What is the hardest task in the world? To think. --- Ralph
Waldo Emerson
10/3/2011
Worrying About The Water Bill When The House Is On Fire: Deficit Talk Nonsense
OK, it’s like
this: Our house is on fire. The flames are beginning to engulf our belongings, family mementos, etc. (you get the picture).
Finally, the fire department arrives. They begin to attach the hose to the fire hydrant situated on our property and then…
I begin to argue with my wife about how high the water bill is and refuse to let the firefighters connect the hose to the
hydrant. In the midst of this crisis and emergency, I chastise her for her "lack of fiscal responsibility and discipline."
All the while, the house continues to burn; the flames grow; and the ash and smoke ascend heavenward.
I believe the above-mentioned analogy, gives us an accurate picture of where we
find ourselves today. Our financial house is burning down and the elected officials in Washington are seriously considering
turning down the water pressure of programs, such as Medicare, Medicaid and Social Security that go a long way in lessening
the impact of this brutal economy. The most generous term we can apply to our current set of circumstances is that we are
in an extremely fragile recovery. Simply put, the house is still on fire.
The house is still on fire when we have a 9.2% unemployment rate. A great deal of the jobs that we lost will probably
never come back and there is nothing being done to create new jobs. There are no big public works projects; no revolutionary
21st century WPA. As a matter fact, there are actually half a million fewer government employees now than there were when
Obama took office. A crumbling infrastructure and the need to invest in green jobs, present the perfect opportunity to add
millions of those much needed jobs, and yet, Congress and the White House are again having the wrong conversation at the
wrong time and we are now in the rear view mirror of Germany on the green-driven economy highway.
The house is still on fire when credit is hard to come by
for credit-worthy small businesses. In 2009, bank loans to small businesses were down about $30 billion, or down 4 percent from the previous year according to the Federal Deposit Insurance Corporation. Loans guaranteed by the
federal Small Business Administration fell in June 2010, dropping 66 percent to their lowest level in at least two years,
according to agency data. The value of those loans -- $647 million -- is less than the total in February 2009, the month
before the Obama administration's stimulus plan eliminated some fees on the taxpayer-backed loans and increased the federal
guarantee on some of them to 90 percent (that incentive has since expired). Small businesses are an essential producer
of jobs ---they account for about 60 percent of gross job creation and employ about a half of all American workers.
The house is still on fire when an increasing number of home mortgages
are underwater. The number of Americans who owe more on their mortgages than their homes are worth rose at the end of last year, preventing many people from selling their homes in an already weak housing market ---that adds
up to 11.1 million households or 23.1 percent. We now have approximately 2.4 million people, who have 5% equity or less
in their homes and a housing market that has a total amount of $751 billion in negative equity nationwide.
The house is still on fire when we have on-going military conflicts that carry
hefty price tags. A new study by Brown University shows the cost of the wars in Afghanistan and Iraq will cost $4 trillion dollars. The group of economists, anthropologists,
lawyers, humanitarian personnel, and political scientists involved in the project estimated that the cost of caring for
the veterans injured in the wars will reach $1 trillion in 30 or 40 years. In estimating the $4 trillion total, they did
not take into account the $5.3 billion in reconstruction spending the government has promised Afghanistan, state and local
contributions to veteran care, interest payments on war debt, or the costs of Medicare for veterans when they reach 65 (so
that $4 trillion figure may grow significantly). Consider this… in 2003, the Bush administration had projected that
the war in Iraq would cost, in total, between 50-60 billion dollars.
FDR had a water bill moment, if you will, in 1937 and the country paid the price. Out of fear of inflation
(the water bill), Roosevelt made significant spending cuts in June of 1937. As a result, the economic recovery from the Great Depression (the burning house) temporarily stalled, lasting about 13
months. The unemployment rate jumped from 14.3% to 19.0%, the first increase since FDR took office, and manufacturing output
fell by 37% to 1934 levels. He had, in effect, lost a great deal of the ground made from his bold and progressive New Deal
programs. To Roosevelt’s credit, he reversed course in 1938 and went back to deficit spending, the unemployment rate
began to fall, and kept falling until there was significantly low unemployment by 1945.
Given where we stand today and the clear lessons in history, why are we talking about the deficit as if it is the
current public enemy number one and not unemployment? This carries my water bill and burning house analogy one step
further. It’s as if they’re removing the hose from the hydrant and connecting it to a gasoline truck and taking
aim at the blaze.
This isn’t about whether or not we should
deal with the debt, but rather, is this the time to do it. Millions of people are trapped in the burning house that
is our economy and they are feeling the heat and only the water of jobs and a secure social safety net can put out
the flames that threaten them. When we cut spending on programs that not only help people who are impoverished, but helps
lift individuals out of poverty (such as education), we give oxygen to the roaring fiscal fire that has already scorched
so much of our nation.
In an economic inferno that would make
an Arizona wildfire blush, we are being told that the water bill is more important than the conflagration that is poised
to consume us. I search for a fire escape and all I see is fire and smoke; I listen for the reassuring tone of a first responder
and all I hear, in the distance, are the strains of a violin and the voice of Nero. The house is still on fire.
Yes, I know this is political theater;
and yes, I know that this bill, as popular as it might be with the Tea-Party faction of House Republicans, may have a tough
time passing in the House and absolutely no chance of passing in the Senate. Yet, I believe it behooves us to take a look
at the details of this plan that has now been thrust into the national spotlight. Here are the major points of the bill:
•The plan would lock in cuts over the next
ten years at least as severe as those in the Ryan budget plan. •It would require a two-thirds vote in the House
& Senate to raise the current debt ceiling. •The measure cites three constitutional balanced-budget amendments
(H.J. Res 1, S.J. Res 10, and H.J. Res 56) and states that Congress must approve one of them or a similar measure before
the debt limit can be raised. •The bill would require cuts totaling $111 billion immediately, in the fiscal year
that starts 75 days from now. •Requires that federal spending be kept at 18% of GDP in the next fiscal year
Now that we outlined the various points of the bill let’s deconstruct
those points:
1.By not adding anything in terms of
new revenue, deep cuts to crucial programs becomes the only alternative that’s left for lawmakers. 2.By requiring
an impossible-to-reach super-majority in both houses of Congress to raise the current debt ceiling, the ultra-conservatives
in the House have said, in effect, economic implosion doesn’t faze us in the least. 3.All three of the cited
proposals would require cuts deeper than those in the Ryan budget. All three measures would establish a constitutional
requirement that total federal expenditures may not exceed 18 percent of GDP, and all three would essentially require that
the budget be balanced within the coming decade. 4.Although $111 billion represents less than 1% of the economy, the
timing of the cuts might further weaken the recovery. Congressional Budget Office Director Douglas Elmendorf told the House
Budget committee in June that a $100 billion cut next year would be enough to affect their projections for GDP growth over
the next few years. 5.Their bill is designed to keep spending at 18 percent of GDP, while President Obama has forwarded
that spending be 23% of GDP. It might appear, to some, that those numbers aren’t that far apart, percentage-wise,
but that 5% represents $700 billion dollars in spending. Let’s put that in greater perspective: Former CBO Director Rudolph Penner states that by 2035, spending on Medicare, Social Security and interest on the debt is likely to account for 14% of GDP. Under
an 18% spending cap, which would leave 4% to pay for everything else… the United States today spends 4.7% of its
GDP on defense alone.
What this bill shows us, in
bright and brilliant color, the extreme economic orthodoxy of the ultra-conservative wing of the Republican Party. This
is, as a lucid Newt Gingrich said of the Ryan plan, right-wing social engineering.
In the face of a 9.2 percent unemployment rate, cuts made this fast and this deep poise us not merely for a recession,
but a depression. The cuts would equal 0.7 percent of the projected Gross Domestic Product in fiscal year 2012 and
would cause the loss of roughly 700,000 jobs in the midst of this rather anemic economy. The Cut, Cap & Balance
Act fails in that a balanced bottom line does not automatically equal a healthy economy.
It also fails in that it is unjust and imbalanced in its approach. If this plan became law, Congress would continue
to decide (as they do now) by a straight majority in the House and a 2/3 vote in the Senate (or a straight majority in some
cases), to cut funding for education, healthcare, Social Security, etc. To raise taxes and close corporate loopholes,
however, would require a super-majority in both houses. This piece of legislation makes Paul Ryan look like a stark,
raving centrist.
The Republican leadership knows that this vote is purely symbolic, but contained in the shell of this symbol is the kernel of their very real ideology.
This group of legislators propose making the continued segregation and concentration of wealth towards the top a near-constitutional
right, while, simultaneously, making deep cuts into programs that help the most vulnerable a sure certainty.
The cut, cap and balance mindset operates in a decontextualized environment
that ignores current economic realities; gives no leeway to navigate through any future economic crisis; continues policies
such as rampant deregulation and tax policy that got us where we are in the first place; and leaves the most impoverished
in our society in greater financial uncertainty and difficulty.
As
I said in the beginning, I know that this bill won't become law, but any bill such as this, that passes any
house of Congress, ought to make all of us more vigilant.
To Hell With Lazarus: The Canonizing of American Oligarchy, The Demonization of the Poor
Introduction
As a child, I remember hearing in church the story of Lazarus and the rich man. I recall cringing at
the idea that someone could be that insensitive to the suffering of another; that an individual could turn away from human
pain that was situated just outside their door. Since that time I have lived some and I have learned some and witnessed even
more. I now know, all too well, the depths of callousness that we humans can sink to. I must admit, however, that I didn’t
envision a time where the aforementioned story would itself, be turned so upside-down that it is almost unrecognizable. What
does that mean? It means that by social and political tone; by court decision and governmental policy, we have essentially
positioned the rich man comfortably in the lap of Abraham and cruelly thrust Lazarus into the flames of hell. In other words…
to hell with Lazarus.
In recent years we have
seen a solidifying of the wealthiest Americans economic power, which has always been a feature in American society, while
simultaneously witnessing a decline in workers’ income. Additionally, we have seen an increase of those living in poverty
as well. These set of circumstances encapsulates the interconnected issues of how we as a society subsidize the wealthiest
Americans & corporations and at the same time through indifference, neglect and policy have, effectively, said to hell
with Lazarus to the middle/working class and the poor of America.
Not All Welfare is Created Equal
Years
ago, in my essay, Losing What We Never Had, I wrote in detail the extent to which corporate America (my piece covers
the early 1990’s) depended upon subsidies and how many then laid-off thousands of workers. They said, in effect, give
us your millions and billions and let us make thousands of you unemployed. This is the same attitude that we see today.
We have, basically, given billions of dollars to Big Business and the wealthiest Americans and have simultaneously seen record
unemployment, a stagnant living-wage and an increase in the numbers of those living below the poverty line.
We call programs such as Medicaid, Medicare and Social Security welfare
and entitlements. Aren’t loopholes, subsidies and breaks, which were not paid for, the same as programs designed to
help the most vulnerable citizens in our society? And if these benefits for the wealthy and corporations are as intractable
as some say they are, then how is not an entitlement? The rich and powerful have, rather effectively, controlled the conversation
and the language used in the conversation. They are allowed to be safe behind, comparatively, inoffensive words such as tax-breaks
and subsidies, while the poor and struggling are anchored with welfare and entitlements ---same
thing, different words.
So, when Orrin Hatch, from the
floor of the Senate, declares that the poor have to bear more of the burden, from what stone in the above mentioned set of
circumstances does he want this economic blood to come from? Senator Hatch, in effect, said to hell with Lazarus. His view
is not that dissimilar from the view of the rich man in the account of Christ. It is a blind and cold indifference to real
human pain and suffering.
How much more can the 14.1 million
unemployed; the 43.6 million living below the poverty line and the vast majority of the working & middles class whose
wages have been stagnant for about the last 30 years, contribute? Conversely, the wealthiest 10 percent of Americans now have
a larger share of total income than they ever have in records going back nearly a century — an even larger amount than
during the Roaring Twenties, the last time the US saw such similar disparities in wealth. To put this in greater perspective,
in 2006, due to the Bush tax cuts, households in the middle 20 percent received $448. Families in the top
1 percent received $39,020. And households in the top 0.1 percent received $200,523. What did households in the bottom 20
percent receive? Twenty-three dollars.
Yet,
it is the ones overwhelmed by circumstances created in large part by those who received the afore-mentioned $200,000 in 2006
(from the entitlement program of unbudgeted tax-cuts) who receive the stigma of the “welfare” label. They are
sent the not so subtle message of to hell with Lazarus. No, it isn’t the pirates of Wall Street; nor is it the loophole
& subsidy-happy corporations that are regulated to the Hades of economic sacrifice, but rather it is the poor, the working
and the middle class that are banished to the flames. They are the ones who are told, to hell with Lazarus, while the wealthy
live in a paradise of exemption.
Haven Help Us
As more ways are being devised to defund programs that are crucial to those who are being hardest hit by this economic
crisis, the rich are hoarding and illegally hiding income in tax havens. In July of 2008, before the November elections, there
was a report released by the Senate Permanent Subcommittee on Investigations, titled: Tax Haven Banks and U.S. Tax Compliance. It detailed how tax haven banks, through secrecy and misconduct, helped
U.S. clients hide their assets --- cheating the country out of about 100 billion dollars a year. Not much was done at time
or indeed is being done now. The rich man must and will be protected and usually at the expense of Lazarus. It appears that
it is much more feasible to deprive Lazarus of the crumbs than to deny the rich man any part of any meal.
In 2007, at a $4,600-per-seat fund raiser in New York for Senator Hillary
Clinton, Warren Buffet stood up and told the crowd, "The 400 of us [here] pay a lower part of our income in taxes than
our receptionists do, or our cleaning ladies, for that matter. If you're in the luckiest 1 per cent of humanity, you owe it
to the rest of humanity to think about the other 99 per cent." As an example, he noted that he was taxed at 17.7 per
cent on the $46 million he made in 2006, while his secretary, who made $60,000, was taxed at 30 per cent. Buffet’s statement
stands out as much for its rarity as it does its honesty.
It
is also estimated, that anywhere between 10 and 20 trillion U.S. dollars is in some sort of offshore tax haven or tax shelter. The various ways in
which the wealthy and powerful corporations are allowed to skirt shouldering more of the responsibility when it comes to alleviating
the financial suffering of our nation is disturbing. It seems so little is asked of those who have gained so much --- and
the very thought of doing so is considered sacrilege by some --- how do we then extort further sacrifice from all those Lazraruses
in dire straits?
The Whole World In Their
Hands?
I’d like to call our attention to
the numbers in regard to how much of the wealth of this country that the top 5 percent hold. The following statistics are
from a Federal Reserve Board report from 2006:
•The
wealthiest 1 percent of Americans owned 33.4 percent of the wealth in 2004, up from 30.1 percent in 1989. •The wealthiest
5 percent of Americans held 55.5 percent of the wealth in 2004. •The poorest 50 percent of the American population
collectively owned 2.5 percent of the wealth in 2004, down from 3.0 percent in 1989. •The very wealthiest 1 percent
of Americans now own a bigger piece of the pie (33.4 percent) than the poorest 90 percent put together (30.4 percent). •The wealthiest 1 percent of Americans owned 62.3 percent of the business assets in 2004. •The wealthiest
5 percent collectively owned 88.7 percent of business assets. •The wealthiest 5 percent also owned 93.7 percent
of the value of bonds, 71.7 percent of nonresidential real estate, and 79.1 percent of the value of stocks.
What these numbers suggest is that we might have well become more of an
oligarchy than a democracy. When the super-rich holds this much of the wealth of the nation, how much room is there for our
interests and concerns? What price does a democracy pay when so much power is concentrated in so few hands? There are some,
in the highest halls of government, who see absolutely nothing wrong with this imbalance --- is it because a great many of
them benefit from it? This too, is very much in keeping with the attitudes held by the rich man: it seemed perfectly fine
to him that the dogs were the prime contributors of comfort for Lazarus.
Wealth, of the magnitude described here, gives these individuals access to our nation’s decision-makers in
ways that the average citizen could only dream of, let alone the poor. John Adams said, Riches attract the attention, consideration
and congratulations of mankind, one might also add the devotion of politicians as well. In a society of increasing economic
disparity and elected officials beholden to those wealthy interests, how is the cry of Lazarus heard?
Conclusion
There may be some who will charge me with inciting class warfare. To do so, however, would be to turn a blind eye
to the one that has been taking place for quite a long time and has escalated in recent years --- and the poor,
working and middle classes didn’t initiate it.
Yes,
it is class warfare and it comes down to the WMDs of their millions and billions against the sticks and stones of our nickel
and dimes; it is the Special Forces of their lobbyists, against the troop of boy scouts of our collective voices.
There are times when an argument is so clear that it would be tantamount to criminal negligence to ignore it; and that argument
is this: it is better to tell someone that the yacht they want to purchase has to be 10 feet shorter than to cut money that
goes to the education of a child in poverty; it is better to tell someone that they may have to forgo purchasing their fourth
or fifth home than to tell someone they have to choose between their medications or eating; it is better to tell someone that
they have to settle for the Mercedes with less options than to tell someone they have three less weeks of unemployment insurance
than expected. It is, for me, that simple
At this
moment there are millions of Lazraruses right outside the doors of the Capitol Building and 1600 Pennsylvania Avenue seeking
relief from the stifling conditions of this economy and they have been there for quite some time. I imagine that the rich man did a great deal of rationalizing, denying and
justifying: Lazarus deserves to be where he is; if Lazarus would just show some
initiative; Lazarus can’t expect ME to solve his problems.
To allow those upside down and backwards rationalizations to stand, would be the most resounding to hell with
Lazarus of all.
The NFL Lockout Day 108: The Need to Preserve the Extraordinary
Introduction
Football, O' football...
where for art thou? Are you suffering from the lockout blues too? I discuss my take on the NFL lockout.
If we had
to choose a sport, as a family, it would be football. Here's a brief family background: My wife was born and raised in Minnesota
cheering for the Vikings (including the Bud Grant-coached Purple People Eaters of the old Met Stadium); I grew up on the South-side
of Chicago rooting for my beloved Chicago Bears (Butkus, Sayers, Payton and the fabled 1985 team), played some college football
in Wisconsin (Superior) and coached high school football in Massachusetts.
Our 9 year-old son's football journey
is interesting as well. It includes being born in Massachusetts and living there during the Patriots three championship seasons
and then living in Pittsburgh during their last two Super Bowl wins. He has played in a youth football league for two seasons
and was picked for the league All-Star game in his second season --- my wife and I helped out with his football team. A funny
aside, even in that testosterone-saturated environment, my wife, bathed in all her glorious estrogen, was called coach. So,
as I said before... we're a football family.
Given our affinity for the sport, this uncertainty about the upcoming
NFL season is difficult for us. Football enthusiasts are hardwired for that extraordinary rush that football provides. Wow!
Did you see that catch? Whoa! Did you see that hit? We as a family and as football fans generally speaking, coalesce around
the extraordinary things these amazing athletes do.
They are asking their bodies to do not so much what they aren't
able to --- we've seen them do some pretty incredible things often enough --- but rather what their bodies were not meant
to do (high speed impact, high pain endurance, out-of-this-world acrobatics etc.). This makes this lockout even more unbelievable
for us as fans because we've seen this sport's athletes push themselves to the limit so it is inconceivable that the league
and the players will not do all they can to make sure the season, a complete season, is a reality.
Nevertheless,
the most extraordinary thing about football is not its amazing athletes or its exciting play, but rather its unique relationship
with its fans. It is that relationship that has made NFL football the most popular sport in America. Think about, we have
cable networks devoted to practically every major sport, but the gold standard is the NFL Network.
This relationship
is not indestructible, however. Not even did during the strike-shortened seasons of 1982 and 1987 did, in my opinion, the
connection between the NFL and its fans seem so threatened. The much-higher salaries and an economic crisis unseen since The
Great Depression, has made the public less than patient with the bickering between people who won't have to worry about where
their next meal is coming from.
Additionally, with a level of exciting and dramatic playoff basketball unseen for
quite some time, the NBA seems poised to comfort a multitude of brokenhearted NFL fans (for at least part of the season) if
the owners and players prove to be self-destructive enough to do irreparable harm the 2011 season --- the extraordinary is
not as easily rediscovered as one might think.
I am not pretending to know all the ins and outs of the issues that
are being discussed between the parties involved (that's a whole other article), but I will say this: let us, football fans,
hope that meetings that are taking place between the owners and the players prove fruitful enough that it restores to us that
extraordinary feeling that football gives us like no other sport can.
