use of the Stars and Bars or other controversial subjects on any car, uniform, licensed product or track facility under its control, but that doesn’t stop hard-line rebel fans from displaying it.

“We recognize that the Confederate flag is an important issue for a lot of people and as our fan base grows, we are doing what we can to break down its use and be more in the mainstream,” said Ramsey Poston, NASCAR director of corporate communications.” [LA Times]

Mainstream America doesn’t sport the traitorous Stars and Bars, the battle flag of a revolt, the cornerstone of which was the preservation of the Peculiar Institution, as expressed by the CSA vice-president when speaking about their new CSA constitution:

“Our new Government is founded upon exactly the opposite ideas; its foundations are laid, its cornerstone rests, upon the great truth that the negro is not equal to the white man; that slavery, subordination to the superior race, is his natural and moral condition. [Applause.] This, our new Government, is the first, in the history of the world, based upon this great physical, philosophical, and moral truth.” [Alexander Stephens,  March 21, 1861]

Lee surrenders Is there any good reason why we have to tolerate the display of a flag which was truly and historically divisive – physically, philosophically, and morally divisive?  It did divide us – dividing us between those who thought chattel slavery and all its horrible implications was a physical, philosophical, and moral good, from those who believed chattel slavery was a cancer in the body politic and a moral catastrophe.  It took four bloody years, but the Good Guys won.  Someone made a picture of it.

So, if reading this post made you “uncomfortable” I’m not the least bit sorry.  I think there’s a better use for my capacity for sympathy and sorrow – for the victims of that heinous act of domestic terrorism by a horrid racist in South Carolina.

Comments Off on Do We Have To Make Racists Comfortable?

Filed under conservatism, Hate Crimes, Human Rights, media, Obama, Politics, racism

VOTE! Here’s why…

ballot box Here are 50 reasons to vote: Washington Monthly.

Here are more: “Obama outperforms Reagan on jobs, growth, and investing” [Forbes]

Vote, like your right to vote depends on it. Because it does.

Comments Off on VOTE! Here’s why…

Filed under Obama, Politics


ArchimedesSome members of the chatterati may have taken Archimedes a bit too literally: “Give me a place to stand and with a lever I will move the whole world.”  Often too much emphasis is placed on the fulcrum and not quite enough on the part about the ancient mathematician needing a place to stand.  The word of the week sounds like “leverage” in Washington, D.C. Who has it? Who doesn’t? And, so what? The So What part isn’t all that interesting.

Although the pundit class is thoroughly fascinated at the moment with how much leverage the President and the Republicans may each possess after the self inflicted Fiscal Cliff fiasco, most of their comments can be categorized as post game “analysis” of the variety which is more commonly associated with post game “analysis” of a sporting event.  It’s never quite enough to declare one team or another victorious based on the scoreboard numbers — “we” have to “know” why one team won and the other lost.  In reality, we really don’t.

So, in the parlance of political reporters emulating the post game questions of their sports writer colleagues — can the President win the next game? A game of Debt Ceiling already scheduled by the Republicans and given official status by the post game analysts.

It depends on where you stand.

There are two major elements of the federal debt that deserve serious scrutiny.  First, during the Bush Administration’s policy of credit card conservatism we racked up two wars (off the budget and supported by supplemental appropriations), a major addition to the Medicare program (Medicare Part D, also unpaid for) and one major Recession.  All were guaranteed to increase the national debt.  The first two increased spending and the latter cut into the tax base.

Secondly, we do need to reduce the national debt, but how we do it is important.  This is one of those occasions which calls for a scalpel, not a meat axe.

It is also important to stand on firm ground.

A few facts are in order.  The first part of standing on terra firma before attempting to leverage anything is to dismiss some media mythology about trends in the national budget deficits.  The following chart should provide an illustration of the inaccuracy of the Now That A Democrat Is In The White House The Deficit Is Out Of Control Myth:

Bush Obama Deficit trends

The chart illustrates what happens when two wars, one major Medicare addition, and a nasty Recession contribute to national spending. It also shows the effect of Obama Administration policies mentioned earlier, a point at which we should note that the Bush Administration toted up about $5.1 trillion in expenses, while as of last June the Obama Administration’s policies resulted in about $983 billion in spending.

Bush Obama Spending ComparisonIn short, if we are really serious about deficit reduction then we need to eschew the policies that got us into this mess in the first instance, i.e. unnecessary tax cuts, and two very expensive wars.

OK, so if we don’t get involved in more military operations, we resist the myth that tax cuts somehow cause economic growth (which they never have), and we regulate our financial markets more effectively in order to mitigate the excessive enthusiasm of traders who created the last great mess, then where do we cut?

It’s time for another reality check.

Here’s where the money goes:

Budget Categories

Since Social Security is a self-funding program, which as President Reagan famously cautioned in 1984 doesn’t add to the federal deficit (video), we can take that 20% out of the equation right now.  Anyone who is truly serious about the single issue of Social Security solvency should be clamoring to increase the cap on earnings liable to the payroll tax, currently set at a measly $110,000. We also need to remove the mandatory spending from the discussion because what we cut will have to be from discretionary spending.

The FY 2013 budget calls for spending $666.2 billion by the Department of Defense.  Another $80.6 billion is allocated to the Department of Health and Human Services (Medicare, Medicaid), and the Department of Education (Pell Grants, Title I, student loan guarantees, etc.) is scheduled to spend or entail $67.7 billion while the 4th largest chunk of the budget goes to the Veterans Administration which has $60.4 billion in scheduled spending.

In short, we’ve budgeted for $1,510 billion in discretionary spending in FY 2013.  The Department of Defense is on track to receive 44.12% of ALL the discretionary spending in the national budget.   Yet calls to cut military spending brings on the wailing of voices, the gnashing of teeth, and the rending of garments about “making us less safe” in an uncertain world.  In spite of all the wailing, gnashing, and rending — that one single department consumes 44.12% of the entire pot of discretionary spending is something we ought to be discussing.

Medicare is another matter.  IF we are truly serious about deficit reduction then we need to have more than the simplistic discourse already in evidence.  There is a false choice being presented, as though the only options are to privatize the Medicare program (give Granny a coupon and let her go out and find her own insurance) or to create a Single Payer national health care system.  While I wouldn’t be sorry to see a Single Payer system, this is an argument for another day.  The point is that there are options between these two proposals.

The central focus point should be that nothing which doesn’t have a bearing on health care cost containment is going to make much difference in the spending levels.   Privatization doesn’t address the cost containment issue, and a single payer system without cost containment elements is merely a recipe for increased expenses.

Now that the campaign season is over we can dismiss the Republican rhetoric about “Obama cut $716 out of Medicare,” and consign to the dust bin the notion that the Affordable Care Act somehow impinges on Medicare benefitsBusiness Week explains:

From 2010 to 2019, Obamacare trims payments to providers by $196 billion. They agreed to take a cut because they will get so many new patients, thanks to the individual mandate. Another $210 billion will be generated by raising Medicare taxes on the wealthy (that’s households earning more than $250,000). Another $145 billion comes from phasing out overpayments to Medicare Advantage. About 25 percent of seniors use the program—in which private plans compete for Medicare dollars—instead of traditional fee-for-service Medicare. Under Obamacare, the government has to keep Medicare Advantage costs in line with those of traditional Medicare. More savings come from streamlining administrative costs.

Thus, if we trim payments to providers, phase out over-payments for profitable private health care policies, and put some reins on administrative costs we’ll find about $716 billion in savings for the Medicare program.  Other cost savings may also be the result of more efficient record keeping, especially in the pharmaceutical segment.  Anyone who’s dealt with the medical issues of an elderly parent knows of multiple prescriptions written from several physicians who may or may not consult with one another.  The result can be as minimal as two (or three) prescriptions for the same medication at different dosages; or, as detrimental as two prescription medications which should not be taken together.

However, the bottom line is still the bottom line — unless and until we are ready to discuss health care cost containment we’ll be immersed in the rhetoric of low bludgeon and high dudgeon without much result.

When we discuss funding for the Department of Education it’s important to note that the FY 2013 discretionary requests yield an official number, $69.8 billion — if we include Pell Grants.  Pell Grants constitute about $22.8 billion of the total, a decrease from $23.8 billion in the FY 2011 budget.  Without the Pell Grants the total discretionary spending in the FY 2013 budget is $47 billion.   There are two constituencies with major stakes in arguing about these funds.

Parents.  Unless one is amenable to the elitist argument that kids should have access to only the level of education their parents can afford (which makes social mobility a moot point) parents are going to need assistance paying for their children’s education.  Whether we like it or no, education is a labor intensive business.  We can trim educational spending by continuing what the Obama Administration has started — saving approximately $61 billion by cutting the banks out of their role as middlemen in the student loan program [NYT]– but it really doesn’t do to cut efforts to educate our young people.  It also doesn’t make economic sense since a college degree is worth money in the marketplace.

Educations Pays Local school districts.  Cash strapped and semi-starved local school districts rely on funds for Special Education programs, Title I services, School Lunch programs, to make up budget shortfalls.  While the level of federal involvement at the local level isn’t all that much it does cover expenses local districts would be hard pressed to meet were the monies cut.

Hostage Taking

How we fund, or de-fund, these major activities depends on who is being held hostage and by whom.   Did the President allow the Republicans to gain “leverage” by taking the tax rates off the table in the next Congressionally manufactured debt ceiling debacle. Or, are we going to change hostages?

Will the Republican stance be that all other programs must be cut in order to spare the 44.12% consumed by the Department of Defense?

Will the GOP position be that Medicare must be privatized in order to practice “sound fiscal responsibility?”

Will the GOP position be that Social Security must be “reformed” (read cut) in the interest of “fiscal accountability and deficit reduction” even though it adds not a nickel to the federal debt?

Will the Administration simply say — You manufactured this debt ceiling “crisis” live with it?  Remembering that if the national credit rating is downgraded this will likely mean that the cost of borrowing (yields paid to those who invest in Treasuries) will go up, exacerbating the problem rather than addressing it.

Will the point be made to the American people that while the credit card analogy is handy, the United States of America doesn’t have creditors it has investors.  Our federal government accesses funds by issuing bonds.   And WE own most of those bonds.

Here’s the little chart again:

Who owns US debt

42.2% of the money “borrowed” by the U.S. government is an asset for U.S. individuals and financial institutions.   Today’s yield curve doesn’t indicate a government which is having to pay all that much to get people and institutions to invest in it:

Daily Yield CurveEven 30 year bonds are paying only 3.0% interest.

The amount of leverage always depends on where one stands and places the fulcrum.

Comments Off on Leverage?

Filed under Congress, Economy, education, Federal budget, Health Care, Medicaid, Medicare, national debt, Obama, privatization, recession

Fiscal Cliff or Stairway to Heaven?

As the Nevada Progressive points out, the looming “fiscal cliff” is a meaningful moment for the Republicans in the U.S. Congress.   The somewhat sordid history of this “cliff” which in actuality could be more like a slight slope is summarized as:

“The United States fiscal cliff refers to the effect of a series of recent laws which, if unchanged, will result in tax increases, spending cuts, and a corresponding reduction in the budget deficit beginning in 2013.  These laws include tax increases due to the expiration of the so-called Bush tax cuts and across-the-board spending cuts under the Budget Control Act of 2011.” [link]

At this point, even the well informed may need a reminder that the term ‘fiscal cliff’ was coined by Federal Reserve Chairman Ben Bernanke, who was concerned that the impact of the failure of the Super Committee to reach an agreement would depress the economy:

“For the record, although the explanation wasn’t reported or repeated as much as the catchphrase itself, Bernanke actually said the fiscal cliff was about the large spending cuts and tax increases already scheduled to occur being far too big for the current U.S. economy to handle at one time. “I hope that Congress will look at [the spending cuts and revenue increases] and figure out ways to achieve the same long-run fiscal improvement without having it all happen at one date,” he told the committee.

In other words, “fiscal cliff” means the big deficit reductions that have been both inadvertently and intentionally scheduled to go into effect at the turn of the year are the absolutely wrong fiscal policy at that time and that the economy will be damaged if they are not changed.” []  (emphasis added)

For those likely to hit the panic button — some programs are exempted from the budget cuts: Social Security, federal pensions, and veteran’s benefits.  Social Security is properly called an entitlement program, because the beneficiaries have paid into it, and it is supported by payroll taxes and its own trust funds.  No one, repeat NO ONE, has “spent” money earmarked for the Social Security Trust Funds.  [SSA]

For those likely to run screaming into the sage brush about THE DEFICIT, we should note that reductions in military operations in Afghanistan will reduce that beast, and we should remember that the Affordable Care Act also has some deficit reduction benefits.  Cherry-picking selective think tank and editorial board musings notwithstanding, the  “CBO and JCT estimate that enacting both pieces of legislation—H.R. 3590 and the reconciliation proposal—would produce a net reduction in federal deficits of $143 billion over the 2010–2019 period as result of changes in direct spending and revenues.” []

The central question about the ‘fiscal cliff’ is whether or not  it becomes a stairway to heaven for the American middle class.  It’s a cliff if the Republican controlled Congress obstructs the negotiation process such that ALL tax breaks enacted during the Bush Administration expire — including those for those earning less than $250,000 annually.  It’s a stairway to heaven, if the Congress can agree to allow the tax breaks for millionaires and billionaires to expire, and retain the tax breaks for middle class families.

It’s a cliff if the Congress demands that automatic economic stabilizers like unemployment insurance support, nutrition programs, and other means by which we prevent highly volatile economic swings are cut in order to prevent the upper 1% of American income earners from having to pay any increased taxation.  It’s a stairway if the economic stabilizers can be themselves stabilized, perhaps even if in slightly reduced forms.

It’s a cliff if the tax breaks for 97% of American small businesses are lost in the interest of sparing the top 0.01% of American income earners any tax increases.  It’s a stairway if tax breaks for 97% of American small business owners are maintained, and the deficit is reduced by encouraging economic growth, and by taxing the top 1% more fairly.

The newly re-elected President had some words about this choice:

“President Obama said he refuses to accept any approach that isn’t balanced. “I’m not going to ask students and seniors and the middle class to pay down the entire deficit,” while higher earners get tax cuts, he said.

The President said he will ask Congress to pass a bill that will continue the tax cuts for the middle class, which he says will eliminate much of the uncertainty in the nation. After that point, he said, he and Congressional leaders can work on a compromise for the remaining tax cuts.” [CSPAN]

The President’s own words, on video (not yet embeddable) from CSPAN.



Filed under Bush Administration, Congress, Economy, Federal budget, House of Representatives, national debt, Obama, Politics

Simple Economics Made Complex: Capitalism vs. Financialism

The 2012 election at almost every level will be determined by turn out, and predicated on economics — micro and macro.  The problem for most voters is that we’re talking about two economies.  The economy of the financialists and the economy of the capitalists.  So far, the capitalists are winning.  Barely.

A capitalist believes that our economy works best when consumers have a choice of products from a variety of manufacturers or providers.  The economy expands as the demand for goods and services increases and providers seek to accommodate consumer needs.  A capitalist believes that capital should move from areas of surplus to areas of shortage, for small business lines of credit, for home loans, for student loans, for consumer credit, for business expansion, for commerce and marketing needs.

A financialist believes that the economy serves to accumulate wealth such that we create financial products and services which can be securitized and manipulated to create more wealth.   The financialists have been doing very well, thank you very much.  Not sure, then consider this chart:

That’s right, 93% of the increases in American income (wealth) in 2010 went to the top 1% of income owners in the U.S.  And the stock market has been doing quite well since 2009:

Of course, it’s not just stocks in which we find increased trading.  Other financial products, derivatives included, have been doing a thriving trade.

The traffic in derivatives hasn’t slowed much either.

So, while those whose income comes from the financial sector have been doing quite well, those in the “real” economy — the capitalist economy have been in something of a bind.

Note, Governor Romney’s complaint that the current economy means “stagnating” wages for middle class Americans he’s omitting a crucial bit of information:  When economic policies favor the accumulation of wealth in the coffers of the o.01%, it shouldn’t be the least bit surprising that middle class Americans aren’t seeing the increases in their bank accounts.

In short, the Financialists (and their presidential candidate Governor Mitt Romney) having secured a deregulated financial sector which rewards them disproportionately, are loathe to adopt any policy which might require them to pay more in taxes or to comply with any regulations on the financial product manipulation which constitutes their wealth accumulation strategy.

It’s up to the Capitalists in the 2012 election to secure a level playing field, or at least a more level field, one in which INVESTMENT is rewarded before SPECULATION.   One in which the economic reality of supply and demand means the supply and demand in REAL markets — not in esoteric “markets” for artificially concocted risk management products.

Let’s hope the Capitalists win.

Comments Off on Simple Economics Made Complex: Capitalism vs. Financialism

Filed under 2012 election, banking, Economy, Obama, privatization, Republicans, Romney