The State Of The Nation

The News for April 27th, 2011:

After remarks by the Fed chief, the Dow closed at its highest level since May 2008, while the Nasdaq hit its highest point since December 2000.

Then you have this:

Walmart CEO: Consumer Under Pressure

Shared Prosperity

The Washington Post has just released its poll that pretty much sums America up:  Most Americans do not want to cut Social Security, Medicare, Medicad, or the Defense budget, and they are against across the board tax increases but they favor taxing the rich more.

58% of Americans disapprove of how the President is dealing with the deficit and 64% disapprove of how the Republicans in Congress are dealing with the deficit.  Then you come to this:

Congressional Republicans maintain a narrow edge over Obama when it comes to taking a “stronger leadership role” in Washington, 45 to 40 percent. And political independents side with the Republicans on tackling the burgeoning debt. But Obama maintains a key, double-digit advantage among independents when it comes to “protecting the middle class.” 

So 64% of Americans disapprove of how the Republicans are dealing with the problem of the deficit but 45% believe that the Republicans are taking a stronger leadership role.  Then independents side with the Republicans on tackling the debt but the give a double digit advantage to the President for protecting the middle class.

As confusing as that all may be it can easily be translated to:  Americans want what Obama proposes but they want him to LEAD on the issue and protect the middle class. 

I know lots of liberals don't really understand Americans and they find the "average joe" to be stupid, religious, anti-science, and racists.  The reality is most Americans are scared and fearful of the future and are looking for leadership.  Leadership:  That which seems so alien to liberals.

Can anyone claim they understand what is going on with the economy?  Can anyone promise that the future will be better and we a more prosperous nation?  We keep hearing about how the government is all for creating jobs and then all we see is where McDonalds is hiring 50,000 people!  Those are jobs that pay $7.25/hour and average 18 hours a week.  THINK!  An unemployed construction worker with a wife and three kids applied for one of those jobs and exactly how does anyone expect him to make do with that?

He really has no idea exactly what the government does but he is starting to suspect that it isn't going to benefit him.  All of this talk about the wonders of science and technology and what potential it offers mankind really doesn't seem to make much of a difference to someone who is trying to get by on a job at McDonalds. 

Yeah, he's not the sharpest knife in the drawer, but he did his job, he followed the rules and all he knows now is that he is being left behind.  For 30 years he heard all the politicians and their promises, he heard all the experts with their theories and opinions, and he figured these political and intellectual elites knew what they were talking about and were doing what was best for the country.

Now he realizes that the more they did the further behind he fell; $7.25 an hour for 18 hours a week.

Teachers and government workers are protesting the loss of their collective bargaining rights and most likely this guy lost his house and he is to give a damn about somebody losing something he never had?  Funding for NPR, Planned Parenthood, and PBS?  Like he really cares as he spends most of his days trying to dodge his creditors.

The violence in the middle east?  Iraq?  Afghanistan?  Libya?  None of it really matters when you have to tell your kids that daddy can't buy them a new toy.

Social Security, Medicare, retirement?  Who can think that far into the future when you are struggling to live day to day.

America was a great country at one time; at one time we prided ourselves on a shared prosperity and now all we talk about is a shared sacrifice.  As long as we continue to drift without leadership, without a rudder, the anger, the frustration, and the stupidity of the masses will continue to haunt this country.  Most Americans realize that politics has nothing to do with their lives and that is a shame that both parties share. 

Its A Conspiracy....

....or just a bunch of drama queen bloggers who got themselves worked up over nothing!

From the National Journal:

Among Democrats, Obama's job approval is about 5 percentage points away from where he needs to be. Three-fourths of self-identified liberals approve of Obama's performance to date. He needs these numbers to be higher. Liberal white Democrats and African-Americans are solid Obama supporters. But Obama's approval rating has dropped significantly among Latino voters (73 percent when he was elected; 54 percent now, according to Gallup), and slightly among younger voters (ages 18 to 29) who were hardest hit by the economic sluggishness. While 55 percent among this group is stronger than it was half a year ago, according to a huge Institute of Politics poll released last week, it needs to be higher. Still, in the absence of a Republican foil, these are generally sufficient numbers for the president. At this point in 1995, more than 4 in 10 Democrats wanted a primary challenger for Bill Clinton; fewer than 2 in 10 do for Obama. 

Among Democrats Obama has nothing to fear in regards to a primary challenger and without an obivous Republican challenger Obama's 'base' is holding steady (except among Latino voters and that is a problem considering that they turned out strong in 2008 and 2010).

So, "The Left," "The Progressives," and "Young Whiny Democrats," are nothing more than the result of an over active imigination on the part of Obama Loyalists!  Doesn't surprise me because outside of normal trends I didn't see much to show that a whole bunch of Leftists stayed home in 2010!

Now, thanks to the Ryan, "Path To Prosperity" the Democrats can rally the base and reach out to the moderates; too bad they always have to wait for the Republicans to come up with something to which they can then define themsleves by!

Speechless in DC!

Helplessly Hoping...

Ah, Crosby, Stills, Nash, & Young....Helplessly Hoping...

Today Barack Obama will present the democratic proposal to counter the republican "Path To Prosperity."  So, liberalism 2.0 boils down to adding tax increases to  conservative budget cuts.

Of course the mellodrama on the left, because they now realize that Obama is going to cut their benefits or because "THE LEFT" has sold the democrats upriver, or just due to the fact that the republicans have successfully divided and conquered the masses, will raise in pitch and frequency but the reality is our country is in a transformational deficit and we are at a loss of ideas and leadership. 

Of course voter turnout dropped from a surprising high of 57% in 2008 to a disappointing 38% in 2010.  Regardless of ones political beliefs it obvious, after factoring in all the Tea Party anger, all the blogging about the Founding Fathers, Ayn Rand, and 'taking our country back' that the American voter is NOT reactionary nor conservative.  With all the energy expended by the right to capitalize on what they perceived as an opportunity to benefit from the creation of a "..non American born, muslim, socialist president" they were only able to get voter turnout, with lukewarm support of the democrats to 38%!

So much for the concept of America as a "right of center" nation. With all the effort expended by the right in 2010 they only increased voter turnout by 1% over 2002 and less than 1% over 2006.  Its obvious that the issue is not that the republicans are successful at dividing and conquering but rather that neither party truly appeals to the vast majority of Americans.

While voter turnout was high in 2008 historically it was not all that impressive when compared to voter turnout in 1960, 1964, or 1968.  If we reflect, just superficially, we will note that the democratic party in those prior years was much more 'liberal' than it is today and there was an obvious distinction between the two parties then, both of which are lacking today.

As the right wing malcontents pull the republicans off the cliff of reactionary irrelevance the democrats are finding themselves being pulled to the right also.  For all the talk of bipartisanship and compromise on the part of President Obama the reality is, that most of his efforts in this regard were with members of his own party!  

If we take the average voter turnout for the three most recent presidential elections and compare them with 2008 we will note that 2008 represents a 5.1% increase in voter turnout, or right at 10% of the historical average.

That represents the desire of American voters for a more left of center government!  That is an indictment of our two party system and its neo-liberal bias to represent the true wishes of the voters.

Whatever President Obama proposes this evening is really irrelevant in the long term.  The reality is that a huge gap has opened up, on the left, for a third party and if the democrats refuse to offer policies that are nothing more than neo-liberalism as liberalism then this opening will be filled by a third party.

The Race To The Bottom

Gordon Brown, or the guy believed to be the brains behind Tony Blair, has acknowledged that:

Ex-prime minister Gordon Brown admitted that he made a "big mistake" in not seeking tighter regulations on banks in the lead up to the financial crisis. The former leader told a conference in the US that he had not fully appreciated how "entangled" the global financial system had become when establishing the Financial Services Authority (FSA), the country's regulatory body.
"We set up the FSA believing the problem would come from the failure of an individual institution," Brown said. "That was the big mistake. We didn't understand just how entangled things were.
"I have to accept my responsibility."

He now understands that:

"There should be an international agreement, otherwise you'll just have banks threatening to move from one country to another," continued Brown.

"Britain was under relentless pressure from the City (Britain's financial centre) that we were overregulating. All through the 10 to 15 years, the battle was not that we regulated too little, but that we regulated too much," he added.

Yes, Gordon, you don't give the banks what they want and they threaten to go off shore..  You don't give business what they want and they threaten to go off shore.  The reality is, if you are going to buy into the concept of globalization and free markets then we need to start regulating our banking and financial industries globally. 

Glad to see that Gordon Brown finally understands! 

That then brings us to the democrats in the United States.  Here is a really good article on how the battle over raising the debt ceiling is going to be played out:

The Republican Playbook for the Debt-Limit Fight

   

Democrats, or at least those who we will now call "Obama Huggers" pay close attention to this:

If the early rhetoric is any indication, House Speaker John Boehner is going to rely on the same playbook he used to best Democrats this time around - leveraging his hard-liners to wrest away most of what he wants. And it is probably going to work once again.

Of course it will work again, because there isn't any hard-liners on THE LEFT to counter balance the threat that the Tea Party presents! 

Obama will present his "spending plan" this week and of course all the "Obama Huggers" will cheer and get all weak in the knees to race out and blog their support.  Its time to realize, as Gordon Brown has on the banking industry, that until someone comes up with a "REVENUE PLAN" all the "Obama Huggers" will have to champion is a less draconian "Path To Prosperity." 

Its such a shame that the "Obama Huggers" continously want to attack the "THE LEFT" without realizing that "THE LEFT" is all they got as an alternative to the Tea Party.

Blinded By Our Own Bias

With the current "faux" budget battle between the Democrats and Republicans we seem to lose touch with reality by our anger at the opposition; the reality that slips from our grasp is basically the world that most Americans live in.  Thus, voter apathy should not come as any surprise in light of the fact that what Americans WANT from government and what they GET are two totally different things!

The NORC Data Enclave at the University of Chicago recently released their biennial General Social Survey and they found that Americans WANT their tax dollars spent on the following, in order of importance:  

1. Education
2. Assistance to the Poor
3. Halting Crime
4. Social Security
5. The Environment
6. Dealing with Drug Addiction
7. Childcare
8. Healthcare
9. Drug Rehabilitation
10. Law Enforcement

If you take the 2010 federal budget and break it down you find that these are ACTUALLY our nation's budget priorities:

• Medicare, Medicaid and the Children’s Health Insurance Program
• Defense and Security-Related International Activities
• Social Security
• Safety Net Programs That Provide Aid to Individuals and Families Facing Hardships
• Benefits for Federal Retirees and Veterans
• Interest on Debt
• Transportation Infrastructure
• Education
• Scientific and Medical Research
• Non-Security International Affairs

Now, this is the first time since 1990 that healthcare did not make it into the top two priorities of the majority of Americans and most likely this is due to fatigue.  While this is the 27th biennial study conducted since 1973 it is the first since the 2008 financial meltdown. 

Obviously, there is a real disconnect between the masses that vote and the elites that govern.  Either the two parties are doing a poor job of connecting their priorities to those of the voters or the American voter really doesn't matter to the governing elites.

It should be quite obvious, as long as one is not blinded by their own bias', why their is so much anger on the right and so much apathy on the left.

UPDATE:

I found this site, which not only lists the priorities but also show a percentage amount and its obvious that neither party represents the people!

The "Narrative" Continues

I cannot help but notice that the Democrats lack the ability to control "the narrative" of current politics.  Barack Obama made a gallant attempt in 2008 to change the narrative and the Democrats thus found themselves with a mandate and overwhelming (in regards to current political history) majorities in the House and the Senate.  With the financial meltdown the Democrats also found themselves in an environment very conducive to a change in the narrative.

But the narrative did not change.  The narrative today, is neoliberalism, as it has been since 1980:

"Neoliberalism describes a market-driven approach to economic and social policy based on neoclassical theories of economics that stresses the efficiency of private enterprise, liberalized trade and relatively open markets, and therefore seeks to maximize the role of the private sector in determining the political and economic priorities of the state.


The term "neoliberalism" has also come into wide use in cultural studies to describe an internationally prevailing ideological paradigm that leads to social, cultural, and political practices and policies that use the language of markets, efficiency, consumer choice, transactional thinking and individual autonomy to shift risk from governments and corporations onto individuals and to extend this kind of market logic into the realm of social and affective relationships."

The reality is that Republicans and Democrats have bought into the idea of "...maximizing the role of the private sector in determining the political and economic priorities of the state."  The conservative bloc of the Republicans still attempt to call this "statism" but the reality is it is not; it is corporatism.

The only real difference between the two parties is in regards to "...shift(ing) risk from grovernment and corporations onto individuals and to extend this kind of market logic into the realm of social and affective relationships."  

The narrative is ideal for the Republicans and it allows them to capture the anti-government anger, the belief that government benefits everyone but me, and all the other strains of malcontent that exists in a society.  The Democrats on the other hand find their support among the 'rose colored glasses' 1960's radicals, the unions, and the various other minority groups that believe that government can make a difference.

As Bill Clinton so famously stated in 1996, "...the era of big government is over." 

The Path To Prosperity, which is the title to Paul Ryan's long term budget proposal, is just an obvious continuation of neo-liberalism, and should be viewed as the exclamation point to the sentence, "...the era of big government is over!"  

The reality is that this proposal is our new narrative!  The Democrats will find themselves debating "less" against "more" because they lack prescriptive alternatives not only to Ryan's plan but to neoliberalism in general.

You cannot argue that tax cuts do not create jobs, when your stimulus proposal was made up of almost 70% tax cuts.  You cannot argue that tax cuts do not create jobs when you extend the Bush era tax cuts to....create jobs and stimulate the economy!  You cannot argue against a proposal that lowers the highest tax rate to 25% because....that creates jobs!  

It is near impossible to argue against shifting medicare to a voucher system (here is a tough argument to argue against inregards to vouchers) and medicad to block grants when in your own healthcare reform bill you never seriously considered a single payer option and you never once questioned why we rely on business to provide the vast majority of our citizens with access to health insurance.  The reality is that the seeds for the Ryan proposal were planted during the Obamacare debates.

Until the Democrats find an alternative to neoliberalism they will never be able to change the narrative.  Until such time, the pressure will be for smaller government, lower taxes for the rich and corporations, more deregulation, and a shift from the federal, to the state, to local, and eventually to individuals of risk, and the too big to fail will only grow bigger.  

Asking THE Question

Whenever one discusses religion there comes a point where no matter how hard one tries they have to acknowledge that the only 'proof' that they have for the existence of God is their belief in the existence of God.  

That is faith.

In politics we are constantly subjected to debates and arguments as to policy decisions and for all practical purposes these discussions are based on faith:  They are based on a fundamental belief that one party, one official, is 'better' for the country as a whole than another.  

Like a religious battle between Christian and Muslims, no one side can prove the superiority of one religion over another, or that one God actually does exist and the other does not.  When existence depends on beliefs then without shared beliefs there can be no shared knowledge.  The seems to be the reality of political debate also.

The reality is that in politics we argue beliefs and not solutions.  We start from a set of principles and then determine what is the best policy, the best party, or the best solution based upon our principles rather than based upon logical fact.

Even with overwhelming data that might disprove our conclusion based upon principles we, as humans, have the ability to argue with reality:  We deny facts!

Take for example:

Currently, a record 47 million people live below the poverty line—$22,400 per year for a family of four—including one in five children.

Over 100 million people, or one in three Americans, live on less than $46,000 for a family of four.

Since 1980, U.S. gross domestic product (GDP) per capita has increased 67%, while median household income has only increased by 15%. 

That then brings us to the question of income distribution, both before and after taxes:

Now, from the perspective of a conservative, they will immediately claim that "big" government causes economic calamity while liberals will claim that government should rectify this situation.  

But, lets take government out of the equation, and make this a purely economic issue; at that point most Americans would have nothing to say. 

Politics HAS become our religion and our principles have become our GOD.  Thus, there is no proof that one God is superior to another as one's principles are based on faith....not facts.

Faith creates a belief in miracles not a search for solutions.

If Prosperity equals productivity plus consumption then as our nation's labor productivity has steadily increased and as our consumption increases annually then there should be no poverty in this country.

If an ever increasing GDP represents  "a rising tide" then if "a rising tide raises all ships" then income before and after taxes should rise equally for all the various income brackets.

Given the data above, "government" only enters the data in one place, and that is in the graph "Change In Income...after taxes" and thus to resolve this problem, to seek solutions, political principles, or faith, is no longer useful.

Free Trade

Any debate about our economy always seems to be based upon political theory and not logical economic facts; from the right we are told that free trade creates jobs and economic prosperity.  You have Milton Friedman, the Van Mises Institute, the Cato Institute and the Heritage Foundation all being quoted in regards to anything regarding economics and especially when free trade is discussed.

From the left you really don't hear much because realistically the major left of center political party, the Democrats, really do not have an economic policy that is all that much different than the one espoused by the right.  It seems that democrats like globalization but do not speak all that much about free trade.  

Then of course you have Thomas Friedman, The World Is Flat:  A Brief History of the Twenty-first Century.   Here we are, only 11 years into the 21st Century and we already have people claiming to write a history of it; all of which centers around the concept of 'globalization.'

If we look at American history we realize that from our humble beginnings America grew and prospered in a largely protected economic environment.  Our trade then was not “free.” But after World War II, we wandered away from Alexander Hamilton’s vision of a relatively self-contained American economy in order to win the cold war. We threw our markets open to the world as a bribe not to go communist.  At the time there was not any big threat as we benefited from easy access to cheap raw materials and Europe was devastated by the carnage of war, and the rest of the world was so undeveloped they were irrelevant; we enjoyed a very enviable position as we had a manufacturing and industrial base that had not been destroyed by war.

Then in the 1970's we saw our first threat, Datsun's from Japan.  From that meager beginning we have watched our trade deficit hovers at around $500 billion dollars a year since 2000.  What started as a political response to the threat of communism has become an economic policy since the passage of NAFTA in 1994.

The reality is that this trade deficit represents a giant “reverse stimulus." It causes a huge slice of domestic demand to flow not into domestic jobs but foreign wages.  Our trade deficit helps Guangdong, Seoul, Yokohama, even Munich – but not Gary, Indiana, Fontana, California, and the other badlands of America’s industrial decline. Washington’s response? Yet more stimulus, leading to an ever-increasing overhang of debt, both foreign and domestic, the cost of whose servicing then exerts its own drag on recovery.

The math is very simple, productivity and consumption are prosperity.  Forget the inequality in wealth, forget redistribution of wealth, the fact is Americans consume but the productivity that generates wealth and supplies this consumption is performed in other countries.  Thus, the standard of living, or prosperity that consumption creates is being enjoyed in other countries.

Our 200 year tradition of shared prosperity is over because the great American job machine has been disassembled and moved to foreign countries and Americans now struggle with increasing inequality,  rising indebtedness, community abandonment, and the weakening of the industrial sinews of our national security.

Despite the 216,000 jobs added last month, the American economy has, in fact, entirely lost the ability to create jobs in tradable sectors. This cheery fact comes straight from the Commerce Department. All our net new jobs are in nontradable services: a few heart surgeons and a legion of busboys and security guards, most of them without health insurance or retirement benefits.  We no longer make anything that we can trade with other countries.

These are dead-end jobs, and our economy as a whole is being similarly squeezed into dead-end industries. The green jobs of the future? Gone to places like China, where governments bid sweeter subsidies than Massachusetts can afford. Nanotechnology? Perhaps the first major technology in a century where America is not the leading innovator.

Forget inflation, forget taxes, forget government spending, forget the Federal Reserve, and forget the deficit, our prosperity is directly related to our trade deficit.

The fundamental reality of free trade is that it relieves corporate America from any substantial tie to the economic well-being of ordinary Americans. If corporate America can produce its products anywhere, and sell them anywhere, then it has no incentive to care about the capacity of Americans to produce or consume. Conversely, if it is tied to making a profit by selling goods made by Americans to Americans, then it has a natural incentive to care about American productivity and consumption:  The prosperity of American corporations needs to be tied to the prosperity of Americans as a whole.

We opened our economic borders in an attempt to give other nations a way to build their economy's without succumbing to the threat of communism and if we do not return to a policy of strategic, not unconditional, economic openness, we may lose the next cold war – to a Confucian authoritarianism no less opposed to the idea of a free society than Marxism, and considerably more efficient. 

The House of representatives have taken the first step by passing a policy that would allow the US to apply compensatory tariffs against imports subsidized by currency manipulation; which was an idea originated by Kevin Kearns of the US Business and Industry Council.  This will allow American companies to compete in a globalized market place that is both FAIR and free.  Then we also need to establish a border tax to counter foreign export rebates implemented by means of foreign value-added taxes. 

We also need to understand that the first responsibility of any government is to secure its borders and to provide for the safety and well being of its citizens; and free trade, as it stands right now, is a threat to our security, our well being, and it is diminishing the opportunity of prosperity for future generations.