November 2012 Archives

Dear America,

President Obama apparently felt obliged to meet with representatives of small business a few days ago.  Leaders of that "community" were invited to the White House, and when they emerged from their meeting, their answer to the question, what did you tell The President, was the same as it always is with these guys: we need more certainty before we can invest in our businesses.  The problem with that answer is...well, there are two problems.  The first is that it is the self-serving excuse that business uses for everything--not liking Obamacare, sitting on their hoard of a few trillion dollars for a couple of years now, sending jobs and physical plant abroad, etc.  The second is, what the hell does that mean?  What is it that they're not certain about?  And worst of all, no one ever asks them.  Well, I have some suggestions about how to respond to anything they might answer to that question.

Let's say they answer, taxes.  My response would be to tell them they can be certain that taxes on the top marginal rate payers will go up within two years to the levels that prevailed during the Clinton administration.  The virtue of that answer is that such is probably the case, but if it doesn't happen, small business will get a windfall if they expand to levels they can afford on that assumption but taxes on them do not increase.  In fact, my guess is that they are already assuming that, so claiming uncertainty about taxes is nothing but a scam.  But let's say they answer that they don't know what Obamacare will cost them.  My answer is, read the law, because it is what it's going to be.  And how do I know that?  Because Chief Justice of the Supreme Court John Roberts told me so.  He told us all so.  Thus, we know that it isn't going to cost the $3 trillion these guys have in the bank, so they should invest some of it in their businesses.  But let's say they answer honestly and say that they don't know whether there will be demand for goods created through increased investment and production.  Well, the answer then is, there never is certainty as to whether the consuming public will buy what you want to sell, so you're no worse off in that respect than you've ever been.  But if what you are really saying is that you don't know if consumer demand in general will increase and thus stimulate the economy, the answer is, stop thwarting efforts to create jobs, stop sending them to China, and stop milking your current employees for more production without increasing their wages.  Stop prophesying slow demand, planning on it, and thus making it happen.  This must be the first period in the history of business in which it has been acceptable to say that you aren't going to try to make more money now because it is not certain that you will be able to make it next year.

But the reason they get away with this casuistry is that politicians like President Obama humor them and have special meetings with them to give them legitimacy when they don't deserve it.  The remnants of the great recession that we are still dealing with are the gift of the Republican conservative complex (Rcc), including the Republican Party, reactionary Tea Partiers, Blue Dog Democrats, financiers and businessmen who now want people to go to college to pay for their own training when business used to train its own workers.  They now want us to provide for our own retirements, but they want to cut Social Security and Medicare benefits and eligibility as opposed to inducing employee loyalty to an employee-loyal company that lasts for a lifetime, and through which the preponderance of pension funding for old age used to come to us.  And all the while, those at the top continue to enrich themselves by using the infrastructure we all pay for...the schools, the first responders of all kinds, the public utilities, the roads, the municipal services and the like.  They insist that they built their businesses all by themselves and give no recognition, much less compensation, to either their workers or the public who provide the labor and infrastructure on which private fortunes are built. But this uncertainty nonsense doesn't come just from business.

On Wednesday, Senator Bob Corker of Tennessee unveiled his plan for "avoiding the fiscal cliff" with a caveat about uncertainty being the cause of our economic troubles.  On the issue of taxes, he wants to produce revenue by "raising taxes" in accord with the Republican Party's preferences: allow only $50,000 worth of deductions and eliminate tax loopholes, which he says would comprise $1.3 trillion...not nearly enough to eliminate the deficits anticipated over the next ten years.  But--and this is the tip off that it is all code for more of the same thing they have been saying all along--he doesn't want to pass extension of the Bush tax cuts for the middle class without passing them for the rich as well because, he says, the public wants them (congress) to handle the problem as a whole, that despite polls that show that 60% of the American public wants the rich to pay more in taxes while the rest of us stay as we are.  And Corker says that he floated his plan, which includes increases in the age of eligibility for both Social Security (which has no relationship to the debt or the deficit) and Medicare, because he wants to be the voice of compromise and reason.  Where is the compromise?  Where's the reason?  This is all what the Republicans have wanted all along: to start down the path toward diminishing the effectiveness of Social Security and Medicare if not eliminating them altogether and giving the wealthy even more wealth.

The bottom line is that all these fulminations from Republicans about compromise and a new found willingness to do so is nothing but a rephrasing of their previous positions.  It is ear candy.  I don't want candy in my ears.  In fact, I don't want compromise.  I continue to believe that there are only two options for the Democratic Party and the people of the United States.  One is to temporarily extend the Bush tax cuts to 98% of us now and worry about the rich later.  They can take care of themselves anyway.  The other is to just let all the consequences of failure to compromise happen.  The Republicans designed them thinking that the Democrats would blink first...again.  But let's fool them this time.  There's an old expression that applies in situations like this in which people equivocate about what they intend to do, in this case, compromise.  The Democrats should tell the Republicans what the American electorate told them a few weeks ago.  Fish or cut bait, Republicans.  Make a real compromise proposal or it will be made for you.

Your friend,

Mike

Dear America,

I continue to believe that the best thing that could happen relative to the governmental crisis impending with regard to laws that are both expiring in their effects and just beginning to have long term effects would be to let it all happen and start from scratch.  But with each side trying to vilify the other subtly...and sometimes not so subtly...that seems unlikely.  The real question is, what has changed since the lame duck session of 2010.  The Republicans claim to have softened their position from intransigence on the subject of tax cuts for the rich to flexibility on that point.  But if you listen to their specific descriptions of that flexibility, it becomes apparent that it is a chimerical mirage that they are trying to sell as substance.  All of them from McBoehnell (John Boehner and Mitch McConnell) to the party soldiers like Jeb Hensarling are talking about "raising revenue" but the question that remains after each of them speaks is, how can they call it revenue raising when they won't consider raising marginal tax rates and they will accede to reducing "loop holes" only if marginal tax rates are reduced.  What that means in simple language is, not only have they not become more flexible, they are even more intransigent in their demands about lowering tax rates...and by the way, that means the tax rates of the rich too.  And if they get their way, the hole dug by the Bush tax cuts in the first place...the very thing that got us into this fiscal condition...will just get deeper unless they get the spending cuts they demand, which would devastate the people in our country who are most vulnerable economically.

Listen carefully the next time you hear one of them addressing us through C-span or on the news and you will see what I mean.  The Republican mantra continues to be that no compromise is possible without the leadership of President Obama.  But the only direction in which the Republicans are willing to be led is the direction in which they want to go.  That's no compromise that they're selling.  It is the same demand for the kind of capitulation that they succeeded in wringing out of the Democratic majority and foisting on the American people in the lame duck session of 2010: Obama bad, us good, so give us what we want or we'll take it.  That's why I believe that the best way for the Democrats to proceed is to let it all happen and start from scratch when the next congress begins.  All bills on the floor of congress expire with the session, and if the first thing the Democrats do is change the filibuster rules in The Senate, and the second is to pass a tax cut for those earning under, say, $200,000, the Republicans will have no choice but to vote for it or to explain themselves, and that would be a good thing for posterity.  When they begin spouting that sophistry about the rich creating the jobs that sustain us all, the debate can be directed at the statistical and empirical evidence that such is not the case.  That debate has never been had in isolation...in a fashion that exposes the real essence of their argument without the distraction of other issues like debt ceilings and entitlements.  (By the way, if anyone tries to inject Social Security into the debate about how to pay down the national debt, refer them to the first section of title two of the 1939 amendments to the Social Security Act in which the trust fund for Social Security was established and the funds in it were sequestered from the rest of the general fund.  It is plainly stated that the only funds in the trust fund are those already extant as of that date and the payroll taxes that are to be received thereafter, and that those funds are for the purpose of paying benefits only and thus, there is no relationship between Social Security and the national debt.)

The pressures of time will require that, only after resolution of the middle class tax cut has been voted on can the issue of budget cuts be debated and their will be no distractions on that issue either. The real nature of the Republican motive will become clear.  Between the passage of the sequestration bill last year at the time of the last fiscal cliff and the success of the nearly sixty year effort to repeal the Glass-Steagall Act when Bill Clinton signed it, the Republican conservative complex (Rcc) has been after the New Deal, banking constraints and Social Security with a vengeance.  Thus, when discussion of repeal of things like "Obamacare" arises, the Democrats will have a misdirection of their own to throw out: repeal of Dodd-Frank Act and replacement of The Act with the repealed a reprised Glass-Steagall Act just as it was written in the first place.  We went about fifty years under Glass-Steagall without a depression, and within twenty years of its repeal we had a financial industry so rampant and out of control that we had another one.  It is time to point out the philosophical nexus between the Rcc's blind fealty to the financial industry and the rich at the expense of the rest of us.  Supply-side economics must die...and now's the time to do it.

Your friend,

Mike

Dear America,

We can all breathe a sigh of relief now that the 2012 election is over.  Mitt Romney has demonstrated his real mettle with his most recent gaff about "gifts" that Barrack Obama has "given" to his constituents, like Pell Grants and student loan interest abatements for example, and by doing so has shown all of us what a close call we just had.  He would have been the apotheosis of the Republican conservative tide that has been lapping at our shores for seventy five years...since the New Deal.  Romney is genuinely conservative despite the reservations that the Republican conservative complex (Rcc) loudly disparaged him with during the campaign.  He is a social and economic Darwinist, and he is unapologetic about it, failing to see the disparity between his ardent Calvinism and the faith, hope and charity that he reputedly practices.  He is the anti-FDR, and in that he rose to the station of standard bearer for his party and then lost the election, he represents the end of a cyclical swing toward his creed...and make no mistake about it, it is a creed.  Just listen to the way that the Rcc pules about Social Security, claiming that the trust fund from which it is paid is a myth in order to justify seizing the contents of the trust for the purpose of erasing about one eighth of the national debt with a stroke of the pen...and all this in spite of statutes that as plain as day make the fund a reality, and do so for the specific purpose of denying the Rcc what it has sought to accomplish ever since Social Security came to be.  Mitt Romney was the fully evolved representative of the movement to repeal the New Deal and Social Security lock, stock and barrel, and thus we have taken the Rcc's best shot.  While Ronald Reagan is the patron saint of the conservative movement, even he believed in the sanctity of Social Security overall.  So Romney and his reactionary column are the real and pure soldiers for the conservative clause, and they have now had their best hope in three quarters of a century dashed.  But that is just the beginning of the ebb of the Rcc as the emerging power in our politics.

The liberal establishment has sat by much of the time during the nascence and evolution of the threat of this American reign of terror...claiming the higher moral ground and being walked on for fear of being seen as no better than its adversary.  But the recent overt Republican strategy and the tactics used to pursue it should have made a difference.  It is no longer appropriate to bend over backwards to be fair to the other side.  Given the lapse by the Republicans into imprecation from mere disdain and sabotage from mere opposition, the Democrats must recognize that their political opposite numbers are not just a threat, they are a danger to the party and to those whom it represents.  The luxury of fair play is a thing of the past, but how should the recognition of that new reality be manifested.  My answer to that question has to do with the mantra of the Republicans still, even after losing an election that was probably the most fecund opportunity for their final victory they have ever seen: time to eat the rich, and the "fiscal cliff" created under pressure from their camp is the perfect appetizer.

Because of the stubborn adherence to the notion that wealth in the few is good for us all, and that lower taxes are the key to wealth in the few, there is now talk of how to get revenue from the rich for the federal fisc without raising the marginal tax rate they pay.  Mind you, that rate is only a little more than a third of what it was at its peak, but modern conservatives think that is still too much because anything that redistributes the wealth created by us all away from the concentration of it in the rich that prevails today is anathema to them.  Thus, this privileged taxation for the privileged few is the holy grail of the Rcc, and this is the time to give them what they want while taking from them what they actually have.  The talk is of reducing "loopholes" in the tax code to achieve the enhanced revenue that the federal government desperately needs these days, and I think we should use that technique to meet the goals that are imperatives right now.  It is a kind of euphemism for increased taxes on the rich, and over the next two years, we should change the tax code by limiting the total amount of deductions that the rich can take in a way that won't diminish their will to do the good things the do--like contributing to charity--while they are willing to indulge in the self-deceit that in this fashion, they can be true to the cause of protecting the wealthy from the predation of all those who have smaller boats than they do.  But then, in two years, we should renew the effort to increase the marginal rate at the top of the income tax scale--and for that matter all the tax rates, even for the middle class rates that prevailed during the Clinton administration--so as to bring the budget into balance once again and even perhaps create budget surpluses so as to reduce the national debt over time.  That's what the Republicans have been doing over the past four years.  They give up what only what they couldn't keep anyway, and then they take even that back when the opportunity arises.  People forget that the only way that the Bush tax cuts could be passed in the first place was to limit their duration to ten years...that's what the Republicans gave up to get the tax cuts...a one decade duration.  But then, they took that back by refusing to increase the nation's debt ceiling or to repeal don't ask, don't tell, or by threatening to allow the Social Security tax abatement, which started the national economic tax recovery, to lapse.  They did all that in the 2010 lame duck session, and that is what the Democratic Party should do now, and two years from now.

The Democrats prevailed in this election, and in some ways it was more of a thumping than the Republicans inflicted two years ago.  So it should be used as such, and it will thus be the opening salvo in the battle to drive conservatism back to where it came from seventy five years ago.  So, give them what they want this time and get the money from the other pocket of the rich.  But two years from now, restore the prosperity of the Clinton administration by restoring the tax rates that prevailed at that time.  Talk about our children's future, going back to balanced budgets and reducing the national debt with any budget surplus is the way to go.  It was George W. Bush who mortgaged their future, not Barrack Obama.

Your friend,

Mike

Dear America,

In last Friday's New York Times, both David Brooks and Paul Krugman wrote about the transmogrification of our society, each in his own way.  Brooks complains about the atrophy of family as a motive in our modern culture, which he attributes to the contemporary emphasis on career as the raison d'être for everything we do.  In short, Brooks thinks that we subscribe the notion that work is an end unto itself and that it is the primary source of personal value in the world today.  I agree.  Krugman talks about the role of government programs, Social Security and Medicare in particular, in the determination of the quality of life lived by those on the bottom half, and more specifically the lowest rungs, of the economic ladder.   He notes that those are the people to whom raising the age of eligibility for programs like Medicare and Social Security makes the biggest difference, and thus contemplating such changes in the programs in lieu of raising taxes on the rich is inherently unfair, and by implication, immoral.  I agree with him too.  But there is an overarching principle that covers both men's ideas, and it has been foisted upon us by those who profit most from it.  That principle is the "work ethic," or what passes for it today.  When Brooks complains about it having supplanted family as a human goal, he misses the point, and Krugman's condemnation of the fealty of some to the rich rather than the poor does too.

I remember having a conversation with my father one time when I was about fifteen.  I don't remember what we were discussing, but my father posited the notion that courage is a virtue, at which point I asked him why.  He didn't have an answer.  I won't bore you with the arguments I made about blind acceptance of definitions of virtue versus defining virtue in situational terms, but there you have that umbrella issue I was just talking about.  Why is working virtuous?

There are reasons, but in my opinion today as back when I was an adolescent, they are situational...not absolute at all.  On one end of the spectrum, I had chores as a child, and my younger siblings did not as they were considerably younger than I was.  But it was not unreasonable for me to have to work in the house considering that I ate and was sheltered there...and I learned a lesson about making a contribution from that experience...a lesson I have tried to pass on to my children.  On the other end, there is the sign that was emblazoned over the gates of some of the Nazi concentration camps during World War II: "Arbeit Macht Frei"  or work makes one free.  As it turned out, however, that work...the work done in the concentration camps building German infrastructure and disposing of the waste created by mass extermination of human beings...made no one free.  Somewhere in between those two extremes of the work ethic lies the current mantra of American capitalism: work hard and you can succeed.  But there are many a man and woman who have broken their backs working in construction or factories for their entire lives and never prospered.  And at the same time, there is many a person whose father or mother had wealth and passed it down to him...no work involved.  There is the Hostess company's current situation in which management is unwilling to accede to labor's demands, and the company is going into bankruptcy...again.  The company's compensation committee purportedly tripled the CEO's pay and all executive compensation was increased by 35% to 80% in anticipation of the bankruptcy in order to avoid the constraints that the bankruptcy court would have imposed.  The CEO did renounce a portion of that pay raise according to the Wall Street Journal, but he jumped ship anyway.  He was the sixth CEO in a decade to be hired and leave, and apparently none of them wanted to stay to help the company overcome its problems, which would seem to be the only way to justify the exorbitant compensation packages that are often hundreds of times what the average worker makes "on the line."  It isn't hard to guess whose labor is more demanding in that context, yet as far as compensation is concerned, for the easiest job--that is, running the company when it is running itself quite nicely or in other cases wrecking a company and then taking a prearranged compensation package that makes it unnecessary to ever work again, even to maintain the lavish lifestyle that being an executive in America so often yields--the sky is the limit.  But, while it takes perseverance to go to work on an assembly line every day for thirty years without praise or gratitude from above, never getting to the point of sufficient affluence that money is no longer a problem, those workers, who are indispensable to the production of the goods that yield corporate profits cannot get what they need to advance their life styles even a little.  Over the past thirty years, statistics show, the average working person has gained no wealth from his labors when his income and assets are adjusted for inflation.  Yet those in control of the nation's capital now want to make him work that much longer to solve the problems of the federal debt and deficit while they object to having to pay more in taxes even though the preponderance of their gains in affluence do not come from working but rather from allowing others to use their money.  It is not fair to expect workers to borrow money that they can possibly never repay to get educated in the techniques that increase their "productivity"... a euphemism for producing more for the same pay...as current economic policy would require just because business and industry don't want to incur the cost of training their workers anymore.  It is unreasonable to expect those on whose shoulders you stand to do more for what they earn when you already have more than you can ever use, and those on whom you stand have so little.

I look at it all this way.  If it were as easy to become affluent as the Republican conservative complex (Rcc) insists it is, everyone would do it.  We would all retire at fifty, and spend our summers on our boats rather than laying roofs and digging ditches in the heat.  But that is not the way it is, nor is it even possible.  Someone has to make the Twinkies that make the capitalists and the executives rich.  Someone has to watch their children and do the actual work while they attend meetings on the golf course.  Someone has to have a hard life in order for those barons of business and industry to have easy ones, and that is what American capitalists need to learn before they kill the goose that lays their golden eggs.  We down here will go on working as long as it is reasonable to do so.  But if you begin to take from the working person what little he has--the right to a modest retirement at an age when he can still enjoy it and to medical care that doesn't impoverish, or elude him altogether because he cannot afford it--that may not continue to be the case.  I've said it before, and I'll say it again.  To borrow the old Shakespearean quote from Henry VI, the first thing they'll do if the revolution comes is "kill all the lawyers."  But the second thing, I'll bet, is they'll eat the rich, starting with the CEO's...if anybody can find them.

Your friend,

Mike

Dear America,

Everyone is talking about this "fiscal cliff" as if it were a strictly adventitious circumstance...as if we got here by accident.  But the reality is that we are here as a consequence of a strategy that was initiated very early in the first Obama administration.  You will probably recall Mitch McConnell standing in the well of The Senate saying bluntly that the goal of the Republicans was to make sure that President Obama was a one term president, and they nearly succeeded.  And while the present turn of events was not necessarily on McConnell's mind, it is part of the natural course of events that he and his colleagues in the Republican conservative complex (Rcc) set in motion at that very moment.  This fiscal conundrum might not have been foreseen, but a conundrum of some kind with which to foist blame on The President was the goal all along, and this particular conundrum was engineered over a year ago...with malice aforethought.

Start from the proposition that the "super committee" concept was a natural derivative of McConnell's vow to nip the Obama liberal juggernaut in the bud.  Three years later--not coincidentally one year before the presidential election in which Obama would be seeking that dreaded second term--the Republicans seized on the need for a reauthorization of the federal government's ability to borrow, but it could have been anything pivotal, and it would certainly have been something even if the debt limit had not been about to be breached.  The siege of the Obama White House had already been underway for those three years, and one thing after another had gone wrong for The President.  After a brief period during which he had effective majorities in both houses to work with despite the perfidy of the Blue Dogs in the House of Representatives, he did get what passes as health care reform enacted, but in reality, it was just health insurance reform...a pale imitation of the universal health care that he wanted.  And there was Dodd-Frank, but the Republicans have managed to keep just about all of it from being effectuated.  Thus, despite these almost Pyrrhic victories, Mr. Obama's platform had been virtually eviscerated and the thwarting of his plan for the future turned into an exclamation point in the form of the November 2010 elections after the Rcc's declaration of war at the very beginning of it all.  But instead of confronting his adversaries with determination, The President began a period of capitulation and conciliation intended to demonstrate to the American people that he was reasonable.  He read the electoral repudiation of the Democratic congress as a repudiation of his mandate and he tried to snuggle up to the business-based axis of power that was arrayed against him in order to recapture public favor.  But that didn't work either as they continued to push, now flush with their subtle victories and the recent election, and the package of legislation coming out of the lame duck session of congress in the fall of 2010 completed the drubbing that McConnell had initiated and the election had brought to fruition.  The Republicans came out of it looking like they had compromised when all they really did was capitulate on things like "don't ask, don't tell" as part of a putative bargain with the Democrats when they would have had to give in on that point and several others that they conceded anyway due to popular demand.  As a result, President Obama looked not only weak, but like the cause of the stalemate that had plagued him all along.  Then, after another year of filibuster-enabled obstruction, the debt crisis came along and the Republicans fashioned another heads-I-win-tales-you-lose deal for him to sign, believing all along that even though it comprised both things they wanted and things they didn't, they would be able to reverse the latter while keeping the former in place.

Then, at last, President Obama developed some spine, and some spleen as well, and over the past year, he has done what he should have done all along...what strong presidents always do: he made his case to the American people.  And here we are, a new term looming for him and a new determination emanating from his White House as well.  The Republicans started the year wailing about the cuts in the defense budget that were part of the "sequestration"--the mandatory cuts that were triggered by their refusal to give an inch during the super committee meetings--on which they had insisted...and predictably so...but not at all about the other cuts to domestic programs.  They apparently thought that they were on the right side of the issues in election terms, but as it turns out they overplayed their hand and lost...a big loss considering that only a year ago the Democrats and The President were on the ropes and the economy is still in the tank in many ways.  If their stars were ever properly aligned, November 6 was the day, and they lost anyway.  So now, President Obama is the emboldened one, and he is digging in with the knowledge that there is no future election to win.  If Harry Reid of The Senate does what he has to on the first day of the new congressional session--change the rules so as to end the filibuster as a tool for the Republicans to use in stopping every initiative--and Nancy Pelosi, who has just announced her desire to continue to serve as leader of the Democrats, tells those few Blue Dogs left in The House that they either put on their boots for the cause or find someone else's party to be a part of, the Republican Procrustean condition for any deal of any kind--tax cuts for the rich--will be a thing of the past.  Let's just hope that the new era of Democratic fortitude stands the test of time...for two more months anyway.

Your friend,

Mike

Dear America,

About a week ago, the hosts of the NPR program, "All Things Considered" (ATC), acknowledged the hackneyed nature of another of Washington's tired phrases, "The Fiscal Cliff."  As Will Rodgers used to call them, "them birds" in Washington love to demagogue by calling things by catchy, sententious names that will, they think, win the public over to their point of view, and ATC invited all its listeners to come up with an alternative.  So I made a suggestion.  Why not call it the BBB: the Bipartisan Balanced Budget.  The point I made is this.  If you let all of the Bush era tax cuts expire and return to the rates prevailing in the Clinton years, which notably produced 23 million jobs, you gain $700 billion every year.  Then, if you reduce all non-discretionary federal spending by 10%, you save another $500 billion...again, every year.  Our budget deficit this past year was about $1.2 trillion, and guess what the BBB adds up to.  That's right, $1.2 trillion.  Of course, the tax increases won't be popular with anyone...including me.  But sometimes a country's gotta do what country's gotta do.  And as for the budget cuts, well, we have eleven fleets in the navy, each based on an aircraft carrier.  The cuts would bring us down to ten, and there are only seven seas, so that shouldn't be much of a problem for the navy.  As to the army and marines, the war in Afghanistan is being wound down, and that represents $100 billion per year, which is more than 10% of the $740 billion defense budget by itself if you consider it a recurring savings.  And in light of the fact that we spend more than the next 18 countries combined, it seems justifiable.  The other departments of the government, well, I'm not so sure where the money will come from there.  But since Social Security and Medicare are not part of the federal budget (you have heard me obsess about the Republican conservative complex's (Rcc) insistent canard to the contrary, so I won't go into it again, though I invite you to reread some of my rants if you like), the most important of what the Republicans call "entitlements" in their slyly pejorative way is not affected.  And all the congress and The President have to do is...nothing.  Surely even they can do that.  In the past, they've been quite good at it.  Which brings me to a second point.

One of the problems with all of this budget talk is that the numbers keep shifting.  The congressional Budget Office (CBO) has just come out with a new estimate of the cumulative impact of the BBB, as I like to call it, or the fiscal cliff if you prefer current jargon: $603 billion.  Given that the last two presidents, representing administrations for twelve years total, have increased the national debt by federal budget deficits totaling about $10 trillion while the first of those administrations inherited a budget surplus, the question that comes to my mind is what have we been spending all that extra money on.  The Clinton administration's legacy budget--that is the budget for the first year of the Bush administration that followed--generated a budget surplus of over $235 billion, but it was immediately followed the next fiscal year, Bush's first, by a deficit in excess of $30 billion if you exclude the money received into the Social Security Trust fund, which doesn't belong to the federal government anyway.  Granted, that was the year of the 911 terror attacks, which damped the economy significantly, but the deficits just kept on coming...compounded by the infamous Bush Era Tax Cuts and two wars in the middle east.  So how should we proceed?  Well, there's a recent model we can follow and it will tell us with precision: the fiscal year 2001 budget.  What I would suggest, and I have suggested this before, is that we start off with that budget and then determine what we can afford on that basis.  We could begin with a surplus and diminish the national debt every year, or we could reduce the amount by which we paid down the debt and spend a little more, but that surplus could be the limit of increased spending, and thus the national debt would never go up again...and that at least would be progress over our current state of affairs.  So, why hasn't anyone in power proposed this plan?

The answer is...I have no idea.  I'd like to presume that there is a good reason so that I could have some faith, at least a little, in our elected officials.  I am often criticized for my tendency toward reductionism--that is, reducing things to their simple elements--and then constructing a solution to the problem at hand from those elements.  It seems a perfectly valid analytical technique to me, but somehow it isn't popular with people like...politicians.  I guess there can be too much of a good thing, assuming that analysis is a good thing, and maybe that's the reason that politicians see no merit in the idea of going back to a period of success for a model on which to pattern the future.   Maybe that kind of simple reasoning offends them.  I don't see why, but perhaps that's just a limitation in me.  So, I'm not going to propose anything like this to anyone in politics as none of them are likely read this letter anyway.  But what the hell.  I figure, we're friends, so I'll propose it to you.   You're not offended, are you?

Your friend,

Mike

Dear America,

More has come out of the election than just a continuation of the status quo.  We still have the same president, for which I am thankful as I was dreading the alternative, and we still have the same array of power in the federal legislature.  But in addition, Mitt Romney may have been given the chance to do something meaningful at last.  He will never be president, but if he seizes this opportunity he might do something just as noteworthy.  He can now either move off the political scene and be the grandfather that he also wants to be, or he can assume the mantle of dean of the Republican Party, which he is both entitled to and now, ironically, qualified for.  Romney can become what Bill Clinton is, not just to his party but to the nation; Mitt Romney is now the closest thing that the Republican Party has to an elder, and beloved statesman.

In the wake of his defeat however, Mitt Romney has two impediments to his immortality in front of him: first, will he decide to assume the role for which I think he was destined all along, and second, is the Republican Party collectively smart enough to see him waiting in the wings and draft him into their service and that of the nation.  The latter is no sure thing, just as I didn't see Romney's higher potential either...not until he gave his concession speech.  He is ambitious by nature, but not devious, as I had come to believe him to be based on the campaign he ran...especially in the end with the less than half truths of, for example, his ads about moving Jeep manufacture to China.  And if the Republicans can overlook Romney's lack of a conniving nature, they have a chance to redeem the party name, and perhaps the party itself.  They have demonstrated a preference for prevaricators, but if they can give the truth a second look, Mitt Romney might be just the face they need to project, assuming he clings to his higher nature rather than returning to pandering to the casuistic Republican base.  Only they could give him the nomination, but once they did, there was no way he could win the election continuing to tell them what they wanted to hear.  The question is, will Romney and his fellow Republicans see that.

Notably, the Republican conservative complex (Rcc) contingent in congress, that includes both Tea Party Republicans and Blue Dog Democrats, lost ground, albeit only a little.  The conservative tide that seemed to be flowing in now seems to have ebbed and is receding, so the audience for a moderate Mitt Romney's real politics might be a little larger today than it was on Monday.  But there remains a stubborn core in the Republican Party that refuses to accept the waning credibility of supply-side economics, which is the contingent that Romney might address successfully to redeem the viability of his party.  In Arizona, for example, Republican Senator-elect Republican Jeff Flake was interviewed on NPR after the statement of Speaker of the House John Boehner made a statement in his grave, self-important tone that the Republicans were open to increased revenue as long as it was business friendly.  That is code, as it was last year and the year before, for a promise that the Republicans in congress will continue as they have been...refusing to support new taxes of any kind...because under supply-side theory all taxes are inimical to business.

But Romney could make a difference on this point with people like Flake.  If he points out that the average American pays taxes on his dividends and interest at his marginal rate and Republicans aren't complaining about that, the thin veneer of respectability that supply-side defense of wealth concentration still maintains could be chipped away to the extent that special treatment of capital gains loses its luster as a shiny object for supply-siders to be attracted to.  Reversing that policy--making dividends and interest taxable at lower rates and capital gains at the marginal rate--would be a "business friendly" policy change that not just Americans, but American voters might just notice and reward in the next election.  Throw in the fact that money in taxpayers' pockets will do more to stimulate the economy than money in patricians' bank accounts that they will never spend and you have a real stimulus for the economy that is also a winner at the polls for whoever makes that point.  That is the future for the Republican Party: a more moderate, consumer friendly economic policy...even if they don't abandon the supply-side completely.  The question for Mitt Romney is, will he be the agent of that change?

Your friend,

Mike

Dear America,

Election day has come, and tomorrow we will no longer be subjected to the incessant and ugly campaigning by which this election, more than any other I can remember, has been characterized.  That at least will be a boon to us all.  And we will no longer have to listen to members of the various media asking their pundits who is going to win, nor will we have to listen to their pontifications on the subject.  But the aftermath of all this is a different thing.  We will be living with it for at least two years...until the occasion of the mid-term elections which will be the next time we have the opportunity to do anything about our government...Romney's or Obama's.  So now is a time for reflection on the past and expression of our hopes for the future, and I suspect they will be different depending on who becomes the president.

I suppose the goals and aspirations of the American people already seem different depending on party and candidate affiliation, but in reality they are not, and the campaign polemics demonstrate that fact.  Who isn't for more jobs.  Both candidates say they will create many of them over the next four years if given the chance.  And who wants to limit educational opportunity?  There may be some who would do so, but none who admit it openly.  And we all want more small business growth, which is the primary source of new jobs, and also the most legitimate path to individual prosperity beyond the norm.  We want access to birth control, low inflation and rapid economic growth, health care for everyone, lower taxes, a balanced budget and reduction of the national debt, and we all love Mom, world peace and apple pie.  Thus, if you consider the campaigns of the two parties this year, they both focus on accomplishing the same goals, and they do so because everyone wants the same thing: a good life for as many people as possible.  Supposedly, the campaign has been about contrasting the strategies of the two sides in the political debate, but nothing was said in the campaigns that really distinguished the goals of the two parties or those of the two major candidates for president.  In fact, if you look beneath the fulminations that all campaign ads, both positive and negative, urge on you, it will be plain that while each claims that the other cannot reach our goals, the goals themselves are universal.  So, during the campaign, what did we actually learn about the candidates themselves and their strategies for the next two or four years.  That is a rhetorical question;  we learned nothing.  What we did learn is whose prosperity is most important to each side when determining what to do to effect those goals...and that's the only thing we learned as the last debate between the presidential candidates demonstrated.  It has all been apple pie and world peace.  This could have been a beauty pageant and we wouldn't have heard anything different.  Still, as to the strategies the parties will use, there is a difference and it will have a profound effect on both the most fortunate and the least.  As to the rest of us, we will barely see any difference because of who gains control of our nation.

I say that because the only real issue is how much money will get into the hands of which end of the economic spectrum either through government largess or unrestrained greed.  That's it in a nutshell.  Will we help the rich get richer or the poor get less poor.  The rest of it will take care of itself.  A new immigration policy wouldn't effect those who had the resources to come here legally; it would just change the lives of the people who for the most part do our dirty work for minimum wage and the children they brought here to go to school.  Financial regulation wouldn't affect you and me because we don't have the kind of money that needs, or is even the target of, regulation.  But the rich and the super rich would either continue to have a free hand in controlling the wealth of our nation or be constrained so that they don't wind up with so disproportionate a share of what they didn't produce in the way of common weal, even if their parents' money was used for the purpose.  Going to school will continue to be difficult to afford, and we who are moderately fortunate will continue to be left to our own devices as we have been for decades regardless of who assumes control.  But for those less fortunate, there will be either government support or continuing downward pressure on the programs that have made college even moderately affordable and they will have to undertake more and more burdensome debt in the hope of getting the benefit of doing so over a lifetime.  And as that phenomenon unfolds, higher education will either become ever more the province of those who can afford it most as the jobs at the top of corporate America become more and more their exclusive domain--concentrating the nation's wealth--or it will become the great equalizer that makes prosperity truly accessible to all.

I just voted but I don't know who else will...whose votes will turn the election: rich or poor, ethnic or snowy white, male or female.  But I believe this: if there were any real justice in the world, those of us in the middle wouldn't determine the country's direction, though that seems like what is happening.  It would be the people at the extremes of American capitalism.  They have the most at stake.  That is what this election will really tell us...if we are really a just people, the votes of the rich and the poor will elect the president and our congress.  And we all know which end of the spectrum has the most votes to cast, so our national character should be plain as day.  But instead, we will wait until late tonight to hear what fate we in the middle class have imposed on our nation...and whether we are a just middle class or not. 

Your friend,

Mike

Dear America,

The problem with political advertisement is that no one makes a distinction between goals and promises, and the consuming public doesn't demand that the candidates do so.  In the area of energy policy, Mitt Romney says that he will make us energy independent in ten years.  Well, that's a nice goal, but it isn't the promise that he purports to be making.  No president can make us energy independent, and the reason is that petroleum is sold on mercantile exchanges all over the world, and oil companies sell the oil they pump out of the ground on those exchanges to the highest bidder.  The result is that our oil...that is oil that comes out of our waters and our lands, both private and public...gets sold on those exchanges, and our oil companies, even though they have just pumped that oil out of the ground, buy the oil they refine into gasoline, plastic for our water bottles and the like on those exchanges and charge us gasoline prices based on the price they paid.  That is why when the price of gasoline goes up, Exxon-Mobil makes even bigger profits.  They don't make the extra money at the pump, they make it at the well head where the oil comes out of the ground or out from under the sea.  So, when the Republicans say that more drilling is the answer to our energy dependency, that's nothing but a free market fantasy.  And when Mitt Romney calls energy independence one part of a five part plan, what he is really saying is that energy independence is one part of a five part fantasy that can never come to pass unless we nationalize our petroleum industry.  Of course, to old sixties radicals like me, nationalization is a sound idea.  But in this country, where socialism is a dirty word even though no one ever bothers to explain why, nationalization will never happen...at least not in my life time, and probably not in yours either if you're old enough to read this.

So, Mitt Romney sells the goals that he thinks the people desire as a plan, and the people in the electorate seem to be failing to make the distinction between what they want and what the candidate can do.  It amazes me because the information necessary to discriminate between wishes and goals is all around us.  But one thing the American professional politician can count on is that no one will ask any questions if he says something that sounds good to the person listening.  And just to be fair, now President Obama has a little ad that he has started to run in which he states his multi-part "plan."  It's no more a plan than what Romney is selling, but just as with negative advertising, if the other guy does it, you have to do it too: fight fire with fire.  I must say tough that there is a difference.  When Obama proposes energy independence, he can at least say that during his administration energy production has reached levels never before seen.  And when he says that we have to expand education goals to include preparation for the work that is available by federally funding programs that link community colleges to specific businesses and industries, that is already being done in many places, so the framework for a program to effectuate that goal has already been created.  Whether it's his or not, it's a plan, not just a goal like "energy independence."  Then, there's debt and deficit reduction.

You may recall last summer when The President and John Boehner, the Speaker of the House of Representatives, sat down together and tried to formulate a plan to do just that...the "grand bargain" as they put it.  Mr. Obama made a proposal that would have reduced the deficit by over $4 trillion, but it included about one third "revenue enhancement," a euphemism for tax increases mostly paid by the rich, which Boehner couldn't sell to his Tea Party constituency in Congress, so he pulled out of the talks.  That was, however, a plan rather than a goal, and President Obama is still up for it.  Romney, on the other hand, proposes to cut the marginal tax rates by $5.8 trillion by "closing loopholes" in the tax code.  But he refuses to tell us which ones, and there aren't enough loopholes to make up that kind of tax reduction anyway...unless of course you increase middle class taxes to make up the difference between what the rich give up and what Romney gives them in exchange.  That's not a plan; it's not even a goal.  It's a ruse.  In fact, when asked during the last debate whether, if the loopholes didn't fully pay for the reduced tax rates he would reduce the rates somewhat less so as not to add to the deficit, he didn't agree to do so, he just said that won't happen.  So not only is that part of his platform not a plan, or even a goal, it's just a self-serving delusion that he wants us all to endorse with our votes.

To me, it all devolves to this: we have made some progress in several areas under President Obama with a hostile and disloyal congress working against him all the while, but Mitt Romney wants to undo it all...including universal health insurance.  The President promises only one thing: to pursue his original goals.  And I believe that he learned in his first three years--that is the two years before the 2010 mid-term elections plus the one year in which he chose to let a banker, Bill Daley, be his chief of staff thinking he could recruit business people to The President's program--that he is going to have to beat on the other guys because there is no recruiting them, and that's what he will do.  Obstruction was their game, and it always will be, but this time, The President will call them on it at every turn.  Romney promises only one thing as well.  He'll give us what the Republicans always give us: lower taxes for the rich, a free hand for business, including financiers, and a stagnant quality of life for the working man while the rich man gets a new boat...a big one.  So, forget about promises and plans.  Just consider who's on your side...and who's on the other guys'.

Your friend,

Mike