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There Are Good Remedies to the Kavanaugh Problem

Introduction

As we head towards conclusion of the Kavanaugh hearings, both Republicans and Democrats are in a titanic battle that is completely political in nature. Whether Kavanaugh is confirmed or not, there are good remedies most citizens are unaware of that will probably satisfy sixty-five percent of the American voting population. What are these remedies? Well, some are short-term fixes and some are longer-term.

General Overview

The state of Maryland where Kavanaugh went to school has no Statute of Limitations on certain sexual crimes committed:

“No time limit for prosecution of any felony sexual offenses (Smallwood v. State, 51 Md.App. at 468, 443 A.2d at 1006, (in this State a prosecution for a felony “may be instituted anytime during the life of the offender.”))

There is no “bye your leave or stay out of jail card” just because time has elapsed.

If Kavanaugh is appointed, his confirmation can be rescinded because, whether a U. S. Supreme Court justice or not, no one in a democracy is above the law. Republicans more than Democrats are in a “Catch-Twenty-Two” situation where they are damned if they confirm him, and damned if they don’t. Why? Because a blue wave is coming baby and it’s more powerful than a 100 foot wave tsunami and Hurricane Florence combined.

As it looks today Democrats are, in the mid-term elections, going to retake the United States House of Representatives, the United States Senate, and several governorships in previously red states. When the Democrats come into office in January there are several legislative actions they can take despite what the Republicans do in September. However, in the months ahead remaining Republicans will get a new lame-duck president (Mike Pense) once Donald Trump is impeached by the new Democratic majority in Congress.

It won’t be till 2020 that major judicial reforms regarding the U.S. Supreme Court should come about.

Why? Because the U.S. Constitution only allows presidents to bring forth nominations for the United States Supreme Court. Also, presidents cannot appoint nominees directly because the U.S. Constitution requires the advice and consent of the U.S. Senate.

An amendment to the U. S. Constitution would be needed to let Congress bring forth nominees but currently legislators cannot do that. The Congress could set in motion a Constitutional Amendment but that would be a lengthy process that could take years to complete. Therefore, some of my recommendations ahead relate to short-term fixes and others that are more long-term.

Short-Term Proposed Remedies

One of the first acts of the new congress, following the mid-term elections (meaning January 2019) should be to have the FBI conduct a thorough investigation of any and all allegations made against Kavanaugh. If it is found that Kavanaugh committed crime(s) he should be immediately prosecuted and removed from any judgeship.

One of the most important acts of the new Congress will be to impeach President Donald Trump. The safety, sanity and authenticity of a real democracy in the United States is currently in peril. Once removed from office Trump, who is a traitor to his country, needs to experience total asset forfeiture of all his holdings, and he should be given a new wardrobe—A large orange jumpsuit.

Long-Term Proposed Remedies

When Roosevelt was reelected in 1936 he had to deal with a Supreme Court that wouldn’t pass his New Deal legislation. He did this by getting passed the 1937 Judicial Procedures Reform Bill. What this bill did was to require all justices on the court to retire at age 70.

The U.S. Constitution says nothing about how many justices can compose the court. The number of justices we have now is simply based on prior arbitrary decisions of the U.S. government. In other words, the U.S. Supreme Court doesn’t necessarily have to be composed of just 9 justices.

Roosevelt’s “packing the court plan” worked and a host of New Deal legislation was subsequently approved by the highest court. One could argue that Roosevelt’s political interference to subvert the highest court in the land isn’t any different than current Republican attempts to pack the court with ultra-conservative tainted judges. They’ve done everything they can to subvert an honest process by having no real investigation done by the FBI, hiding Kavanaugh documents during his time with the Bush administration, and only half-heartedly, if at all, showing respect toward witnesses and victims of sexual battery, lewd licentious behavior, and attempted rape.

One could ultimately argue that since justices themselves tend to tailor their decisions based on societal value judgments that are couched and hidden in sophisticated legal analysis and jargon; by effect, it creates an analytical subterfuge which belies the fact that U.S. Supreme Court justices are supposed to be defenders of facts, the law, legal precedent, and the United States Constitution.

A previous blog of mine explored the faulty analysis (by conservatives and those who promote a strict literal interpretation of the U.S. Constitution) because they have failed to understand what the original founders said themselves about how to interpret their new constitution by future generations of Americans. The founders recognized the need for flexibility of legal opinions over time in accordance with the needs of a changing country and a changing citizenship.

Most sociologists today explain that differences in human societal collective actions, including legal ones, are caused by differing social values. Said another way, rightly or wrongly, values rule society and all its actions. And change in values leads to tension among the people. Let’s be honest, whether liberal, moderate, or conservative, change is always difficult and anxiety provoking.

Psychologists also contribute to our understanding of social behavior. Currently they have been able to detect highly individual and internal processes that have led to how our current President manifests psychiatric, sociopathic and dementia symptoms. There is nothing more dangerous than a sociopathic amoral president with power. Either academic perspective explains very well why the country and our democracy has been corrupted and perverted by some Russian stooge in the White House since January 20, 2017.

My recommendation in the long-term category is that before a new version of the 1937 Judicial Reform law is passed, we first need to elect a democratic president because, based on the U.S. Constitution, only presidents can nominate justices to the U.S. Supreme Court.

On a personal note I think an arbitrary, yet useful number of Supreme Court justices, should number 13 rather than 9. The transition, when justices retire, might be less fraught with conflict and anxiety particularly during confirmation hearings of a new nominee. Then again maybe I’m just too optimistic an individual. Maybe 21 justices is a better number to put on the U. S. Supreme Court. What would be your ideas on this issue?

Final Comments

The major reason the United States is on a perilous path to self-destruction actually goes back to 1994 when a gaggle of conservative Republicans tried to high-jack the country with its “Contract with America.” At the time President Clinton referred to their proposal as more like a “Contract on America.”

The lasting signature of the Republican Party, then as now, is to pass very little legislation that helps people; they oppose all efforts to control “the good old white boy network.” They did pass one piece of legislation granting tax benefits. But the new taxes really benefited large corporations and already wealthy individuals and essentially accomplished nothing in all other social/economic areas. “Trickle-Down Economic Theory” was disproved decades ago.

The Republican political party is the party of “no.” The Tea Party members of 2010 and the Freedom Caucus of today deserve to be booted from Congress during the next 4 years. Senators like Grassley, McConnell and Hatch are at the top of the list of people who need to be removed from political office.

I’ve said to my friends many times over the years that conservatism is nothing to be proud of, but nevertheless there is nothing wrong with having moderately conservative political views; after all, no one is perfect.

Now that there are at least three women bringing sexual allegations against Kavanaugh I’d like to recommend, that any senator who votes to confirm Kavanaugh in the days ahead, should be voted out of the Senate come their reelection day.

These days Republicans are more recalcitrant or obstreperous than ever. Now that they’ve reached a new all-time low for lack of decency and moral character, Republicans have earned a new description worthy of a plaque. Not only is conservatism nothing to be proud of it, now it is something to be truly ashamed of.

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A people that values its privileges above its principles soon loses both—Dwight David Eisenhower

Some of the objectives I’m about to describe are my political hopes for 2018 are tongue-in-cheek. But some items I am deadly serious about. One hint: I really do want President Trump impeached early in 2018. Some of the other objectives follow from this. It’s up to you to decide whether the ideas and opinions expressed in this blog are something you’d like to see happen in 2018.
This holiday season each of us sees the future as we would personally like it to be. Here are my wishes and hopes for 2018:

Goal: A Better Country and World

Donald Trump is impeached in early 2018 for Obstruction of Justice and other crimes.

The Freedom Caucus is utterly destroyed in the November, 2018 mid-term elections
After November, 2018 Republicans will cease to exist as a viable political party in the United States.
There will be no war with North Korea.
Black Ops from the CIA will be put in charge to do diplomacy with North Korea: Like the Gambino crime family, Black Ops will make Kim Jong-Un “an offer he cannot refuse.”
The people of Russia will overthrow Vladimir Putin.
The people of Iran will overthrow its Supreme Leader Ali Khamenei.
The United Nations 1948 Universal Declaration of Human Rights will become World Law for all nations to adhere to.
The United States Department of Justice Civil Rights Division will put forth the effort to investigate all police shootings in the United States.
Betsy (Elizabeth Dee DeVos), the educational Czar in the Trump Administration, will be fired.
Jim Jordan, the Republican Congressman from Ohio will be impeached along with his other Freedom Cauca’s cronies for Obstruction of Justice.
Core diehard Trump supporters will be deported from the United States for treasonous acts of disloyalty, lack of voter competence and outright un-American values that are anti-thetical to our country’s laws, the United States Constitution, and the principled institutions of our democracy.
The United States government in 2018 will no longer accept the now defunct “Trickle-Down-Economics Theory” of job creation. Instead its Guiding Principle will be [not promises of job creation] but stipulating and connecting tax breaks to actual jobs created. Otherwise, the tax cut money will be treated as a loan to be repaid to the United States government. Said another way No Business or Corporate welfare or gifts allowed. We want results not promises.

If all of these hopes and wishes were to come to fruition in 2018 it would indeed make America Great Again. Below is a little humor to entertain you as we enter 2018.

  • “So enjoy your victory, Trump voters! Because when you’re dying because you don’t have health insurance to treat the infection you got from a back alley abortion you had to get because of fetal lead poisoning, you can say to yourself, ‘At least I didn’t vote for someone with a private email server.'” –Bill Maher
  • “As you know, Trump is being accused of sexual misconduct by a slew of women. Of course, that is a case of ‘he said’ and ‘she said, she said, she said, she said, she said.'” –Jimmy Kimmel
  • “Trump denied the (groping) allegations, calling them ‘ludicrous’ at a rally today. But here’s the problem for Trump: There’s very good reason to believe he did what he’s accused of. Why? Because an irrefutable, inside source told us so: Donald Trump. Donald Trump is his own Deep Throat. He’s Creep Throat.” –Seth Meyers

Enjoy 2018 everyone!!!

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The 2016 Election, the Media, Favorability Ratings, and the Shifting American Electorate

 

“Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence.”

John Adams, 2nd President of the United States

 

The cornerstone of all science is observation. Lately I’ve made some interesting observations that raise a lot of questions about the 2016 election, the media and the shifting American electorate.

     The Status of the Republican Party

A good question to consider is why more than 50% of Republican voters seem to prefer outsiders rather than professional politicians, for example (Trump, Carson or Fiorina). By comparison, on the Democratic side, Democrats mostly seem to prefer tried and true democratic professional politicians like Clinton, Sanders, or O’Malley. I do not have a guiding theory to explain these peculiar political party differences in preference. Although Democrats too have different preferences among their candidates, they appear nonetheless to be more at ease with their choices than do the Republicans.

This is a fair question to ask—why it is Republicans are so dissatisfied, and why it is the Republican Party is in such disarray due to in-fighting.

With respect to these questions, I do have some ideas that relate to congressional gridlock, and favorability of the candidates as seen by demographically different voters.

Congressional Gridlock and Demographic Preferences

Many Republican voters who now express contempt for professional politicians are the same voters who willingly sent professional Republican politicians to Congress during the 2014 mid-term elections. It was a Republican landslide just a year ago. This may mean that Republican voters since 2014 have no one to blame but themselves for their own dissatisfaction.

And it’s true. Although the Republican Party since the 2014 mid-term elections has controlled both the House and the Senate, virtually nothing has been achieved due to recalcitrant ultra-conservatives and other malcontents who desired to commit mischief with gridlock and threatening to shut down the United States government.

During the last year, and more recently, Republicans wanted to defund Planned Parenthood. The results: their efforts failed. They also wanted to nix the Iran nuclear diplomatic agreement. The results: their efforts failed. They wanted to deep-six Obamacare and they failed (several times I might add). They wanted to shut down the government over the fiscal budget (in 2013). Except for a few days, the result was abject failure again and condemnation and scorn by the American people against the Republicans. All the President had to do was threaten a veto and they caved in like a very bad West Virginia mining accident. With Republicans in the majority, why couldn’t they control and overturn a presidential veto?

In addition, it is clear that Republican ultra conservatives from the Benghazi Committee have been wasting millions of taxpayer dollars money in order to vilify and tarnish the reputation of Hilary Clinton. Please observe the “smokescreen of doubt” that was created from these hearings; also note that no charges of any kind have yet been filed against Hilary Clinton. Polls showed that even Republican voters understand what was really happening in those hearings.

The Media and Republican Presidential Candidates

There is one area where I am in complete agreement with Republican presidential candidates. It is their anger at the media. There are liberal media and there are conservative media, and they are just as biased as any politician. It’s a common belief that the media are able to sift through truth and falsity and always have the public’s interest in mind. Nothing could be further from the truth. Many hide behind the smokescreen of the First Amendment in order to keep hidden their real intentions. Head-hunting and biased questions (and got-you questions) are still the goal of many reporters around the country. When watching them work, as in the debate in Colorado recently, I felt that the public’s interest in learning a candidate’s real view on many important issues was left out. Consequently, the media had their own agenda that night. Our interests were totally ignored.

Gone are the days of superior reporters like Edward R. Murrow, Chet Huntley and David Brinkley, and the great Walter Cronkite. Today, we’re more likely to get Heckle or Jeckle as “talking heads” news journalists or commentators. There are some exceptions to what I’m saying.

In fairness, today there are some really good people in the media such as Don Lemon, Erin Burnett, Rachel Maddow and one of the very best news reporters, Lester Holt. What I like about these journalists is that, although some opinion creeps into their shows, they nevertheless make a real sincere effort to bring out the facts for the public.

I do have some personal experience with this issue. Back in 1996 I wrote a very positive editorial for the Sacramento Bee on the Chief of Naval Operations who had committed suicide. I had worked directly as a gunnery yeoman for the Admiral when he was just an Ltjg/Lt. onboard the U.S.S. John R. Craig (DD-885) during the Vietnam War.

Subsequent to my editorial, I was contacted by a reporter from The Washington Post. He too was writing a story about the Admiral. However, he lied to me about what he was really up to. When his article came out in the Washington Post a week or two later, it was a lousy chop piece denigrating the reputation of the Admiral. This Admiral was the first ever enlisted man in United States Navy to rise from seaman recruit to top officer in the U.S. Navy with four stars (as Chief of Naval Operations). The hard lesson I learned was never ever trust a reporter.

When the public is looking for facts about a presidential candidate, always remember it is your responsibility to sift out truth from falsity. You can never depend on the media.

Favorability Ratings

Another important significant factor is favorability ratings. This may be the closest thing to looking inside the heart of the voter, where their sense of who is best for the White House is a gut level reaction to that candidate. Are they liked, or not?

     Research by the Pew Research Center indicates the Republican Party may be in deep trouble next year with the electorate.

The Republican Party’s image has grown more negative over the first half of this year. Currently, 32% have a favorable impression of the Republican Party, while 60% have an unfavorable view. Favorable views of the GOP have fallen nine percentage points since January. The Democratic Party continues to have mixed ratings (48% favorable, 47% unfavorable).

The Democratic Party has often held an edge over the GOP in favorability in recent years, but its advantage had narrowed following the Republicans’ midterm victory last fall. Today, the gap is as wide as it has been in more than two years.

Republicans in particular are now more critical of their own party than they were a few months ago. About two-thirds (68%) express a favorable opinion of their party, the lowest share in more than two years. Six months ago, 86% of Republicans viewed the GOP positively.

The latest national survey by the Pew Research Center, conducted July 14-20, 2015 among 2,002 adults, finds little change in more specific perceptions of the two parties.

As has been the case over the past four years, the Republican Party is viewed as more extreme in its positions than the Democratic Party. Currently, 52% say the GOP is more extreme, compared with 35% who say this better describes the Democratic Party.

The Democratic Party continues to hold wide advantages over the Republicans on empathy and honesty. By 53% to 31%, the Democratic Party is viewed as “more concerned with the needs of people like me.” And the Democrats hold a 16-point lead on governing in an honest and ethical way (45% to 29%).

Neither party has an edge in perceptions about which could better manage the Federal government: 40% say the Republican Party, while an identical percentage prefers the Democrats.

On issues, the Democratic Party holds double-digit advantages as better able to handle the environment (by a margin of 53% to 27%), abortion and contraception policies (50% to 31%), education (46% to 34%) and health care (46% to 36%).  The Republican Party has wide leads for better reflecting people’s views on gun control (48% to 36%) and dealing with the terrorist threat at home (44% to 34%).

In some cases, such as terrorism and foreign policy, the Republicans have lost ground since January. There has been little change in views of the parties on other major issues, including the economy and immigration. Neither party holds a significant advantage on these issues.

The survey finds little change in Barack Obama’s job approval: 48% approve of the way he is handling his job as president while 45% disapprove. Obama’s rating fell into negative territory at the end of last year, but has been mixed since January.

Recent Pew Research Center surveys have found signs of dissatisfaction with the GOP among Republicans. In May, just 41% of Republicans said they approved of the job performance of the leaders of the GOP-led Congress. In 2011, after Republicans had won control of the House, 60% of Republicans approved of the job being done by their party’s leaders in Congress.

     The current survey finds that positive views of the GOP among Republicans have declined 18 percentage points since January, from 86% to 68%. Independents also view the Republican Party less favorably; 29% today, compared with 37% six months ago.

Democrats by contrast continue to express highly positive opinions of their party: 86% view the party favorably, little changed from 84% in January. Independents’ views of the Democratic Party remain at 38%, unchanged since January.

The advantage the Republican Party had on a number of major issues has eroded since earlier this year. The Democratic Party has improved its position on foreign policy, taxes, policies about abortion and contraception, and terrorism since February.

The Democratic Party’s advantage on abortion and contraception has increased 16 points since February; currently 50% say Democrats could do the better job dealing with policies on abortion and contraception, while just 31% say the GOP could. Though these ratings reflect a shift from February (when the parties ran even on this issue), the edge Democrats now hold is similar to its advantage in October 2014.

Five months ago Republicans were seen by more Americans as the party better able to handle foreign policy (48% said Republicans, 35% Democrats); today, the public is equally likely to say Republicans (38%) as Democrats (41%) could better handle foreign policy. And while the GOP maintains a 10-point advantage as the party better able to address the terrorist threat at home (44% vs. 34%), that edge has narrowed since earlier this year.

Over the last two years, the Republican Party has opened a gap over the Democratic Party when it comes to views about which party better reflects American views about gun control. In May 2013, following months of debate about gun policy, the public was divided over which party could better deal with gun control. Today, the GOP holds a 13-point edge on this issue.

Democrats Hold Edge on Health Care, Neither Party Has Advantage on Economy, Immigration

Health care remains an issue that favors the Democratic Party. Currently 46% prefer the Democratic Party on health care, while 36% prefer the GOP. The Democratic Party has maintained an advantage on this issue for much of the last several years.

Democrats also enjoy a 12-point edge on education policy (46% vs. 34%). And on the environment, the public favors Democrats by about two-to-one (53% say the Democratic Party could do the better job, 27% say the GOP).

Americans continue to be divided over which party would do a better job handling the economy. Today, 44% say Democrats could do the better job, while nearly as many (41%) say Republicans could do the better job. Neither party has held a significant edge on this issue over the last year. Last July the Republicans held an eight-point advantage (47% vs. 39%) on the economy.

The parties also run even on the budget deficit and immigration, little changed since October of last year. The public has been split over which party is better able to handle immigration for the last several years.

There remain substantial divides by age and race over which party is better on immigration. The Democratic Party holds the edge on this issue among Americans under fifty, 48% of whom say it could do the better job on immigration, while just 36% say the GOP does. In contrast, the GOP performs better among those over fifty on immigration: 44% say it would do the better job, while 35% say the Democratic Party.

Whites favor the Republican Party over the Democratic Party by a 10-point margin on immigration, while both African-Americans (by 36 points) and Hispanics (by 29 points) are more likely to say the Democratic Party is better able to handle this issue.

Yet there are substantial divides within whites. While white women are roughly evenly split over which party can better address immigration (39% say Democrats, 40% Republicans), white men favor the GOP by a 20-point margin (51% vs. 31%).

And among whites with college degrees, the Democratic Party holds a slim edge (46% to 38%), while those without college degrees and those who have not attended college favor the GOP on immigration: 50% vs. 26%. Among those with some college experience the percentages are 46% vs. 34%.

Overall, Independents are divided over which party could do the better job addressing immigration (38% say each party). As with most issues, partisans overwhelmingly say their own party could do the better job on this issue.

Democratic Party Viewed More Positively Than GOP on Key Traits

The Democratic Party continues to enjoy an advantage on a number of key traits and qualities, and these views are little changed since last fall. By a 22-point margin, more say the Democratic Party is “more concerned with the needs of people like me.” The Democratic Party has held a similar-sized lead on this trait since 2011, and at least a double-digit edge going back to when this question was first asked more than 25 years ago in 1988.

The Democratic Party also leads the Republican Party as the party that governs in a more honest and ethical way (45% vs. 29%). This balance of opinion is also little changed over the last few years.

As it has been since 2013, the public is divided over which party can best manage the federal government: 41% say the Democratic Party, while 40% say the GOP.

And more Americans identify the Republican Party as “more extreme in its positions” (52% say this, while 35% say the Democratic Party). This view is little changed since 2011.

Congressional Evaluations Remain Highly Negative

     Views of Congress continue to hover near record lows: Just 25% of Americans view Congress favorably, while 69% says they have an unfavorable opinion.

Although the GOP now controls both the House and Senate, Republicans and Democrats hold similar views of Congress: 29% of Democrats and 28% of Republicans rate it favorably. By comparison, Democratic ratings of Congress were consistently higher than Republicans’ ratings when Democrats controlled both chambers from 2007 to 2010.

Republican ratings of Congress are little changed since last summer, but Democratic ratings – which had grown more negative following the 2014 election – have rebounded somewhat (up seven percentage points since March).

Independents’ opinions of Congress are more negative than those in either party. Just 22% say they have a favorable view of Congress, relatively unchanged in recent months.

Views of Barack Obama

Obama’s job approval rating is little changed over the first half of 2015, with Americans about equally likely to say they approve of his performance (48%) as disapprove (45%).

Currently, about eight-in-ten Republicans (82%) disapprove of Obama’s performance, while views among independents remain mixed (48% disapprove, 44% approve). Obama continues to receive positive ratings from about eight-in-ten Democrats (79% approve, 16% disapprove). Ratings of Obama among partisans and independents are relatively unchanged over the last year.

Obama’s approval ratings continue to differ by generation, with younger generations more likely to view his job performance positively. Currently 55% of Millennials (those now ages 18-34) approve of his job performance, as do half of Generation Xers (those 35 to 50). By comparison, 44% of Baby Boomers (51 to 69 year olds) approve of Obama, along with just 37% of those in the Silent Generation (currently ages 70 to 87).

On five issues included in the survey, Obama gets a positive net rating on one: race relations. About half (48%) approve of his handling of race relations, while 43% disapprove. The public holds mixed views on Obama’s handling of health care policy (46% approve, 50% disapprove), the economy (45% approve, 51% disapprove) and global climate change (41% approve, 39% disapprove).

Obama’s performance on foreign policy remains in negative territory, and is little changed over the past few years: Just 38% now approve of how Obama is handling the nation’s foreign policy, while 52% say they disapprove.

While there has been little change in Obama’s approval ratings on many issues in the last year, his rating on health care policy has improved since December: Today, 46% approve of his handling of health care, up from 39%.

Obama’s rating on health care policy has improved across many political and demographic groups, but the change is particularly pronounced among those under 30: In December, 37% of 18-29 year olds approved of Obama’s handling of health care policy; currently 52% approve.

Obama on Foreign Policy: ‘Not Tough Enough’ for Many Americans

Just over half of Americans (53%) continue to say that Barack Obama’s approach to foreign policy and national security is “not tough enough”; 37% say he handles these matters about right, while just 4% say he is too tough. These attitudes are virtually unchanged since November 2013.

Republicans are far more critical of Obama’s approach to foreign policy than Democrats or independents. Eight-in-ten Republicans (80%) say he is not tough enough, compared with 54% of independents and just 32% of Democrats. Most Democrats (58%), along with about a third of independents (34%) say his approach is about right.

The 2016 Election

Let’s take a look now at the overall picture that is unfolding for the 2016 presidential election.

By the Numbers

In November of 2016 the United States will elect a new President. It is estimated that approximately 207,643,594 voters will show up at the polls and cast their ballots. Approximately 55 million will be Republicans, 72 million will be Democrats, and 42 million will be Independents who’ll split the vote.

Whoever the Democrat’s choice to run for president in 2016, it is evident that person is going to become our next President.

The reasons are fivefold: (1) the Republicans are once again out of favor with the American electorate, (2) most Americans blame Republicans for the gridlock in Washington D.C., (3) most young Millennial voters look askance at, and do not identify with, the values of conservatives in this new progressive modern era, (4) the Democrats outnumber republicans by 17 million potential voters in a general election, and (5) the powerful AFL/CIO has a block of 12 million voters who will vote for the candidate who policies favor the working man and woman. From the longshoreman to the steel worker, including assembly line automotive workers, this powerful voting group has determined many elections since the beginning of the industrial age. Democrats or Republicans who ignore the needs of these voters do so at their own peril.

Traditionally, labor unions feel more at ease with Democrats than Republicans, the latter of which tend to favor big business and Wall Street over labor unions.

 

Final Comments

A big question looms over the Republican electorate: If the Republicans control the House and the Senate, why didn’t they satisfy Republican voters who sent them to Washington in the first place? It appears the Republican Party tends not to be progressive or forward-looking.

It may very well be that dissatisfaction among Republican voters has been simmering for some time, going back to the mid-term elections of 1994 when they were promised a “Contract with America.” It was proposed by the Republican Party. Once again the result of Contract with America was utter failure. They achieved virtually nothing that was proposed or promised.

President Bill Clinton jokingly said at the time, “the Contract with America was really a Contract on America.”

To this author it is really not surprising that extremist, obstreperous and recalcitrant Tea Party members of Congress, as well as other irresponsible right wing demagogic conservatives, drove an irredeemable ideological wedge between most Republican lawmakers (moderate Republicans versus conservative Republicans) This is the mess the Republican Party finds itself in 2015.

Such a quixotic and largely self-serving approach to governing the people has been, and will continue to be, a political disaster.

One will recall that within days after the 2008 presidential election of Barack Obama, Republicans in Congress wanted to evaluate, not only what went wrong, but the very values of the Republican Party that led to their defeat.

That moment of self-reflection didn’t last long. Within weeks they were picking fights and engaging in congressional bickering, troublemaking with gridlock at every turn. Although some Republican voters approved of the watchdog approach over the Obama administration, most Republicans still expected there was something in it for them, namely legislation that would lower taxes and reduce the national budget and deficit, reduce the size of government and generally get things done. What happened was the Republicans in office forget why they were elected in the first place?

Consequently, most Republican voters today are pissed off at professional politicians in the Republican Party because of prior elected official’s failure to pass legislation helpful to Republican voters. As a result, the silent majority of Republicans may not be so silent anymore.

My original observation is important. Consequently, you’ll notice that on the Republican side, Republican voters are now more interested in outsiders, or those outside of Washington. Specifically, the polls are now showing widespread support for Republican non-professional politicians like Donald Trump, Ben Carson and Carly Fiorina. It should be pointed out that historically being a non-politician running for President of the United States is not all that unusual.

For example, Dwight David Eisenhower did not hold elected public office prior to becoming President. Neither did Zackery Taylor, John Adams or Ulysses S. Grant. Therefore it would not be unprecedented if an outsider running for president in 2016 became president of the United States. But, as the old expression goes “that was then and this is now.”

I made my prediction a while ago. That is, the Republican Party has as much chance of winning the presidency in 2016—as a snowball in hell. With all the Republican in-fighting, and the fact they were primarily blamed for all of the post-2008 gridlock, it’s clear they will fail to regain the White House in 2016.

While I could spend days articulating why Republican values miss the mark because of a modern and ever changing progressive American electorate, one important factor as to how the country will vote—is the factor of favorability. It will likely predict the election outcome in 2016. And, not surprisingly, demographics differentiate specific favorability ratings of the candidates. And, of course, Democrat Party voters outnumber Republican Party voters. Given that blacks and Hispanics and educated whites, along with younger voters do not favor the Republican Party, it’s time Republican voters once again reassess its values and what it means to be a conservative with non-inclusive values in a diverse culture.

All of this said—one factor may trump (no pun intended) the economy as a presidential issue. That is the issue of foreign policy since the horrific attacks in Paris.

On the surface one might think that the Republican hardliners would have an advantage as terrorism gains traction on the international scene. This is a complex issue given the humanitarian concerns of “collateral damage.”

Republican presidential candidate Senator Lindsay Graham has some good ideas about putting together a regional army to destroy ISIS. But his numbers in surveys are still hovering slightly below 1% of the Republican vote. The other Republican candidates, like everything else they do, are all talk and no action. More bluster than anything else.

Remember, the good citizens of this country don’t elect the president—The Electoral College does.

It takes 270 Electoral College votes to win the presidency. There currently are 538 total Electoral College votes (435 House, 100, Senate, and 3 from the District of Columbia). It is important that both political parties work to get out the vote in 2016. State majorities matter except in Maine and Nebraska (congressional district method).

If the Democrat presidential candidate turns out to be Hilary Clinton, she will need to have either retired General Wesley Clark or former Florida Governor Charlie Crist run as her running mate. If she does the ticket will be unbeatable and I predict she will win the presidency in 2016 with 304 Electoral College votes. The Republicans would therefore win only 234 Electoral College votes, and thus lose the 2016 election.

 

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The Tea Party in America:

Political Lunatic Fringe or New Face of the Republican Party?

 

Introduction

Historians will one day write about one of the greatest crises to face the United States Government. That crisis occurred within just a few days ago when the country was on a catastrophic train wreck to oblivion. What happened was this: the government began to go into a tailspin with a partial shutdown of the U.S. government which included a catastrophic threat of financial default and ruin of the country’s credit status. In addition, there was a threat that the nation’s debt limit was not going to be extended beyond October 17, 2013.  This chaos, in turn, would directly prevent the U.S. government from paying its bills and meeting its financial obligations.

The following is an edited version of an Associated Press article:

“Standard & Poor’s estimated the shutdown has taken $24 billion out of the economy, and the Fitch credit rating agency had warned that it was reviewing its AAA rating on U.S. government debt for a possible downgrade.

President Obama and his Democratic allies on Capitol Hill were the decisive victors in the fight, which was sparked by Tea Party Republicans including Sen. Ted Cruz of Texas. They prevailed upon skeptical GOP leaders to use a normally routine short-term funding bill in an attempt to “defund” the 2010 Affordable Health Care Law known as ‘Obama care.’

‘We fought the good fight. We just didn’t win,’ House Speaker John Boehner, R-Ohio, conceded. He was given positive reviews from Republicans for his handling of the crisis, though it again exposed the tenuous grasp he holds over the fractious House GOP conference. Republican Sen. John McCain of Arizona said the American people disapproved of how Republicans, and also Democrats and the president, handled the budget gridlock.

‘Hopefully, the lesson is to stop this foolish childishness,’ McCain said Thursday on CNN. The shutdown sent approval of the GOP plummeting in opinion polls and exasperated veteran lawmakers who saw it as folly. ‘It’s time to restore some sanity to this place,’ House Appropriations Committee Chairman Harold Rogers, R-Ky., said before the vote.’[i]

Who Created the Economic Crisis?

The instigators of this crisis were a minority of congressmen in the House of Representatives representing just one political faction of the Republican Party. This political faction is known as the Tea Party.

Public polls during the crisis overwhelmingly condemned the Republican Party in general for holding the country hostage. But the Tea Party, as instigators, was blamed even more for their reckless, irresponsible, failed and ill-conceived plan, that in15 days into the shutdown had already hurt a million+ people nationwide.

Initially, it was their plan to use the shutdown as a bargaining chip in their desire to force concessions on the Affordable Care Act, and to cut federal spending. And this misguided extremism via extortion was attempted as a strategy in lieu of the normal legislative process. Such a deleterious plan, approved and executed by the Tea Party, gives the distinct impression that Tea Party members are “not-too-bright.”

It’s fair to say that Tea Party ultraconservatives are, as a result of their failure to implement a destructive financial meltdown and default of the United States government, earned the scorn of the American people, but are now the laughing stock of the nation. Because of Tea Party actions, the United States, at the very least, was embarrassed before the international community and our allies.

Now that the dust has settled (at least for a while in Washington D.C.) it’s important to learn more about what the Tea Party is really all about. Are they dangerous individuals who need to be tried for treason? Are they right-wing ideologues representing the values of the most extremist conservative viewpoints giving a great portrayal of a lunatic fringe? Do they actually represent a threat to the American people?

And finally, should people who cavalierly took the nation to the near brink of financial ruin, harming millions of people in their wake, be held accountable and charged with criminal acts and eventually punished accordingly? These questions should now be asked by people in government, the FBI, and the United States Department of Justice.

But first it is important to ask a set of less dire questions to get a correct picture of who these people are, including those currently (but perhaps temporarily) holding office in the House of Representatives. Ultimately, one needs to assess the facts by asking a set of simple questions:

 

  • What is the Tea Party?
  • What do they want?
  • What are their Demographics?
  • What’s Public Opinion of the Tea Party?
  • Who is Funding the Tea Party?

 

What is the Tea Party?

The Tea Party movement is an American decentralized political movement that is primarily known for advocating a reduction in the U.S. National debt and federal budget deficit by reducing U.S. government spending and taxes. The movement has been called partly conservative, partly libertarian, and partly populist. It has sponsored protests and supported political candidates since 2009.

The name is derived from the Boston Tea Party of 1773, an iconic event in American history.  Anti-tax protesters in the United States have often referred to the original Boston Tea Party for inspiration.  References to the Boston Tea Party were part of Tax Day protests held throughout the 1990s and earlier. By 2001, a custom had developed among some conservative activists of mailing tea bags to legislators and other officials as a symbolic act.

 

What do they want?

 

The Tea Party does not have a single uniform agenda. The Tea Party generally focuses on government reform. Among its goals are limiting the size of the federal government, reducing government spending, lowering the national debt and opposing tax increases. To this end, Tea Party groups have protested the Troubled Asset Relief Program (TARP), stimulus programs such as the American Recovery and Reinvestment Act of 2009 (ARRA, commonly referred to as the Stimulus or The Recovery Act), cap and trade, health care reform such as the Patient Protection and Affordable Care Act (PPACA, also known simply as the Affordable Care Act or “Obama care”) and perceived attacks by the federal government on their 1st, 2nd, 4th and 10th Amendment rights.

The decentralized character of the Tea Party, with its lack of formal structure or hierarchy, allows each autonomous group to set its own priorities and goals. Goals may conflict, and priorities will often differ between groups. Many Tea Party organizers see this as strength rather than a weakness, as decentralization has helped to immunize the Tea Party against co-opting by outside entities and corruption from within.

The Tea Party has generally sought to avoid placing too much emphasis on traditional conservative social issues. National Tea Party organizations, such as the Tea Party Patriots and Freedom Works, have expressed concern that engaging in social issues would be divisive. Instead, they have sought to have activists focus their efforts away from social issues and focus on economic and limited government issues. Still, many groups like Glenn Beck’s 9/12 Tea Parties, TeaParty.org, the Iowa Tea Party and Delaware Patriot Organizations do act on social issues such as abortion, gun control, prayer in schools, and illegal immigration.

Tea Party groups have also voiced support for right to work legislation as well as tighter border security, and opposed amnesty for illegal immigrants. After the Republican Party lost seats in Congress and the Presidency in the 2012 elections, they began to work at the state level to nullify the healthcare reform law.

They have also protested the IRS for controversial treatment of groups with “tea party” in their names. They have formed Super Pac’s to support candidates sympathetic to their goals, and have opposed what they call the “Republican establishment” candidates.

Even though the groups have a wide range of goals, the Tea Party places the Constitution at the center of its reform agenda. It urges the return of government as intended by the Founding Fathers.

It also seeks to teach its view of the Constitution and other founding documents. Scholars have described its interpretation variously as originalist, popular, or a unique combination of the two. However, their reliance on the Constitution is selective and inconsistent. Adherents cite it, yet do so more as a cultural reference rather than out of commitment to the text, which they seek to alter.

Several constitutional amendments have been targeted by some in the movement for full or partial repeal, including the 14th, 16th, and 17th. There has also been support for a proposed Repeal Amendment, which would enable a two-thirds majority of the states to repeal federal laws, and a Balanced Budget Amendment, which would limit deficit spending. Had the United States had such an amendment during World War II, the U.S. would have lost that war.

One attempt at forming a list of what Tea Partiers wanted Congress to do was the basis of the Contract from America. It was a legislative agenda created by conservative activist Ryan Hecker with the assistance of Dick Armey of Freedom Works. Armey had co-written the previous Contract with America released by the Republican Party during the 1994 midterm elections.

One thousand agenda ideas that had been submitted were narrowed down to twenty-one non-social issues. Participants then voted in an online campaign in which they were asked to select their favorite policy planks. The results were released as a ten-point Tea Party platform. The Contract from America was met with some support within the Republican Party, but it was not broadly embraced by GOP leadership, which released its own ‘Pledge to America.’

 

What Are Their Demographics?

The vast majority of the Tea Party Caucus comes from the West and the South. Whether by accident or design, the public faces of the Tea Party in the House of Representatives are Midwesterners.

But while there may be Tea Party sympathizers throughout the country in the House of Representatives, the Tea Party faction alone used the debt ceiling issue to plunge the nation into crisis. Overwhelmingly this faction is Southern in its origins.

Sam Stein of the Washington Post wrote an interesting article called: Tea Party Survey: Old, Conservative, Hate Obama, and Like Fox News.

According to Sam Stein:

“The individuals who make up the Tea Party movement are largely conservative and get their news from Fox; they’re generally old and of moderate to low income; and they’re fairly convinced that their taxes are going to rise in the next few years, even though they likely won’t.

Those conclusions are part of a new study put together by The Winston Group, a conservative-leaning polling and strategy firm run by the former director of planning for former Speaker of the House Newt Gingrich. And they provide a telling new window on the political force that has revamped the Republican Party and altered the landscape of the 2010 elections.

In the course of conducting three national surveys of 1,000 registered voters, Winston was able to peg the percentage of the public that identifies itself with the Tea Party at roughly 17 percent. The group pledges that it is independent of any particular party (indeed 28 percent of Tea Party respondents in the Winston survey labeled their affiliation as such). But on pretty much every defining political or demographic issue, the movement lines up with the GOP or conservative alternatives.

Sixty-five percent of Tea Party respondents called themselves ‘conservative’ compared to the 33 percent of all respondents who did the same. Just eight percent of Tea Party respondents said they were ‘liberal.’”

Forty-seven percent of Tea Party respondents said that Fox News was either the top or second source of news they turn to, compared with 19 percent of the overall public who said the same thing.

More than 80 percent (81 percent) of Tea Party respondents expressed very little approval of Barack Obama’s job as President, which exceeded disapproval levels held even by Republicans (77%) and conservatives (79%).

All these data points suggest that the Tea Party crowd is comprised predominantly of conservatives. And, not surprisingly, the demographics of the movement seemingly align with those who traditionally vote for the conservative candidate as well. Fifty-six percent of Tea Party respondents are male; 22 percent are over the age of 65 (compared with just 14 percent who are between the ages of 18 and 34); and 23 percent fall in the income range of $50,000 and $75,000.

In another survey, Tea Party supporters are likely to be older, white and male. Forty percent are age 55 and over, compared with 32 percent of all poll respondents; just 22 percent are under the age of 35, 79 percent are white, and 61 percent are men. Many are also Christian fundamentalists, with 44 percent identifying themselves as “born-again,” compared with 33 percent of all respondents.”

The Tea Party Members in Congress

     Fiery Republicans known as the Tea Party Caucus are at the center of the debate over which version of a plan – if any   – to cut spending and raise the debt limit should be adopted in Congress.These conservatives, many of whom were swept into office during the 2010 midterm elections, have made it their mission to rein in spending and shrink the size of government, even if it meant taking the country to the edge of default.

Here is the full list of the official Tea Party Caucus in the House of Representatives, with the freshman representatives in BOLD:

Sandy Adams (FL-24)
Robert Aderholt (AL-04)
Todd Akin (MO-02)
Rodney Alexander (LA-05)
Michele Bachmann (MN-06)
Roscoe Bartlett (MD-06)
Joe Barton (TX-06)
Rob Bishop (UT-01)
Gus Bilirakis (FL-09)
Diane Black (TN-06)
Paul Broun (GA-10)
Michael Burgess (TX-26)
Dan Burton (IN-05)
John Carter (TX-31)
Bill Cassidy (LA-06)
Howard Coble (NC-06)
Mike Coffman (CO-06)
Ander Crenshaw (FL-04)
John Culberson (TX-07)
Jeff Duncan (SC-03)
Blake Farenthold (TX-27)
Stephen Lee Fincher (TN-08)
John Fleming (LA-04)
Trent Franks (AZ-02)
Phil Gingrey (GA-11)
Louie Gohmert (TX-01)
Vicky Hartzler (MO-04)
Wally Herger (CA-02)
Tim Huelskamp (KS-01)
Lynn Jenkins (KS-02)
Steve King (IA-05)
Doug Lamborn (CO-05)
Jeff Landry (LA-03)
Blaine Luetkemeyer (MO-09)
Kenny Marchant (TX-24)
Tom McClintock (CA-04)
David McKinley (WV-01)
Gary Miller (CA-42)
Mick Mulvaney (SC-05)
Randy Neugebauer (TX-19)
Rich Nugent (FL-05)
Steven Palazzo (MS-04)
Steve Pearce (NM-02)
Mike Pence (IN-06)
Ted Poe (TX-02)
Tom Price (GA-06)
Denny Rehberg (MT-At large)
David Roe (TN-01)
Dennis Ross (FL-12)
Edward Royce (CA-40)
Steve Scalise (LA-01)
Pete Sessions (TX-32)
Adrian Smith (NE-03)
Lamar Smith (TX-21)
Cliff Stearns (FL-06)
Tim Walberg (MI-07)
Joe Walsh (IL-08)
Allen West (FL-22)
Lynn Westmoreland (GA-03)
Joe Wilson (SC-02)

What’s Public Opinion of the Tea Party?

The Tea Party is more unpopular than ever before, according to a Rasmussen poll recently released, with just three in 10 voters holding favorable views of the movement. Half of respondents said they view the party unfavorably. The Rasmussen survey used automated phone calls to survey 1,000 likely voters back in January..

The numbers obtained in the survey represented a considerable dive in support since the Tea Party’s heyday in 2009, when a majority of voters rated it favorably.

Many of the Senate challengers with Tea Party backing were defeated in 2012, and the movement suffered another PR blow after a falling out among the leadership of the Tea Party group, Freedom Works.

Although most members of the House’s Tea Party Caucus were reelected in November, the group had some high-profile losses, including the defeats of former Reps. Joe Walsh and Allen West. Rep. Michele Bachmann (R-Minn.), the chairwoman of the House Tea Party Caucus, barely retained her seat.

The movement is now widely seen by the public as declining, according to the Rasmussen poll — 56 percent of voters said the Tea Party became less influential over the past year, and just 8 percent said they identified as part of the Tea Party movement.

Other polling conducted since the election has found similar results when looking at the Tea Party’s popularity, but with a larger number of people saying they agreed with or were part of the movement. A CNN/ORC poll conducted in November last year found that half of Americans viewed the Tea Party unfavorably, actually a modest improvement from the movement’s standing in late 2011.

A December poll from Politico/GWU found that 21 percent of likely voters identified with or considered themselves part of the Tea Party movement. Polls from CNBC in November both found that about 20 percent of adults were supporters of the movement.

In an article by Carol Forsloff titled, “Tea Party Demographics: White, Republican, Older Male with Money” reported,

“Several polls are now out, assessing the demographics of the Tea Party Movement that largely agree the majority of its members are Republican, largely white, above the mean in age and income and voted for John McCain.

So do Tea Party people reflect the average American as they represent themselves? Not usually if you are a middle-aged woman of Hispanic background, an African-American male or a union member in New England just scraping by, according to the polls.”

A conservative blogger examined this analysis of Tea Party members, citing CNN statistics declaring they are predominantly male, more college educated and higher earners than the general population at large, but not necessarily older or just from the South. A progressive blogger on ThinkProgress looked at the CNN statistics and relayed the same information as the conservative fellow, stating the following:

“Turns out that the ‘tea party’ movement sweeping the nation is disproportionately composed of individuals who have higher-than-average incomes. It’s also disproportionately composed of men. And disproportionately composed of white people. And disproportionately composed of self-identified conservatives. And disproportionately composed of self-identified Republicans.

In other words, well-to-do conservative white men don’t much care for Barack Obama’s policies. Which, of course, is something we already knew from the exit polls back in November 2008.”

Who is Funding the Tea Party?

In an August 30, 2010, article in The New Yorker, Jane Mayer said that the billionaire brothers David H. Koch and Charles G. Koch and Koch Industries are providing financial and organizational support to the Tea Party movement through Americans for Prosperity, which David founded. The AFP’s “Hot Air Tour” was organized to fight against taxes on carbon use and the activation of a cap and trade program.

In 1984, David Koch also founded Citizens for a Sound Economy, part of which became Freedom Works in a 2004 split, another group that organized and supports the movement.

Koch Industries issued a press release stating that the Kochs have “no ties to and have never given money to Freedom Works”. Former ambassador Christopher Meyer wrote in the Daily Mail that the Tea Party movement is a mix of “grassroots populism, professional conservative politics, and big money”, the last supplied in part by the Kochs. Mayer says that the Koch brothers’ political involvement with the Tea Party has been so secretive that she labels it “covert”.

Post Script

     Many organizations in society, including political organizations, engage in what is called sub-optimizing behavior. That’s when stated goals are not the real goals; they are simply stated goals.

The real goals of organizations, political groups, or individuals are often hidden and not stated publicly. Words from politicians often disguise their real motives. Beliefs and values dominate all our lives. And the Tea Party is no exception, especially when backed by Big Business and the Billionaire Koch Brothers and Koch Industries.

Based on the behavior of Tea Party members in Congress, my assumption these last few weeks is that the Tea Party in America is a lunatic fringe and is the new face of the Republican Party.

     Currently only 8% of Americans identify themselves as Tea Party members. And, it appears the Tea Party in Congress has a stranglehold on other Republicans. It’s okay for people to cling to their values and beliefs. But when such values and beliefs threaten the United States with financial disaster and ruin, then it’s time for other stronger forces to counter such attacks on the integrity of the United States and its people.

     As much as I’d like to see it, it’s unlikely these congressional reprobates will ever be tried for treason or brought up on criminal charges by the U.S. Department of Justice. The best thing the people can do is toss the Tea Party members out of Congress in the next election. Another option is to petition their immediate recall from office.

  

The Ongoing Problem of Gridlock     

The vast majority of Americans are moderate “Middle-of-the-Road” Independents, Democrats and Republicans. When one has different values from their fellow citizens, it naturally creates tension, suspicion, distrust, and polarization. Since 2008 we’ve witnessed the worst of these political differences acting out as irreconcilable gridlock when it comes to carrying out the various duties of the government (passing a budget on time, passing legislation to help our citizens, properly defending the country, etc.). For several years now gridlock  has created and prevented very little from being accomplished.

          Politics has always been called, “the Art of Compromise.” This is an old saying that no longer appears applicable in modern day politics.

The primary function of politicians should be to honestly represent their constituency. But at the same time politicians need to make prudent, critical choices in the handling of scarce resources (taxpayer dollars). That latter function is an awesome responsibility that needs careful attention to detail. But the overriding responsibility of those in Congress today should be to help their fellow citizens live better, more prosperous lives.

Unfortunately, the legacy of conservatism or radical conservatism has never aligned itself with helping people. During the last 160 years, conservatives were opposed to the abolition of slavery, fought against giving women the right to vote, fought against integration, desegregation and later busing, opposed the New Deal during the Depression of the 1930s, opposed the Social Security Act in 1935 and later, minimum wage laws. They were a major voice against the Civil Rights Movement of the 1960s, and were responsible for promoting racism and Jim Crow, particularly in the old South. During the 1970s conservatives also opposed affirmative action.

In more recent years, conservatives have opposed amnesty for illegal aliens. They also want to cut entitlement programs like Social Security and Medicare, and now their strident attitude is to oppose the President’s Affordable Care Act that promotes universal healthcare. One way of characterizing all this political history is that, if legislation was going to help a lot people and improve their lives, conservatives were “hell-bent” to oppose it.

At this point in history the Tea Party has been at the center of Washington’s gridlock. The only real option for Americans in the 2014 and 2016 national elections is to terminate Tea Party conservatives and most Republicans from holding office in the United States Congress.

This doesn’t mean that creating jobs, cutting spending or raising or lowering taxes aren’t important issues; they certainly are. But Tea Party members who take a simplistic ideological viewpoint of how the economy works lack insight into the complexities of the economy and its business cycles.

     Just remember these statistics from my last Blog:

“Since Democrat John F. Kennedy took office in January 1961, non-government payrolls in the U.S. swelled by almost 42 million jobs under Democrats, compared with 24 million for Republican presidents, according to Labor Department figures. Democrats hold the edge though they occupied the Oval Office for 23 years since Kennedy’s inauguration, compared with 28 for the Republicans. In addition, over the past 50 years, Republican administrations oversaw the largest decline in wages as measured as a percentage of the U.S. Gross Domestic Product (GDP).

If you really care about data and facts (not just value judgments), then it should be very clear to you who to vote for during the 2014 and 2016 elections.”


1 Associated Press Writers:  Alan Fram, Jessica Gresko, and Connie Cass. “Government open again, Obama bemoans Damage”, October 17, 2013

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Under the Microscope: Understanding Economics and the Unemployment Rate   

“She Sat like Patience on a Monument, Smiling at Grief.”

Twelfth Night, William Shakespeare

Introduction

     The unemployment rate is but one factor or variable in our economy. There are many others including:

  • Inflation
  •  consumer aggregate demand for goods and services
  •  governmental fiscal policy (spending and taxes)
  •  monetary policy (policies around the expansion or contraction of the money supply)
  •  private sector business practices including business contraction or expansion
  •  population expansion or contraction
  •  different industries
  •  technological development
  •  national and global politics
  •  Entrepreneurship
  •  skill sets and educational level of Americans today.

Then there is one important “juice of the economy” that affects everyone, and is known as Credit Availability. All these factors or variables affect each other to one degree or another.

A Sense of Bewilderment and Frustration

     Understanding the unemployment rate has never been a simple task. Complex interactive variables and a constantly changing economy sometimes seem to conspire to give the public a sense of bewilderment when trying to understand or figure out what is going on. It’s sad and disappointing when your close friends and/or family members just can’t seem to find a job. The Unemployment Rate is more than a statistic; it’s about real people, their lives, and their livelihood.

This bewilderment and frustration does cause anger creating a kind of collective social consciousness where everybody agrees on only one thing, namely: Let’s point a finger and play the “Blame Game.”

People want to blame the Congress, the President, or Democrats and Republicans in general, the Federal Reserve or its chairman, or the global economy when jobs are viewed as leaving the United States.

Economists aren’t too helpful sometimes because they cannot always agree on what is the best course of action for creating jobs or achieving full employment in the United States. Others prefer to blame labor unions, illegal immigration, Wall Street, or big business and/or small business.

As a blogger I can’t extricate the public from their frustrations, lack of knowledge, or prejudices.  However, one way I can help is to provide a more factual and theoretical basis for understanding what unemployment really is, and how it fits within the overall framework of what we call the economy. Under the microscope, here is some background which should help with understanding the economy.

Background

       Generally, astute observers might suggest that the problem of unemployment is somehow tied to the economy or business cycles such as (Expansion and Growth, Prosperity, Recession [or contraction], and finally Recovery). Other economists prefer the following descriptive terms: (Prosperity, Recession, Depression, and Recovery). The guy on the street might suggest that our economy simply involves only three cycles (The Good, The Bad, and the Ugly). All of this will become clearer later in this Blog.

Economic cycles, however described, do account for the lion’s share of the explanation of how the economy works, including how the Unemployment Rate fits in. Economic forces seem to have a life of their own. Nevertheless, other forces besides economic cycles are important.

The other explanation for the economy and unemployment rate relates to politics and government actions to deal with the economy and unemployment.

Current Economic Environment

     In the current economy the country does seem to be in a very long recovery cycle. Although business cycles always occur in the same order, the length of each cycle cannot easily be predicted.

Since much unemployment or underemployment occurs among the poor and the working poor, some people feel the replacement of lower skilled jobs with better technology and more jobs requiring higher skill sets has left the poor and working poor holding the bag. However, given that almost every profession experiences unemployment during a recession (engineers, scientists, teachers, highly skilled technicians, etc.) a reasonable person might conclude that unemployment affects everyone, not just the poor and the working poor.

Other targets for blame include: the rich and wealthy in society, poor planning of the job-seeker himself, and finally—the consumer for not spending enough money that would support and stimulate business. When business suffers as consumer demand ebbs, it creates the conditions that allows  a higher than normal unemployment rate.

How best can one unravel the various complexities of understanding the economy and begin to shed light on the unemployment rate? In an ideal world we all want full employment for our citizens. Unfortunately, no society ever lives in an ideal world.

     So what is the best course to understanding the complexities of the economy and the unemployment rate?

In a cosmic sense every variable affects every other variable to some degree. But in a down-to-earth way we have to remember the famous words of Jack Webb’s character Joe Friday in the hugely popular television series, Dragnet. “Just give me the facts, mame!”So, what are the facts?

     First we need to start with a few facts on the unemployment rate in America followed by an explanation of the various phases of the business cycle.

 

Unemployment Rate Data

 

The Unemployment Rate in the United States (January and December 2003-2013)

 

                               January                 December

2003                            5.8                            5.7

2004                            5.7                            5.4

2005                            5.3                            4.9

2006                            4.7                            4.4

2007                            4.6                            5.0

2008                            5.0                            7.3

2009                            7.8                            9.9

2010                            9.8                            9.3

2011                            9.1                            8.5

2012                            8.3                            7.8

2013                            7.9*

*As of August 2013 the unemployment rate in the United States was 7.3%, a level not seen since December, 2008. It went from a high of 9.9% in December 2009 to a low of 7.3% in August, 2013. This 2.6% drop in the unemployment rate occurred during the administration of President Barack Obama, who said “Yes We Can” while Republicans blamed him for the high unemployment. This was despite the fact they created the conditions that caused the unemployment rate to jump from 5.0% to 7.3% during the catastrophic economic collapse of 2008 which occurred during the last year of the Bush Administration.

Definitions and Concepts

    

 

Unemployment

 

There are four types of unemployment:

 

Structural Unemployment

     Structural unemployment is caused by the types of production and laws of an economy that govern whose skills are valuable in the marketplace.

Frictional Unemployment

     Frictional unemployment is associated with changing jobs, often because workers are searching for better opportunities or moving to new locations.

Cyclical Unemployment

     Cyclical unemployment is caused by changes in real GDP that are associated with the business cycle.

Seasonal Unemployment

     Lastly, seasonal unemployment is caused by changes in employment associated with changes in the seasons.

 

The Basic Business Cycle

The four phases of a business cycle are briefly explained as follows:

1. Prosperity Phase

When there is an expansion of output, income, employment, prices and profits, there is also a rise in the standard of living. This period is termed as Prosperity phase.

The features of prosperity are:

  1. High level of output and trade.
  2. High level of effective demand.
  3. High level of income and employment.
  4. Rising interest rates.
  5. Inflation.
  6. Large expansion of bank credit.
  7. Overall business optimism.
  8. A high level of MEC (Marginal efficiency of capital) and investment.

Due to full employment of resources, the level of production is Maximum and there is a rise in GNP (Gross National Product). Due to a high level of economic activity (buying and selling goods and services), it causes a rise in prices and profits. There is an upswing in the economic activity and economy reaches its Peak. This is also called as a Boom Period.

2. Recession Phase

The turning point from prosperity to depression is termed as the Recession Phase.

During a recession period, economic activities slow down. When demand starts falling, the overproduction and future investment plans are also given up. There is a steady decline in the output, income, employment, prices and profits.

The businessmen lose confidence and become pessimistic (Negative). It reduces investment. The banks and the people try to get greater liquidity, so credit also contracts. Expansion of business stops, stock market falls. Orders are cancelled and people start losing their jobs. An increase in unemployment occurs with or following a sharp decline in income and aggregate demand. Generally, recession lasts for a short period.

Many people talk about a “mild recession” and even “severe recession.” These are all matters of degree and economists can endlessly debate which is which. However, almost no one wants to consider or talk about the more devastating type of decline called a Depression.

3. Depression Phase

When there is a continuous decrease of output, income, employment, prices and profits, there is a fall in the standard of living and depression sets in.

The features of depression are:

  1. Fall in volume of output and trade.
  2. Fall in income and rise in unemployment.
  3. Decline in consumption and demand.
  4. Fall in interest rate.
  5. Deflation.
  6. Contraction of bank credit.
  7. Overall business pessimism.
  8. Fall in MEC (Marginal efficiency of capital) and investment.

In depression, there is under-utilization of resources and fall in GNP (Gross National Product). The aggregate economic activity is at the lowest, causing a decline in prices and profits until the economy reaches its Trough (low point).

4. Recovery Phase

The turning point from depression to expansion is termed as Recovery or Revival Phase.

During the period of revival or recovery, there are expansions and rise in economic activities. When demand starts rising (many economists assert that consumers are the driving force of any economy), production increases and this causes an increase in investment. There is a steady rise in output, income, employment, prices and profits. The businessmen gain confidence and become optimistic (Positive). This further increases investments.

The stimulation of investment brings about the revival or recovery of the economy. The banks expand credit, business expansion takes place and stock markets are activated. There is an increase in employment, production, income and aggregate demand, prices and profits start rising, and business expands. Revival slowly emerges into prosperity, and the business cycle is repeated.

Thus we see that, during the expansionary or prosperity phase, there is inflation and during the contraction or depression phase, there is deflation.

Economics and Employment in a Nutshell

     As our population increases there is more consumer demand. And, there are those that say that the driving force behind any economy is the consumer. This aggregate demand for goods and services causes businesses to have to keep up with consumer demand. Business does this by expanding or creating more products (inventory) and needed services.

This creates more money for businesses through profits and may require credit and acquiring loans to expand a business as well. In turn, business must hire more people.

Hiring people involves more money for salaries, insurance, office space, vehicles, etc. But here is the rub: In order for business to pay for all this expansion, they must raise the prices on goods and services. This, as everyone knows, is Inflation.

 As prices go higher consumer demand begins to lessen, and people get laid off when consumer demand begins to really tank. The sad truth is—as prices come down (deflation), the unemployment rate goes up. When the economy heats up again, then the expansionary business cycle causes businesses to once again hire more people. Near full employment (not real full employment) is achieved during the economic cycle known as “Prosperity.” The variability one finds in the unemployment rate is a direct result collectively of the four business cycles, and political factors as well.       

Political Influences on the Economy

     In the final analysis, a high unemployment rate is due to both political factors and the recessionary/depression economic business cycles. Economic business cycles are inevitable, but very difficult to predict how long each cycle will last. However, political factors make their own contribution to a high unemployment rate. And, everyone should be aware,  the order of economic cycles cannot be altered. Although timing of economic cycles can’t be predicted, they can be influenced by political factors. Such timing is heavily influenced by which political party dominates fiscal and monetary policies. These policies can be narrowed down to party-related tax policies, spending policies, monetary policies, and policies dealing with the availability of credit. All of these factors affect the unemployment rate.

Explanations for all these governmental actions can be found in a seven part series I blogged called, “Election Year Politics and the Economy,” back in 2012.

The Current Political Environment

     One question the public needs to think about is whether Republicans or democrats are better at tinkering with the economy and the unemployment problem?

At the present time that question is difficult to answer because the U.S. Government is in a state of crisis where efforts to help the unemployed or improve the economy have taken a back seat to politics and the shutting down of the government.

A hand full of Republican Tea Party members in Congress wanted and decided to hold the American people, and its government, hostage. It was a strategy created in lieu of the normal legislative process. As a result this caused a government shutdown. They did so primarily over just one issue—The Affordable Care Act. Until the government shutdown is really over, plans and resources to stimulate the economy and lower the unemployment rate—are evidently on hold.

So the public needs to start asking questions of Tea Party members now, long before the public goes to the polls in 2014. They might take this approach. Like Inspector Harry Callahan (played by Clint Eastwood) in the 1971 movie Dirty Harry, they might ask Tea Party members something like this: “So, you have to ask yourself this question. Do you feel lucky? Well, do you punk? The serial killer thought he was lucky. He reached for his gun and Inspector Harry Callahan blew him away.

Tea Party members, like Dirty Harry’s serial killer, may think they just might get lucky by holding the country hostage. Unfortunately, with recalcitrant Tea Party members controlling The House of Representative like domestic terrorists, they just might succeed. Polls indicate the Republican Party is going to get the most blame for the failed ill-conceived strategy to shut down the government and government services. The country is really pissed over the government shutdown!

Metaphorically speaking, the public after having been raped in 2013 by Tea Party members is going to get the last word, and perhaps poetic justice and revenge. It is my fondest hope that during the upcoming 2014 elections, the public, like the Terminator or Dirty Harry, is going to end the political careers of all Tea Party members who shouldn’t have been elected to Congress in the first place. However, the public has a very short memory. So, we’ll see what happens in 2014.

But a bigger question remains. How should sensible moderate Republicans or Democrats in general be viewed as to their ability to help improve the economy or help to lower the unemployment rate via job creation? In the upcoming congressional and senatorial elections in 2014 how should you vote if unemployment and a thriving economy is your uppermost concern?

To understand and answer the question, one needs only to look at past behavior of either political party. Again, who best can tinker effectively with the economy and the unemployment problem, Democrats or Republicans?

 

The Answer

     Since Democrat John F. Kennedy took office in January 1961, non-government payrolls in the U.S. swelled by almost 42 million jobs under Democrats, compared with 24 million for Republican presidents, according to Labor Department figures. Democrats hold the edge though they occupied the Oval Office for 23 years since Kennedy’s inauguration, compared with 28 for the Republicans. In addition, over the past 50 years, Republican administrations oversaw the largest decline in wages as measured as a percentage of the U.S. Gross Domestic Product (GDP).

If you really care about data and facts (not just value judgments), then it should be very clear to you who to vote for during the 2014 and 2016 elections.

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Purpose of Blog

As the government goes about the business of dealing with the the Fiscal Cliff, one of the most controversial issues it will have to address is raising taxes on our wealthier citizens. Value judgments work their way into the decision-making process because everyone, democrats, republicans, and independents, all have different ideas about what constitutes “Fairness, and Fairness for Whom?”

But one thing that can help extricate decision-makers from their own prejudices and value judgments, is to shed light on the issue with data and facts. I would be naïve to suggest that this is going to be an easy process. It will take their best effort and require everyone involved to put aside their political biases. The purpose of this Blog is the answer with data and facts the following question on the revenue generating side of their deliberations:

What is the Effect on the Economy if the Wealthy Are Taxed at Higher Rates?

With the 2012 presidential election over, it is important now to review facts as President Obama and the Congress come to grips with an important issue now looming over the nation. That issue has been metaphorically described as a fiscal cliff.

What is the Fiscal Cliff?

I love the way we use metaphors in this country to describe every social or economic problem. There once was a “War on Poverty,” “The Missles of October” that was better known as the Cuban Missle Crisis (Gee! I thought it was an American crisis as well) and now we have a “Fiscal Cliff” where all our money is going to drop over the edge of a great chasm like the Grand Canyon. The latter, like all the previous metaphors, conjures up graphic images in order to convey a very important message: Whatever the crisis is or gap between people, whatever the details are, the American people need to take the “Fiscal Cliff” seriously because the consequences are important to the nation’s financial health, and may be longlasting.

So personally, I get the message and I know it’s serious. Hopefully, my fellow Americans will take the underlying metaphorical graphic image such as a “Fiscal cliff” seriously as well.

Basically, the Fiscal Cliff is a popular way to describe the confusing, difficult riddle or puzzle the U.S. government will face at the end of 2012, when the terms of the Budget Control Act of 2011 are scheduled to go into effect.

Laws will be affected when the gong hits midnight on December 31, 2012, including last year’s temporary payroll tax cuts (resulting in a 2% tax increase for workers), the end of certain tax breaks for businesses, shifts in the alternative minimum tax that would take a larger bite, the end of the tax cuts from 2001-2003, and the beginning of taxes related to President Obama’s health care law.

At the same time, the spending cuts agreed upon as part of the debt ceiling deal of 2011 will begin to go into effect. According to Barron’s, over 1,000 government programs – including the defense budget and Medicare are in line for “deep, automatic cuts.”

According to author Thomas Kenny, writing for About.com Guide, “In dealing with the fiscal cliff, U.S. lawmakers have a choice among three options, none of which are particularly attractive:

They can let the current policy scheduled for the beginning of 2013 – which features a number of tax increases and spending cuts that are expected to weigh heavily on growth and possibly drive the economy back into a recession – go into effect. The plus side: the deficit, as a percentage of GDP, would be cut in half.

They can cancel some or all of the scheduled tax increases and spending cuts, which would add to the deficit and increase the odds that the United States could face a crisis similar to that which is occurring in Europe. The flip side of this, of course, is that the United States’ debt will continue to grow.

They could take a middle course, opting for an approach that would address the budget issues to a limited extent, but that would have a more modest impact on growth.”

There are really only three things the U.S. Government can do to solve the problem of the Fiscal Cliff: Raise Taxes, Cut Spending, or both.

Fiscal Policy involves two major components: Taxes and Spending. While Monetary Policy is very important to the economy under the control of the Federal Reserve Board, my best guess at this point (as we get closer to the December 31, 2012 deadline) is that most of the compromises to be reached will be worked out between the President and Congress will mostly involve taxes and spending cuts.

The Issue of Higher Tax Rates for the Wealthy

President Barack Obama, of course, won re-election and, in a sense, is in the driver’s seat politically. The cornerstone of the President’s campaign in 2012 was to protect the middle class and require (on the tax revenue side) higher income households to pay more in taxes. Nevertheless, now is the time for a factual assessment of this issue.

According to author Chye-Ching Huang:

“Many policymakers and pundits assume that raising federal income taxes on high-income households would have serious adverse consequences for the economy. Yet this belief, which has been subject to extensive research and analysis, does not fare well under scrutiny. As three leading tax economists recently concluded in a comprehensive review of the empirical evidence, ‘there is no compelling evidence to date of real responses of upper income taxpayers to changes in tax rates.’ The literature suggests that if the alternative to raising taxes is larger deficits, then modest tax increases on high-income households would likely be more beneficial for the economy over the long run.

The debate over the economic effects of higher taxes on people with high incomes has focused on a number of issues — how increasing taxes at the top would affect taxable income and revenue as well as the effects on work and labor supply, saving and investment, small businesses, entrepreneurship, and, ultimately, economic growth and jobs.”

Economic Growth and Jobs

I found during the presidential campaign many people on both sides had something to say about job creation. All of the topics above can be found in Huang’s full report referenced at the end of this Blog. However, I want to share with you the relationship between taxing the wealthy and job creation, since it too is critically important.

History shows that higher taxes are compatible with economic growth and job creation: job creation and GDP growth were significantly stronger following the Clinton tax increases than following the Bush tax cuts. Further, the Congressional Budget Office (CBO) concludes that letting the Bush-era tax cuts expire on schedule would strengthen long-term economic growth, on balance, if policymakers used the revenue saved to reduce deficits.

In other words, any negative impact on economic growth from increasing taxes on high-income people would be more than offset by the positive effects of using the resulting revenue gain to reduce the budget deficit. I venture to say that Wall Street’s reaction  would be very positive if a major dent were to occur in our national debt. Risk/Reward ratios would favor the Bulls (“and you can take that to the bank”).

In addition, tax increases can also be used to fund, or to forestall cuts in, productive public investments in areas that support growth such as public education, basic research, and infrastructure.

Summary

According to Huang, “These findings from the research literature stand in contrast to assertions of extensive economic damage from increases in tax rates on high-income households, which are repeated so often that many policymakers, journalists, and ordinary citizens may simply assume they are solid and well-established. They are not.

These issues are of considerable importance, because sustainable deficit reduction is not likely to be possible without significant revenue increases. Unsupported claims that modest rate increases for high-income people would significantly impair growth ought not stand in the way of balanced deficit-reduction strategies that ask such individuals to share in the burden and pay somewhat more in taxes.

Raising revenues by broadening the tax base can in fact improve the efficiency of the tax code. And, because a cleaner tax code offers fewer opportunities to evade taxes, base broadening can reduce the economic cost of any rate increases also needed to achieve fiscal sustainability.

The research in the field does not provide strong evidence that modestly raising tax rates at the top of the income scale would have significant growth-reducing effects on labor supply, taxable income, savings and investment, or entrepreneurship. Moreover, as Professor Joel Slemrod has emphasized, the economic impact of tax increases depends in part on how the revenue raised is used. In the current fiscal and political environment, policymakers would likely use revenue raised by increasing marginal tax rates for high-income taxpayers to reduce deficits, which likely would have positive overall effects on long-term economic growth.

The nation faces a daunting fiscal challenge, as well as historically large income inequality and increased spending needs stemming from the graying of the population and advances in medicine that improve health but add to cost. These challenges mean that revenues, as well as spending cuts, need to make a significant contribution to deficit reduction.”

Post Script

As a political moderate, I have never been a big fan of class warfare discrimination, or any kind of discrimination for that matter. This is why it is so important to bring in facts, not just one’s value judgments. Even in “The Reasoned Society” separating facts from value judgments, in one’s own reasoning ability, can at times be a slippery-slope. The wealthy in America do in fact contribute disproportionately (as a percent and in gross dollar amounts) more money to charity than do lower-and-middle class individuals. The wealthy are to be applauded and respected for that kind of giving. Being wealthy, of course, does put one in a rather unique position to help others—and that is a good thing for society.

Nevertheless, quite clearly, the data have shown that our tax laws have disproportionately favored high-income taxpayers for decades over low and middle income citizens. Fairness as a concept is a two way street where income or tax equality is concerned. Many lower and middle class individuals often use sterotypical thinking to villify and demonize wealthy individuals to the point of appearing to be “Not Too Bright.” Nevertheless, the research data presented by Huang clearly and strongly sugggest that raising marginal tax rates on high-income individuals to help pay down our national deficit, and put our economic house in order, is both reasonable and fair.

Also, evidence shows that taxing wealthier individuals will have a positive effect on increasing GDP and job creation, what everyone, on both sides of the aisle, said was so important during the 2012 presidential election campaign.

________________________________________________________________________

The information for this Blog comes from two sources, Thomas Kenny who wrote an article in About.com Guide called The Fiscal Cliff Explained, and Chye-Ching Huang who wrote an article for the Center for Budget and Policy Priorities that answers the primary question raised in this Blog. The title of her article was Recent Studies Find Raising Taxes on High-Income Households Would Not Harm the Economy —Policy Should Be Included in Balanced Deficit-Reduction Effort. I was impressed by the clarity of writing by both these authors.

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ELECTION YEAR POLITICS

AND THE ECONOMY

 

[Part VI-B]

 

 

Background

This is the last of my six part series on Election Year Politics and the Economy. And, as most people know, the number one issue during this presidential run for the White House in November, 2012 is the economy.

Before I reveal who I am voting for (if you haven’t already figured it out) I’ll make a few comments on the economy itself, especially since I provided a lot of information related to it.

First, I have tried to drive home the point that the economy has a life of its own and has predictable cycles. They are: expansion, prosperity, contraction, and recession. They always occur in that order; what isn’t known is just how long each cycle will last. And, the only tools the government has to deal with the economy, regardless of which party is in office, is Fiscal Policy having to do with spending and taxes, and Monetary Policy (which is set by the Federal Reserve) having to do with controlling the amount of money (including interest rates and credit) in the economy at any one time.

I think it’s fair to say that the last four years of the previous Bush administration was rather complicated and chaotic, particularly with respect to fiscal policy. Following Keynesian economic theory, Bush lowered taxes to stimulate growth but that also added to our national debt by lessening revenues to cover other spending needs. But with two wars initiated by his administration, he also increased huge amounts of spending (like floating a big check my late father would have said) at the same time, thus once again adding to our national debt. Being the “compassionate conservative” that he is (and I take him at his word) he did pass legislation to increase more Medicare Prescription Drug Benefits. A wonderful thing to do—but it nevertheless added another $300 billion dollars to our national debt.

During the last two years of the George W. Bush administration (2007-2008) all of us watched the development of the most severe financial crisis and meltdown in United States history since the great depression.

The financial crisis was triggered by a complex interplay of valuation and liquidity problems in the United States banking system in 2008. The bursting of the U.S. housing bubble, which peaked in 2007, caused the values of securities tied to U.S. real estate pricing to plummet, damaging financial institutions globally. Questions regarding bank solvency, declines in credit availability and damaged investor confidence had an impact on global stock markets, where securities suffered large losses during 2008 and early 2009. Economies worldwide slowed during this period, as credit tightened and international trade declined. Governments and central banks responded with unprecedented fiscal stimulus, monetary policy expansion and institutional bailouts. Although there have been aftershocks, the financial crisis itself ended sometime between late-2008 and mid-2009.

In the U.S. the government responded by a stimulus package and avoided a double-dip recession. In the E.U. the U.K. responded with austerity measures and it has since slid into a double-dip recession. Although the Bush Administration left us with tremendous national debt, the administration did not cause the financial meltdown per se (unless you want to speculate about errors of omission). The major players in the financial meltdown in the United States were Wall Street and the Banks.

President Barack Obama did not create any of the above situations—he inherited them on January 20, 2009. Through his leadership the financial crisis was averted and turned the corner into the next economic cycle—expansion. Yet, there was an enduring residual problem created by the financial crisis. That problem turned out to be a rather stubborn unemployment rate. The unemployment rate represents the civilian work force, 16 years of age and older.

Lingering Unemployment Problem

Just before the financial meltdown, the unemployment rate was 4.6 % in 2007, but climbed to 9.3% in 2009, then reached a high of 9.6% in 2010. Then the President’s stimulus package and fiscal policies began to kick in. However, even the president increased our national debt during his time in office trying to meet a multiplicity of needs and concerns. But once his stimulus package kicked in the unemployment rate began to drop significantly to where it is now at 8.2%. As our expansion cycle begins to come into full view in the months ahead, the unemployment rate will decline even further.

But please remember—as we achieve the desirable goal of near full employment—there is an inescapable trade-off. And that trade-off is inflation and higher prices. One way you can be certain that the current administration is succeeding in lowering unemployment, is that you know the demand for good and services are increasing. Why? Because increases in employed people mean that consumer spending will likely increase causing businesses of all types to expand.

What happens when there is increased demand? You guessed it—inflation and prices increase. It’s no secret we are now paying higher prices for commodities like food and gasoline. I happen to shop at Raleys. I like the store but I’ve definitely noticed my vegan food choices from the health section have slowly crept up in price the last year and a half. And, I don’t need to remind you that gas prices are very high. In my neighborhood it is currently $4.29 a gallon.

 

Three Factors Needing Evaluation

It is important to know how the economy works. I considered the need for casting an informed vote in Part I; at a minimum, the following information should be recognized and reflected upon:

Knowledge of the Presidential Election Cycle Theory

Business cycles

Fiscal and Monetary policy

Basic Keynesian Economic Theory

Knowledge of our National Debt

Collectively, such knowledge will allow one to make a sensible judgment in any election. For me, this knowledge, combined with my own values, will help determine my vote. Consequently, I’ve used the combination of knowledge and values to evaluate three areas of concern.

These areas of concern are:      

 

IMPACT OF POLITICAL PARTY   ON WALL STREET

ACCOMPLISHMENTS OF DEMOCRATS VERSUS REPUBLICANS

THE ROAD AHEAD WITH OUR NATIONAL DEBT PROBLEM

Impact of Political Party on Wall Street

 For me this area of concern is very personal. I’ve been trading stocks on Wall Street since I was a young man of 25 in 1968. Today, a greater proportion of the electorate, and others in the population, are investing money in the stock market where they hope, over time, to get a decent return.

I have been a day trader as well as an ordinary investor over the last 44 years. Perhaps it is a selfish motive, but I want whoever is in the White House not to screw things up. No one can predict who might do that. Therefore, I needed to consider how well the stock market did with either a Republican or a Democratic administration. So, I reported in Part II whether it was better to have a Republican administration in the White House, or a Democratic one. The following were the findings:

 Although Republicans are generally considered to be more pro business than democrats, studies suggest that when a Democratic president is in the White House, it may be generally better for the stock market.

A research study called “The Presidential Puzzle: Political Cycles and the Stock Market” (2003) done by Pedro Santa Clara and Rossen Valkanof of the University of California, Los Angeles, demonstrated that the stock market performs better under Democratic presidents.

 Using data from 1927 to 2003, they found that the excess returns have been about 2% for Republican presidents, but 11% for Democratic presidents. Among small cap stocks, the difference is even greater. The bottom 10% of stocks as measured by market cap showed a difference of excess returns of about 22% for Democrats compared to when a Republican held the presidential office.

Furthermore, on average, the stock market volatility during a Republican administration was more pronounced than that during a Democratic administration.

Accomplishments of Democrats versus Republicans

In Part I of the series I said accomplishments should be the primary basis for evaluation. This means comparing the President’s accomplishments while in office to those of the Republican Party during the same time frame. But it also means making one-on-one comparisons between the President and his opponent, Mitt Romney. I make that latter comparison in the final conclusions section. This and the previous section are influenced heavily by my “value judgments.” In the last section I am influenced much more by knowledge of the economy and analysis of our national debt.

Where the President is concerned, there are 234 accomplishments so far during his first term in office according to Florida professor of American Studies Robert P. Watson. But ten of his accomplishments really stood out for me as having great value and importance to the United States. You may feel differently, or value things in a different way, but here is my take and what I found that trumps anything the Republicans (The party of NO) have accomplished either in terms of proposed Legislation, or their ideas during the last four years.

These ten accomplishments of the President include:

  • The new effort to bring the country closer to universal health care through passage of the Affordable Health Care Act, outlawing denial of coverage for pre-existing conditions, and extending coverage of health care for children under parent’s plans, steps toward “Medicare for All;”
  • Saved the auto industry from bankruptcy which included General Motors and Chrysler;
  • Obama persuaded BP to put up $20 billion, a guarantee of compensation for the Gulf Coast residents whose livelihoods were damaged or destroyed by the spill.
  • In 2011 President Barack Obama gave the order for Navy Seals to take out Osama Bin Laden, the principal architect of 911. They were successful and Osama Bin Laden is dead.
  • Pulled troops out of Iraq and began drawing down troops in Afghanistan;
  • Approved the Lily Ledbetter “Equal Pay” for women rule;
  • Ended “Don’t Ask/Don’t Tell” discrimination in the military;
  • Expanded the State Children’s Health Insurance Program (SCHIP) health care for children. This helped to cover 4 million children of lower-income families;
  • Signed an omnibus public lands bill that allowed for 2 million more acres to be declared wilderness. It added 1,000 miles designated for scenic rivers, and added lands for national trails;
  • Pushed through a $789 billion economic stimulus bill that saved or created 3 million jobs and began task of repairing the nation’s infrastructure

.

 

The Road Ahead With Our National Debt Problem

Related to the issue of the general economy, is the problem of our staggering national debt. Most voters react to this issue on an emotional level without fully comprehending what a national debt problem is really all about. In 2012 our national debt looms over everyone in society and has done so through many governmental administrations. I have some suggestions and am confident that the future solution to our national debt is sound; I’m equally confident that many people will balk at “the austere cod liver oil” solution to our national debt.

Analysis

In the United States, national debt is money borrowed by the Federal government. Debt burden is usually measured as a ratio of public debt to gross dpmestic product. Debt as a share of the US economy reached a maximum during Harry Truman’s first presidential term (121.7% of GDP).

Public debt as a percentage of GDP fell rapidly in the post-WWII period, and reached a low in 1973 under President Richard Nixon (23.9%). The debt burden has consistently increased since then, except during the presidencies of Jimmy Carter and Bill Clinton. In recent years sharp increases in deficit spending and Bush’s tax cuts has resulted in larger debt. This has led to heightened concern about the long-term sustainability of the Federal government’s fiscal policies.

So what can be done to get us out of this mess? We did it after World War II. So is it possible to reduce the national debt? The question we need to be asking ourselves is —How did we go from 121.7% of GDP in 1946, then 27 years later achieve a ratio of debt to GDP of 23.9%. The debt burden fell rapidly after the end of World War II because the United States and the rest of the world experienced a post-war economic expansion.

The main reason the country dug its way out a crippling public debt at the end of World War II is that there occurred a huge economic expansion in the country. Millions of men returned home from the war. Many Americans feared that the end of World War II, and the subsequent drop in military spending, might bring back the hard times of the Great Depression.

But instead, pent-up consumer demand fueled exceptionally strong economic growth in the post war period. The automobile industry successfully converted back to producing cars, and new industries such as aviation and electronics grew by leaps and bounds. A housing boom, stimulated in part by easily affordable mortgages for returning members of the military, added to the expansion. The demand for goods and services was absolutely profound. Huge social and business changes began to occur. These changes included the baby boom generation, conversion of manufacturing of war material back to high demand useful products of every kind. Also, there was a revolution in new business concepts like large shopping malls (early 1950s).

There were also great cultural changes in entertainment and music, changes in clothes, and that wonderful new babysitter—the television set. Conservatism wasn’t dead, but the nails to its casket were being pounded in every day by a changing much more liberal society. Change wasn’t just economic; WWII changed us as a people as to how we viewed the world in the post-war era. Consequently, all these changes led to a boom in suburban development, urban sprawl, and the need to own an automobile.

The nation’s gross national product rose from about $200,000 million in 1940 to $300,000 million in 1950 and to more than $500,000 million in 1960. At the same time, the jump in postwar births, known as the “baby boom,” increased the number of consumers. More and more Americans joined the middle class. What lessons can we all learn from this? I’ll explain shortly.

Current Debt History

The national debt reached or exceeded 100 percent of GDP only twice since 1900. The first time was during World War II and the second time was in the aftermath of the Crash of 2008.

From 2000 to 2008 debt held by the public rose again from 35% to 40%, and to 62% by the end of fiscal year 2010. During the presidency of George W. Bush, the gross public debt increased from $5.7 trillion in January 2001 to $10.7 trillion by December 2008, due in part to the Bush tax cuts and increased military spending caused by the two wars in the Middle East. He also bailed out the banks in the crisis of 2008.

Under President Barack Obama, the national debt also increased from $10.7 trillion in 2008 to $15.5 trillion by February 2012, caused mainly by decreased tax revenue due to the late-2000s recession and stimulus spending.

However, this President recognized the problem and put into effect a plan of action to deal with the national debt. The President set a goal of reducing Federal deficits by $4 trillion over the next 12 years. He called on Congress to establish a mechanism that would trigger across-the-board spending cuts in 2014 if the nation’s debt as a share of gross domestic product hasn’t stabilized. He even proposed to cut spending on Medicare and Medicaid, two safety-net programs held near and dear by Democrats. While I applaud this effort, it’s obvious $4 trillion dollars deficit reduction is not the same thing as bringing 15.5 trillion dollars back down to zero debt.

 

Proposed Solution

 

If we did it once the country can do it again.

Let’s say for the sake of argument that the United States ought to bring down its deficit from 100% of GDP (that it currently is) to a more comfortable level of 40% of GDP, or be even more ambitious and drop it to 23.9% as it was at the end of Richard Nixon’s  term in office. Nixon left in 1974 but I’m referring to the actual end of his elected term in office.

Our goal should be somewhere between 3.7 trillion and 6.2 trillion dollars of national debt. Let’s further say that the President and the U.S. Congress woke up one morning to its collective senses and said “Let’s Do It.” In fact, how should they do it? How did the Federal government tackle the national debt problem in 1946, at the end of WWII?

All of this comes back to what was covered in Parts II and IV on Fiscal Policy and Monetary Policy. Now our President has made a good faith effort to deal with the national debt. His plan is thoughtful in terms of considering the nation’s future and current needs; but at the same time, he developed a strategic approach to trimming the national debt.

Fiscal Policy and Monetary Policy are still the answer but what is the real question? Can we repeat the events following World War II? No! Those events aren’t going to repeat themselves because the social conditions affecting the country at that time would not be the same now.

So the point is how does the country stimulate massive growth and produce the revenues necessary to pay off, stabilize, and put a cap on, our national debt? This question brings us back to creating new economic events that stimulate expansive growth and rely once again on—Keynesian Economic Theory. The following material was covered in Part II of this series but I repeat it here.

The government began to use fiscal policy in the 1930s during the Depression, not just to support itself or pursue social policies, but to promote overall economic growth and stability as well. Most importantly policy-makers were influenced by John Maynard Keynes, an English economist who argued in The General Theory of Employment, Interest, and Money (1936) that the rampant joblessness of his time resulted from inadequate demand for goods and services.

According to Keynes, people did not have enough income to buy everything the economy could produce, so prices fell and companies lost money or went bankrupt. Without government intervention, Keynes said, this could become a vicious cycle. As more companies went bankrupt, he argued, more people would lose their jobs, making income fall further and leading yet more companies to fail in a frightening downward spiral.

Keynes argued that government could halt the decline by increasing spending (The preferred Democrat Approach) on its own, or by cutting taxes (The Preferred Republican Approach). Either way, incomes would rise, people would spend more, and the economy could start growing again. If the government had to run up a deficit to achieve this purpose, so be it, Keynes said. In his view, the alternative—deepening economic decline—would be worse.

For many years the Federal government has pretty much adopted the economic theories of John Maynard Keynes and, indeed, we have run up a very sizable deficit. Personally, I think the country needs a new twist on Keynesian economics. Demand side (Keynesian) economics is probably better in the long run for the country than Supply side economics (trickle-down economics just doesn’t work like we’d like it to). But Keynesian economic theory still needs to be twisted a little to include things that were not part of his theory in 1936. By this I mean, rather than lowering taxes, they should be raised instead (not because of continuing class warfare but in terms of simple citizenship—everybody needs to pay his/her fair share).

So, how do we stimulate growth, lower unemployment and, at the same time, obtain significant revenues to pay down and stabilize our national debt? How do we achieve all this and meet all of the needs of the American people at the same time? Well folks, we can’t.

Economic Explosion in Growth

I always liked the expression, “When the going gets tough, the tough get going.” How do we stimulate growth? We do this by spending large amounts of money to target selected areas where new jobs can be created [our near full employment goal]. My ideas for targeting would be total gentrification of our cities, new infrastructure projects in suburban and rural areas of the country such as better highways, dams, and bridges; modernize and overhaul energy alternatives such as natural gas, solar, wind, and start a massive program of building “Green Friendly” homes nationally and overseas by contract.

Lower Unemployment

Many types of jobs would need to be filled if we did all this. We would need every occupation from laborers, carpenters, electricians, plumbers, supervisors, building inspectors, architects, engineers, secretaries, small business owners, managers, waitresses, cooks, doctors, nurses, sales staff, clerks, dentists, police, and firemen. We need to construct more modern large buildings in urban areas where buildings are falling apart due to age.

Massive energy projects are needed, than shortly thereafter smaller peripheral and supporting projects would be needed: new gas stations, grocery stores, restaurants, motels, and medical facilities. This may not be 1946—but look around you—there is much to be done (and redone) in this country of ours right now.

If these things were done in earnest, huge economic growth would certainly occur. With changes in monetary policy occurring at the same time, more credit, lower interest rates, and greater loan activity would provide the cash needed for economic expansion in almost every part of the country.

Precipitously Bring Down the National Debt

This is the hard, unpopular part of my plan. First, reduce government spending of all government agencies across the board by 10%. What will government agencies do? I was in government for 32 years and experienced several 10% cuts. We adjust, we improvise, yet we still managed to get the job done. It was no big deal. I went without an annual increase in pay as well. Trust me! Cutting government services can be done.

Now very tough decisions will need to be made if we, as a nation, want to simultaneously (besides economic expansion and lowering unemployment) reduce our national debt by 10+ trillion dollars. To achieve this will require pain and sacrifice on everyone’s part. What do we do? We make major changes to our system of taxation.

Instead of replacing the current income tax system with a national sales (consumption or fair tax), I propose the country simultaneously do both an income and a consumption tax. You pay your income taxes as you currently do, but also pay a federal sales tax on all goods and services that is tied to the GDP. If GDP currently is 16.5 trillion dollars, we need to generate an additional 9% in revenues each year through a consumption tax. That would add approximately 1.48 trillion dollars (.09 X 16.5 trillion) each year in theUnited States.

And from this time on, the Federal budgetary process would need to have what I call a “soft cap.” That is, the annual Federal budget needs to be tied to the growth rate of GDP. If the GDP increased 2.0% in one year, then the President’s budget could not increase beyond the 2.0% in the GDP.

My modified Keynesian approach doesn’t favor a Democrat or Republican approach to fiscal or monetary policy. It’s just what needs to be done to stabilize this country’s financial situation now and into the future. When I run for the United States Senate next year I plan to propose this solution for our economic woes (JUST KIDDING!).

You probably have thought all this out yourself, and have ideas of your own as to how to revitalize the economic growth of the country and bring down the national debt. However, you’re probably scratching your head right now asking yourself—how can he propose tremendous spending for economic expansion and, at the same time, put a “soft cap” on government spending?  The soft cap is more about controlling any future short-fall between government spending and revenues generated (How else are we going to prevent government borrowing and generating more debt each year?). The answer to the question is easing monetary policy (i.e., easier borrowing, credit, and lower interest rates) combined with dramatic increases in taxation (income plus a national sales tax) should provide the funds for a tremendous spike in economic growth and expansion without putting us further in national debt. I’d be more than delighted to hear your ideas on these topics or my general plan.

In the meantime, President Barack Obama has implemented a moderate plan to trim 4 trillion dollars from our national debt over the next 12 years. If my aggressive approach isn’t wanted by giving the country its austere cod liver oil to courageously attack our economic woes, then I suggest the country embrace his plan for dealing with the problem of our national debt.

What I’ve been saying is that it is time to increase spending to create growth and achieve near full employment and raise taxes by aggressive measures such as a national sales tax on top of our income tax. Substantial increases in spending should occur only if large tax increases are implemented at the same time.  Inflation would occur under my plan but would be countered by raising taxes. It could be done with monetary policy but wouldn’t work because of the need to ease monetary policy to help stimulate growth.

Fighting inflation requires government to take unpopular actions like reducing spending or raising taxes, while traditional fiscal policy solutions to fighting unemployment tend to be more popular since they require increasing spending or cutting taxes. My plan does not involve cutting spending to fight inflation. And yet inflation is like an unintended tax measure resulting in greater tax revenues for the country. To that extent, inflation would directly raise revenues and indirectly help to pay down the national debt.

The downside of my proposal is that the individual will have to pay more in taxes at the same time inflation eats away at any money he has left after taxes; it’s a bitter pill to swallow. The upside to my proposal is that tremendous economic growth in the country would occur, near full employment would be achieved, and our national debt would stabilize and be reduced significantly, and finally controlled by a “soft cap.” Some employed people, and government workers, and retirees would probably hate my proposal, while the unemployed and the business community would probably love it.

The bottom line is—“the country gets what it pays for.” Unfortunately these are times when the country has to pay a lot more to get what it wants. I think the readers of this six part series can now clearly see that tinkering with the economy is no simple matter. I suppose that in the end I have a great deal of respect for those we elect to office. They have to be “all things to all people” and, at the same time, have to struggle with prioritizing economic objectives along side with doing what’s best and right for the country. During these tough economic times—that is no easy task.

Conclusions

This fall I’m voting to re-elect President Barack Obama to a second term as our president. While Mitt Romney appears to be a good and decent man, he does not have the experience, attitudes, or mental acuity to convince me he is more qualified to be the President than Barack Obama.

Regardless of how you arrive at your decision as to who to vote for, I want to thank you for reading this six part series on Election Year Politics and the Economy. I’ve given it my best shot in deciding who to vote for, now it’s time for you to do the same.

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