Listen to a Highly Placed Long-Time Republican Staffer September 7, 2011March 25, 2017 He is Mike Lofgren and he titles his piece, “Goodbye to All That: Reflections of a GOP Operative Who Left the Cult.” In part: . . . The [Republican] Congressional directory now reads like a casebook of lunacy. It was this cast of characters and the pernicious ideas they represent that impelled me to end a nearly 30-year career as a professional staff member on Capitol Hill. A couple of months ago, I retired; but I could see as early as last November that the Republican Party would use the debt limit vote, an otherwise routine legislative procedure that has been used 87 times since the end of World War II, in order to concoct an entirely artificial fiscal crisis. Then, they would use that fiscal crisis to get what they wanted, by literally holding the US and global economies as hostages. The debt ceiling extension is not the only example of this sort of political terrorism. Republicans were willing to lay off 4,000 Federal Aviation Administration (FAA) employees, 70,000 private construction workers and let FAA safety inspectors work without pay, in fact, forcing them to pay for their own work-related travel – how prudent is that? – in order to strong arm some union-busting provisions into the FAA reauthorization. Everyone knows that in a hostage situation, the reckless and amoral actor has the negotiating upper hand over the cautious and responsible actor because the latter is actually concerned about the life of the hostage, while the former does not care. . . . It should have been evident to clear-eyed observers that the Republican Party is becoming less and less like a traditional political party in a representative democracy and becoming more like an apocalyptic cult . . . As Hannah Arendt observed, a disciplined minority of totalitarians can use the instruments of democratic government to undermine democracy itself. . . . There are tens of millions of low-information voters who hardly know which party controls which branch of government, let alone which party is pursuing a particular legislative tactic. These voters’ confusion over who did what allows them to form the conclusion that “they are all crooks,” and that “government is no good,” further leading them to think, “a plague on both your houses” and “the parties are like two kids in a school yard.” This ill-informed public cynicism, in its turn, further intensifies the long-term decline in public trust in government that has been taking place since the early 1960s – a distrust that has been stoked by Republican rhetoric at every turn (“Government is the problem,” declared Ronald Reagan in 1980). . . . [T]he pundit’s ironic deprecation falls like the rain on the just and unjust alike, on those who precipitated the needless [debt ceiling] crisis and those who despaired of it. He seems oblivious that one side – or a sizable faction of one side – has deliberately attempted to damage the reputation of Congress to achieve its political objectives. This constant drizzle of “there the two parties go again!” stories out of the news bureaus, combined with the hazy confusion of low-information voters, means that the long-term Republican strategy of undermining confidence in our democratic institutions has reaped electoral dividends. The United States has nearly the lowest voter participation among Western democracies; this, again, is a consequence of the decline of trust in government institutions – if government is a racket and both parties are the same, why vote? And if the uninvolved middle declines to vote, it increases the electoral clout of a minority that is constantly being whipped into a lather by three hours daily of Rush Limbaugh or Fox News. There were only 44 million Republican voters in the 2010 mid-term elections, but they effectively canceled the political results of the election of President Obama by 69 million voters. . . . If you think Paul Ryan and his Ayn Rand-worshipping colleagues aren’t after your Social Security and Medicare, I am here to disabuse you of your naiveté. They will move heaven and earth to force through tax cuts that will so starve the government of revenue that they will be “forced” to make “hard choices” – and that doesn’t mean repealing those very same tax cuts, it means cutting the benefits for which you worked. . . . ☞ There’s much more, including some excellent criticism of Democratic messaging. It’s worth reading the whole thing. WHAT THE LEFT DOESN’T UNDERSTAND ABOUT OBAMA And, as a taste of columns to come – yes, we’re just getting started – there’s this from Sunday’s New York Times Magazine. It is addressed to my many wonderful friends who direct their frustration and anger at the President when it is in fact the other side that has stretched the political canvas on which he must paint. . . . The most common hallmark of the left’s magical thinking is a failure to recognize that Congress is a separate, coequal branch of government consisting of members whose goals may differ from the president’s. Congressional Republicans pursued a strategy of denying Obama support for any major element of his agenda, on the correct assumption that this would make it less popular and help the party win the 2010 elections. Only for roughly four months during Obama’s term did Democrats have the 60 Senate votes they needed to overcome a filibuster. Moreover, Republican opposition has proved immune even to persistent and successful attempts by Obama to mobilize public opinion. Americans overwhelmingly favor deficit reduction that includes both spending and taxes and favor higher taxes on the rich in particular. Obama even made a series of crusading speeches on this theme. The result? Nada. That kind of analysis, however, just feels wrong to liberals, who remember Bush steamrolling his agenda through Congress with no such complaints about obstructionism. Salon’s Glenn Greenwald recently invoked “the panoply of domestic legislation — including Bush tax cuts, No Child Left Behind and the Medicare Part D prescription drug entitlement — that Bush pushed through Congress in his first term.” Yes, Bush passed his tax cuts — by using a method called reconciliation, which can avoid a filibuster but can be used only on budget issues. On No Child Left Behind and Medicare, he cut deals expanding government, which the right-wing equivalents of Greenwald denounced as a massive sellout. Bush did have one episode where he tried to force through a major domestic reform against a Senate filibuster: his crusade to privatize Social Security. Just as liberals urge Obama to do today, Bush barnstormed the country, pounding his message and pressuring Democrats, whom he cast as obstructionists. The result? Nada, beyond the collapse of Bush’s popularity. Perhaps the oddest feature of the liberal indictment of Obama is its conclusion that Obama should have focused all his political capital on economic recovery. “He could likely have passed many small follow-up stimulative laws in 2009,” Jon Walker of the popular blog Firedoglake wrote last month. “Instead, he pivoted away from the economic crisis because he wrongly ignored those who warned the crisis was going to get worse.” It’s worth recalling that several weeks before Obama proposed an $800 billion stimulus, House Democrats had floated a $500 billion stimulus. (Oddly, this never resulted in liberals portraying Nancy Pelosi as a congenitally timid right-wing enabler.) At the time, Obama’s $800 billion stimulus was seen by Congress, pundits and business leaders — that is to say, just about everybody who mattered — as mind-bogglingly large. News reports invariably described it as “huge,” “massive” or other terms suggesting it was unrealistically large, even kind of pornographic. The favored cliché used to describe the reaction in Congress was “sticker shock.” . . . . . . Liberal critics of Obama, just like conservative critics of Republican presidents, generally want both maximal partisan conflict and maximal legislative achievement. In the real world, those two things are often at odds. ☞ More on this theme to follow. And tomorrow: TRACTOR TRAILOR FUN.
The First Day of School And Matt Damon's Mom September 6, 2011March 25, 2017 School’s back in session, and these two items are related: INCOME INEQUALITY From 1976-2007, average real (inflation adjusted) income reportedly grew at 4.4% for those in the top 1% compared with 0.6% for the bottom 99%. The top 1% captured 58% of all the income growth ( rising to 65% from 2002-2007). If you are concerned that the top 1% failed to capture 100% of the income growth (or 150% or 200%, which they could have done if the bottom 99% had seen their income fall) – these are the job creators, after all, and it’s important to us that they do well – never fear! We slashed their taxes along the way, so that, after-tax, they did even better. And that, my friends, is why unemployment is today so low: because we’ve given the job creators unprecedented incentive to create jobs.* *You will recall that no jobs were created in the Fifties and Sixties and Seventies when tax rates were high. No businesses were started. Not Apple, not Intel, not FedEx, not Wal-Mart or Microsoft, Humana, Oracle, Nike, Gap, Southwest Airlines or McDonald’s. With taxes high, there was simply no incentive. Would you try to make a fortune if you knew you’d have to pay taxes on it? I rest my case. UNACCEPTABLE TEACHERS And speaking of income inequality, here’s a rant by a public school administrator who I suspect works rather hard at his job, and deserves a listen. Or just read it here: by John Kuhn Let me speak for all public school educators when I say unequivocally: We will. We say send us your poor, send us your homeless, the children of your afflicted and addicted. Send us your kids who don’t speak English. Send us your special-needs children, we will not turn them away. But I tell you today, public school teacher, you will fail to take the shattered children of poverty and turn them into the polished products of the private schools. You will be unacceptable, public school teacher. And I say that is your badge of honor. I stand before you today bearing proudly the label of unacceptable because I educate the children they will not educate. Day after day I take children broken by the poverty our leaders are afraid to confront and I glue their pieces back together. And at the end of my life you can say those children were better for passing through my sphere of influence. I am unacceptable and proud of it. The poorest Americans need equity, but our nation offers them accountability instead. They need bread, but we give them a stone. We address the soft bigotry of low expectations so that we may ignore the hard racism of inequity. Standardized tests are a poor substitute for justice. So I say to [Education Secretary] Arne Duncan and President Obama, go ahead and label me. I will march headlong into the teeth of your horrific blame machine and I will teach these kids. You give me my scarlet letter and I will wear it proudly, because I will never cull the children who need education the most so that my precious scores will rise. I will not race to the top. I will stop like the Good Samaritan and lift hurting children out of the dirt. Let me lose your race, because I’m not in this for the accolades. I’m not in it for the money. I’m in it because it’s right. I am in it because the children of Perrin, Texas need somebody like me in their lives. Our achievement gap is an opportunity gap. Our education problem is a poverty problem. Test scores don’t scream bad teaching. They scream about our nation’s systematic neglect of children who live in the wrong zip codes. Listen to me, Arne Duncan: It’s poverty, stupid. And that’s not an excuse, that’s not an excuse, it’s a diagnosis. We must as a nation stop assuaging the symptoms and start treating the disease. Let me ask you a simple question: Where is adequate yearly progress for the politician? Will we have 100 percent employment by 2014? Will all the children have decent health care and roofs over their heads by their deadline? But wait. They don’t have a deadline. They aren’t racing anywhere, are they? When will our leaders ensure that every American community offers children libraries and little leagues instead of drugs and delinquency? Lawmakers sent you into congressional districts that are rife with poverty, rife with crime, drug abuse and poor health care, but lawmakers will never take on the label of “legislatively unacceptable” because they do not share the courage of a common school teacher. I say let us label our lawmakers like they label teachers. Let us have a hard look at their data. Let us have merit pay in Congress. Congressmen, politicians, if you want children that are lush, stop firing the gardeners and start paying the water bill. Politicians, your fingerprints are on these children. What have you done to help them pass their tests? President Obama, why don’t you come and join me in a crucible of accountability. We have talked enough about the speck in our teachers’ eyes, let’s talk about the plank in yours. ☞ And by the way? While I claim no expertise here, my own sense is that this is not either/or. Clearly, in many places, it’s been too hard to fire bad teachers, institute best practices, or streamline administrative bloat. That’s why I support Democrats for Education Reform and Harlem Success Academy; why I cheer for Race to the Top and my friend Steve Brill’s Class Warfare. But as is clear from the speech above, and this illuminating review of Steve’s book, there is very much another side to the story. And in my view, both are right: we absolutely need to encourage excellence, competition, and innovation. But we also need to recognize that most public school teachers – including most unionized public school teachers – are entirely deserving of our respect and appreciation. And that we’d better think hard about the income inequality cited above if we truly want a better outcome. (One more thing on this topic, in case you haven’t seen it? Matt Damon’s wonderful clip, with his Mom.)
Have a Great Weekend! September 2, 2011March 25, 2017 START YOUR OWN BUSINESS If you’re thinking of starting a small business, or recently have, check out yesterday’s New York Times profile of my pal Bryan and his free Wicked Start web site. (Full disclosure: I’m a shareholder.) It’s really hard to start a successful business. But Wicked Start could help. COOL SHOES Not cheap, I grant you, but here’s a cool gift for someone – or yourself – made in America and ecofriendly. Want blue laces with red uppers and green heels? My left sneaker says VOTE and my right sneaker says DEMOCRAT. WE THE PEOPLE This soon-to-launch White House innovation will provide a new way to petition the federal government to take action. If your petition attracts enough support, White House staff will review it, ensure it is sent to the appropriate policy experts, and issue an official response. Truly a great idea. Have a great long weekend! Oh! And one more thing: HATE TAXES? 102 THINGS NOT TO DO I was told this was written by a woman named Joan Kyle. “It speaks volumes. If you like this, pass it along and give her credit.” (Or maybe it was written – here – by Stephen Foster? Whoever wrote it, it makes a point.) So, you’re a Republican who hates taxes? Well, since you do not like taxes or government, please kindly do the following. 1. Do not use Medicare. 2. Do not use Social Security 3. Do not become a member of the US military, who are paid with tax dollars. 4. Do not ask the National Guard to help you after a disaster. 5. Do not call 911 when you get hurt. 6. Do not call the police to stop intruders in your home. 7. Do not summon the fire department to save your burning home. 8. Do not drive on any paved road, highway, and interstate or drive on any bridge. 9. Do not use public restrooms. 10. Do not send your kids to public schools. 11. Do not put your trash out for city garbage collectors. 12. Do not live in areas with clean air. 13. Do not drink clean water. 14. Do not visit National Parks. 15. Do not visit public museums, zoos, and monuments. 16. Do not eat or use FDA inspected food and medicines. 17. Do not bring your kids to public playgrounds. 18. Do not walk or run on sidewalks. 19. Do not use public recreational facilities such as basketball and tennis courts. 20. Do not seek shelter facilities or food in soup kitchens when you are homeless and hungry. 21. Do not apply for educational or job training assistance when you lose your job. 22. Do not apply for food stamps when you can’t feed your children. 23. Do not use the judiciary system for any reason. 24. Do not ask for an attorney when you are arrested and do not ask for one to be assigned to you by the court. 25. Do not apply for any Pell Grants. 26. Do not use cures that were discovered by labs using federal dollars. 27. Do not fly on federally regulated airplanes. 28. Do not use any product that can trace its development back to NASA. 29. Do not watch the weather provided by the National Weather Service. 30. Do not listen to severe weather warnings from the National Weather Service. 31. Do not listen to tsunami, hurricane, or earthquake alert systems. 32. Do not apply for federal housing. 33. Do not use the internet, which was developed by the military. 34. Do not swim in clean rivers. 35. Do not allow your child to eat school lunches or breakfasts. 36. Do not ask for FEMA assistance when everything you own gets wiped out by disaster. 37. Do not ask the military to defend your life and home in the event of a foreign invasion. 38. Do not use your cell phone or home telephone. 39. Do not buy firearms that wouldn’t have been developed without the support of the US Government and military. That includes most of them. 40. Do not eat USDA inspected produce and meat. 41. Do not apply for government grants to start your own business. 42. Do not apply to win a government contract. 43. Do not buy any vehicle that has been inspected by government safety agencies. 44. Do not buy any product that is protected from poisons, toxins, etc…by the Consumer Protection Agency. 45. Do not save your money in a bank that is FDIC insured. 46. Do not use Veterans benefits or military health care. 47. Do not use the G.I. Bill to go to college. 48. Do not apply for unemployment benefits. 49. Do not use any electricity from companies regulated by the Department of Energy. 50. Do not live in homes that are built to code. 51. Do not run for public office. Politicians are paid with taxpayer dollars. 52. Do not ask for help from the FBI, S.W.A.T, the bomb squad, Homeland Security, State troopers, etc… 53. Do not apply for any government job whatsoever as all state and federal employees are paid with tax dollars. 54. Do not use public libraries. 55. Do not use the US Postal Service. 56. Do not visit the National Archives. 57. Do not visit Presidential Libraries. 58. Do not use airports that are secured by the federal government. 59. Do not apply for loans from any bank that is FDIC insured. 60. Do not ask the government to help you clean up after a tornado. 61. Do not ask the Department of Agriculture to provide a subsidy to help you run your farm. 62. Do not take walks in National Forests. 63. Do not ask for taxpayer dollars for your oil company. 64. Do not ask the federal government to bail your company out during recessions. 65. Do not seek medical care from places that use federal dollars. 66. Do not use Medicaid. 67. Do not use WIC. 68. Do not use electricity generated by Hoover Dam. 69. Do not use electricity or any service provided by the Tennessee Valley Authority. 70. Do not ask the Army Corps of Engineers to rebuild levees when they break. 71. Do not let the Coast Guard save you from drowning when your boat capsizes at sea. 72. Do not ask the government to help evacuate you when all hell breaks loose in the country you are in. 73. Do not visit historic landmarks. 74. Do not visit fisheries. 75. Do not expect to see animals that are federally protected because of the Endangered Species List. 76. Do not expect plows to clear roads of snow and ice so your kids can go to school and so you can get to work. 77. Do not hunt or camp on federal land. 78. Do not work anywhere that has a safe workplace because of government regulations. 79. Do not use public transportation. 80. Do not drink water from public water fountains. 81. Do not whine when someone copies your work and sells it as their own. Government enforces copyright laws. 82. Do not expect to own your home, car, or boat. Government organizes and keeps all titles. 83. Do not expect convicted felons to remain off the streets. 84. Do not eat in restaurants that are regulated by food quality and safety standards. 85. Do not seek help from the US Embassy if you need assistance in a foreign nation. 86. Do not apply for a passport to travel outside of the United States. 87. Do not apply for a patent when you invent something. 88. Do not adopt a child through your local, state, or federal governments. 89. Do not use elevators that have been inspected by federal or state safety regulators. 90. Do not use any resource that was discovered by the USGS. 91. Do not ask for energy assistance from the government. 92. Do not move to any other developed nation, because the taxes are much higher. 93. Do not go to a beach that is kept clean by the state. 94. Do not use money printed by the US Treasury. 95. Do not complain when millions more illegal immigrants cross the border because there are no more border patrol agents. 96. Do not attend a state university. 97. Do not see any doctor that is licensed through the state. 98. Do not use any water from municipal water systems. 99. Do not complain when diseases and viruse; that were once fought around the globe by the US government and CDC, reach your house. 100. Do not work for any company that is required to pay its workers a livable wage, provide them sick days, vacation days, and benefits. 101. Do not expect to be able to vote on election days. Government provides voting booths, electionday officials, and voting machines which are paid for with taxes. 102. Do not ride trains. The railroad was built with government financial assistance.
Poor People Have a Tough Time Networking September 1, 2011March 24, 2017 DISCRETIONARY INCOME – II Dale McConnell: “Sorry, still not buying it. I don’t have a good cite on this, but I’m sure these are the right – or nearly the right – numbers. The 10-year deficit is $10 trillion, repealing the Bush tax Cuts would generate $4 trillion. Problem is, no one wants to do that, they only want to repeal on the earners making over ~250K, that would generate much less.” ☞ No one says that going back to Reagan’s tax rates on dividends and capital gains (say) or Clinton’s rates on interest and “earned” income (say) would by itself close the entire budget deficit. But note that in a world of 2.5% growth and 2.5% inflation (say), you could have a $750 billion annual deficit without in fact growing the National Debt at all, relative to the economy as a whole. Both would be growing at 5%. We need to do better than that. Over time, we need to shrink the debt relative to the economy. That’s what we did from 1946 to 1980, from a ratio of 121% in 1946 all the way down to 30% in 1980 when Ronald Reagan took over. (He then spiked it sharply higher, as did George W. Bush, handing it off to Obama at 100% and soaring.) But – to repeat – if for the next ten years we ran $750 billion annual deficits in a world of 2.5% inflation and 2.5% growth, the debt would not have grown relative to the economy as a whole. Both would have been growing at about the same rate. So a big chunk of the $10 trillion deficit hole that Dale is trying to fill – $7.5 trillion in this example – doesn’t necessarily have to be filled. Taxes and spending cuts do not need to make up the whole $10 trillion. It’s okay to have some deficits if the economy is growing. And we need deficits to get the economy growing (just as we needed deficits to win World War II). Indeed, if the annual deficit stayed constant at $750 billion for a century as the economy grew at 2.5% (plus another 2.5% inflation), the National Debt – nearly $15 trillion today – would grow to $90 trillion . . . but the GDP – also roughly $15 trillion today – would, via the magic of compounding, grow to $2 quadrillion. So the debt would then equal just 4% of GDP. Like a $14,000 mortgage on a $280,000 home. The key here . . . and the heart of the whole debate . . . is not to focus on the deficit in the short run, but to put our people to work building an America that is modern, efficient, healthy, well-educated, competitive, and energy independent. THAT will secure our future and solve our financial problems, jump start the economy and replace the outflow of unemployment benefits with the inflow of payroll tax receipts. THE DIVIDE Ken Doran: “My summary of this issue: Wealthy conservatives seem to believe that they have what they have in spite of a government that has in recent generations been somewhat activist and equality oriented (actually only very moderately so by developed world standards, but that’s by the by). Those who do think that are wrong; their wealth on the contrary is dependent on and largely derived from the strengths of an equality-oriented society whose government is activist when it needs to be. Even by their own narrow self-interest, and assuming no concern with the greater good of society, those wealthy conservatives are making a very serious blunder in trying to destroy the institutions that gave America its exceptionalism.” PROVERBS John Leonarz: “Digging around in Proverbs for another purpose, I came on this one, Proverbs 29:7, which seemed pertinent to yesterday’s column: ‘A righteous man knows the rights of the poor; a wicked man does not understand such knowledge.’ Right out of the Bible – from 3000 years ago!” POOR PEOPLE HAVE A TOUGH TIME NETWORKING This essay by Joe Queenan speaks to those, like Stephen N. yesterday, who think “the lower class of income earners pay far less than their fair share of taxes.” (Stephen wrote back to say I had taken his comment out of context – that his point was that the rich should only be taxed more if we also raise taxes on low-income folks because “the lower class of income earners pay far less than their fair share of taxes.” But to me, that still seems to mean he thinks lower income folks are getting too good a deal and should be taxed more heavily.) Tomorrow: Starting Your Own Business
Whence the Middle Class August 31, 2011March 24, 2017 TAX THE POOR Stephen N.: “The lower class of income earners pay far less than their fair share of taxes. They should be taxed more.” DISCRETIONARY INCOME Barry: “Manish Bhatia didn’t quite have the right facts yesterday, though I agree with the sentiments. In 2008, the top 10% earned 46% of income and paid 70% of taxes – which is okay by me, but not by the ultra right. Here are some tables that will keep us from being labeled liars.” ☞ Helpful, except you missed one key word in Manish’s post: discretionary. (You may have missed this because it wasn’t there.* Now it is.) Discretionary income is what folks have left after the necessities have been paid for – basic food and shelter, shoes, the utility bill. Most people have relatively little discretionary income . . . even after working all day at jobs the wealthy want done but would rather not do themselves. For those at the top, most of their income is discretionary. “Well, tough,” some people will argue: “Low-income folks should live in the street, if need be, or malnourish their children (or proffer them for adoption), before we ask the best off to pay Reagan-era taxes on capital gains or Clinton-era taxes on income.” I am not one of those people. And, in fairness, I don’t think anyone thinks he is one of those people. Yet aren’t those who call for “tax cuts on the job creators” and a cut off of unemployment benefits – and other cuts to the social safety net – arguing just that? Somehow they manage to keep from allowing themselves to connect the dots. But that’s what they’re arguing: that the busboy who clears the dishes at their country club has it too easy. That if he should someday need Social Security (that Rick Perry wants to dismantle), tough. He should just get rich and join his own country club, as they did. I see it differently. I’d prefer to see no tax levied on the first dollars one earns that cover the costs of basic food and shelter (nothing fancy, but, yes, a refrigerator, too, and the electricity it takes to run it, and other such things); but then some reasonable graduated income tax on the remainder. Which was pretty much what we had under Clinton when we balanced the budget and created 23 million new jobs. *The original post said “disposable” income, which actually means all after-tax income. UNLEASH THE PLAGUE Karen Tiede: “Re Sarah’s note yesterday: ‘And it is important to point out that if [my best friend, the low-paid nursing-home worker] and many people just like her were to disappear, lots of very rich people would suffer. And there is great likelihood that they would suffer physically. Something to think about.’ Essentially, this is what happened in Europe as a result of the plague. Poor people died and there was no-one to do the physical labor that made the wealth flow to the people who owned the land that made them wealthy. Enter the middle class: a direct consequence of the transfer of power that happened when lots and lots of poor people died from the plague. From Wikipedia: In Western Europe, the sudden shortage of cheap labour provided an incentive for landlords to compete for peasants with wages and freedoms, an innovation that, some argue, represents the roots of capitalism, and the resulting social upheaval “caused” the Renaissance, and even the Reformation. In many ways the Black Death and its aftermath improved the situation of surviving peasants, notably by the end of the 15th century. In Western Europe, labourers gained more power and were more in demand because of the shortage of labour. In gaining more power, workers following the Black Death often moved away from annual contracts in favour of taking on successive temporary jobs that offered higher wages.[21] Workers such as servants now had the opportunity to leave their current employment to seek better-paying, more attractive positions in areas previously off limits to them.[21] ☞ Short of unleashing the plague, what would you say to things like child-labor laws and the 40-hour work week and “weekends,” which tighten the supply of worker-hours? What would you say to reasonable minimum-wage laws and a social safety net and collective bargaining and a progressive income tax and an inheritance tax? If you were a modern day Republican – the Governor of Wisconsin, for example – you would say: a pox on such things. They just interfere with the free market and impede the glorious work of the job creators.
The Divide – II August 30, 2011March 24, 2017 Picking up from yesterday’s discussion . . . Sam Kahn: ‘Agree 100 per cent with Anne. My wife is a recently retired school teacher in New Jersey who sends and receives emails from other retired or active school teachers in New Jersey. Literally from day one of the Obama Presidency, emails have been sent around with the most outrageous claims and charges about the President. For many, President Obama is the Manchurian candidate. They have given him credit for zero accomplishments and blame him for everything wrong that happened. And these are school teachers. I’m not talking about one or two people. Lots of them.’ Manish Bhatia: ‘Re: ‘Funny how the richest 1% pay about 30-40% of the taxes and the poorest 40% pay about 3% of the taxes. The rich are already paying a lot more than they should be’ . . . I had heard third this argument from a Sr exec of the start-up I worked for. His statement was something like – ‘top 10% people pay 80% of the taxes’ (adding that it was very unfair). My answer was, ‘if top 10% made 90% of the discretionary income, why was it wrong for them to pay 80% of the taxes?’ He literally didn’t know what to say. In America, income disparity is becoming similar to third-world countries. The biggest problem is how Republicans are able to get people to vote against their own interests.’ Sarah Johnson: ‘I have to tell you something. Feel free to use it as you like, or not, in your blog. Every time I read or hear some version of ‘I made my money, I worked hard, I deserve to keep it…those poor people are poor because they don’t work hard…if they knuckled down they’d be rich, too…’ and the implication that the poor are nothing more than backdrop to these rich people’s lives and are completely unimportant, I am astounded. Not at their privilege, at their greed nor even at their mean-spiritedness. I have seen lots of that over the years – even as a child – and was ‘fortunate’ enough to get a very hands-on, broad education about matters of class, race, and economics. What astounds me is their ignorance and their shear lack of understanding of how even their own world works. . . . My best friend – and my oldest friend – is brilliant. She is intellectually curious. Considering she has a GED that she got in preparation for dropping out of high school and moving far away from her family for reasons of self-preservation at 16 and she never had the time nor funds to complete college, even at a community college, she is extremely well-educated. At this point in our lives, we know that we would not be friends if we hadn’t become friends when I dangled a huge rubber tarantula in front of her from a staircase and then ‘made up’ for it by asking her if she wanted to play Old Maid when I was 7. We have managed to not let class and economics get in the way of our friendship – and, believe me, we have had to baldly discuss these things because we are from very different backgrounds in many, many ways. . . . She works harder than most people I meet and she is very good at what she does. She is also woefully underpaid for her work. She is a caregiver at a nursing home. She has managed a house at a facility for developmentally disabled adults. She has worked as a private (in home) caregiver. She is not an RN (no college degree, remember?) but she has several certifications in pharmaceutical dispensing, first aid, emergency response, and other long-term care skills. She has stayed up with people as they are dying. She has maintained friendships and care for people who were in her wing or house of the facility and helped them maintain their continuity as they move from one level of care to another and adjust. She has saved people’s lives and alleviated pain. She has helped people keep from being scared. She has kept her eye on people’s medical files and charts and prevented accidental overdoses or missed medication and alerted doctors to changes in their patients that they might have missed. . . . All her working life so far, large parts of our conversation are about people she has cared for and cares for and when I visit her, I know that I will have to spend at least half a day at her work meeting people she cares for and that I will be hearing lots from them about how much they care for her as well. They will ask me things about our childhoods. They will ask me if I think she’d like their nephews/grandsons/sons (as we’ve gotten older) because they want to do something nice for her. She is poor. When her hours get cut, she has to rely on public assistance even before layoffs – that’s how poorly paid she is! She is ashamed of that, even though she’s been paying into it with every salary check, because people like these I’ve-got-mine-screw-you folks constantly tell her she isn’t worth as much as they are. She deserves much, much better and not just because she is my best friend and I love her. And, it is important to point out that if she, and many people just like her, were to disappear, lots of very rich people and not-so-rich-but-still-people-who-have-more-than-they-need would suffer a lot. And there is great likelihood that they would suffer physically. Something to think about.’
The Divide August 29, 2011March 24, 2017 IRENE What am I going to do with all this food? MORE KEN FEEDBACK Anne Vivino-Hintze: “I’m over 60, too, and I sometimes feel like Ken does – like giving up – but not because of Obama. I have lived in my rural Republican township in a Republican county for over 35 years. The vitriol towards Obama that erupted as soon as he was elected surprised me. My car displays an Obama bumper sticker and a born-locally friend in her 80s told me that she sometimes fears for my safety because of my bumper sticker. My neighbors are good folks who work hard for very modest wages and help each other out. They would benefit from Democratic policies. But they are blinded to that by the vitriol. The local cable company carries Fox but not MSNBC. The Republican owner says MSNBC would cost too much. The most erroneous, venomous emails about Obama are quickly and enthusiastically shared and believed. When I counter with facts from Snopes or FactCheck, I am removed from those email lists. I have talked with Democrats who are furious with Obama but who also say they don’t personally know any Republicans. If they really got to know their Republican neighbors, they would be amazed at all Obama has accomplished, while maintaining his dignity and civility, in the face of a wall of hatred and misinformation.” THE DIVIDE Truly, as Anne notes, there is such a divide. The world according to Fox (“the wealthy are job creators”; “by far the vast majority” of Bush’s tax cuts went to “people at the bottom end of the economic ladder”) versus the world according to facts (after Clinton raised taxes on the wealthy, 23 million jobs were created; since Bush lowered them, few jobs have been created; by far the vast majority of Bush’s tax cuts went to people at the top of the economic ladder). Here’s how many on the other side see it: a comment on a post that criticized the President for compromising too much. It shows – not that we didn’t already know – how sharply divided the country is. Steve a 44-y-o from Carmichael, CA: “Typical liberal/socialist nonsense. However, [the post is] right in one aspect…Obama is looking more like Carter every day. But it’s not because he won’t stand up to Republicans, it’s because he is a LIBERAL/SOCIALIST. LIBERAL/SOCIALISTs are always weak because they are always wrong. I have never met a liberal that could objectively defend one of their political positions using reason or logic. You guys still are stuck in broken record mode chanting over and over how the rich don’t pay their fair share. Define rich. Obama would have you think that anyone who has more money than you is rich. Funny how the richest 1% pay about 30-40% of the taxes and the poorest 40% pay about 3% of the taxes. The rich are already paying a lot more than they should be. Big shocker here…it’s their money, they should get to keep it. Funny how you want the people who actually work to just give their hard earned money to people who refuse to work. Do you have any facts at all in that liberal brain of yours? You do realize that half of the people in the country pay ALL of the taxes and half of the people pay none! Guess which half vote for socialist/democrats? That’s right..socialist welfare slugs vote for democrats and hard working patriots vote for conservatives. You are always wrong. When are you gonna figure it out. Liberals think act and reason like little children.” ☞ To many of us, this seems profoundly wrongheaded. Where Steve sees lazy people refusing to work and hedge fund managers sweating to earn every penny of their $100 million – by creating tremendous value – we liberals tend to see the lawn guy working all day for eight bucks an hour while his wife cleans hotel rooms for another eight, struggling to make a good life for their kids. Or we see people desperate for work, lining up in jackets and ties for a five-hour wait in the Atlanta sun for an interview. And we see Wal-Mart heirs on yachts who never worked a single hour for their fortunes. We do NOT begrudge them those fortunes; we just think it would be better if we went back to the kind of taxes on wealth that prevailed under Ronald Reagan (second greatest man ever to walk the Earth). And we agree with Warren Buffett (whose reasoning ability may be beyond that of “little children”) that it’s nuts for him to be in a lower tax bracket than his receptionist. THE DIVIDE – II Jeff Cox: “I suspect I would like Rachel Maddow, and I almost always agree with her; but I can never watch one of your links all the way through because she takes too long to make a point, and I do not share her level of interest in the details. Ken who does not care anymore probably does not watch her either. However, Ken – and anyone else of reasonable progressive sensibilities – should not miss the silver lining of the polarized political discourse today. Once upon a time, reasonable people had to invest time weighing the candidates, choosing the one who might be better for the country. We had to research positions and weigh pros and cons. That is all over now. I just vote Democrat and go on. Sure, I would like more moderation, more compromise, more concern for others’ values, but the two parties are really not much alike right now, and one is much better for me. As for the president’s compromising, that is his job. As far as I can tell, he is usually the smartest person in the room, and he plainly does care. He spends time on pros and cons, so I’m happy with whatever he recommends.” CHIN UP Dave Davis (who also inherited the happy gene): “We humans are sure a negative lot. But, that’s nothing new, right? ‘Times are bad. Children no longer obey their parents, and everyone is writing a book.’ – Marcus Tullius Cicero (106 BC – 43 BC). More people need our happy gene. It’s hard to imagine not being completely – and deliriously – optimistic about the future. We have an amazing foundation on which to build an incredible America. What our pioneer fathers and mothers would have given for electricity, indoor plumbing, air conditioning, paved roads, railroads, computers, the Internet and grocery stores stocked with everything imaginable! If they were to come back today and see our wealth of resources, they would laugh at the very thought of our being discouraged and glum about the future. That’s the spirit we need right now.” ☞ Indeed. When everyone joins the fight to modernize our infrastructure, achieve energy independence, and spur innovation, we’ll have even more to feel hopeful about. There shouldn’t be an unemployed construction worker anywhere in America.
You Respond To Ken August 26, 2011March 24, 2017 Peter Kaczowka: “To Ken and others who say ‘politics stink,’ I say ‘hold your nose and vote.’ If it takes two hands, bring a clothespin.” Kathryn Lance: “I too am over sixty. I don’t have millions, and if the right-wing thugs succeed in doing away with Social Security and Medicare I’ll be eating cat food and my cats will be eating mice. I STILL LOVE AND BELIEVE IN OUR WONDERFUL PRESIDENT. Seeing how many so-called liberals, like your rich friend in today’s column, have given up on him depresses me to tears. Have they not noticed that he has been thwarted and dissed at every turn, not only by the opposition but by most of the media? There is so much to say in his defense, but why should he have to be defended? He should be thanked and blessed each day for all he has accomplished against such great odds and unimaginable disrespect and vilification.” Chuck Burgner: “Save the money millions I don’t have, Ken expresses my sentiments to the tee. I too donated to Obama’s campaign and volunteered time to his election at our local Obama office. And often I ask myself ‘why I did it?’ I wrote to Obama several months ago and told him of my disappointment and that he was not the same man I voted for.” ☞ You did it because Obama stood – and stands – for almost all the same things you do (science, reason, moderation, compassion, shared responsibility, a strong social safety net, health insurance for all, a woman’s right to choose, equal rights for people like me, a progressive Supreme Court, membership in the community of nations, investment in education, innovation and infrastructure, clean air and water, effective government regulation) and because he was – and remains – a man of astounding talent and temperament. And because the alternative was a heroic but reckless man, 894th in is class of 897, who chose as his understudy a woman who got a D in economics and couldn’t name any newspapers or magazines she read regularly. Rick: “Please forward this to Ken: I too get tired. I too have been a bit disappointed as our President keeps his cool while his critics howl into the wind. But if we don’t care, who will? Who will care for the inner-city youth in need of a quality education? Who will make sure impoverished expectant mothers receive quality medical care for their unborn babies? Who will assure dignity is available to EVERY American? I left the Republican party two years ago as I finally opened my eyes to the truth that THEY DON’T CARE! They give lip service to win elections while spinning public policy to make the rich wealthier and the poor, more impoverished. They still laugh at racial jokes, bully gay kids and expect the inner-city kids to fix their own problems. I too am tired, but mostly of their rhetoric. We must fight, and if not for victory in our generation, then for those who come after us. Ken, true happiness will only come by living our lives for other people. The GOP must be the largest group of the most unhappy people in the world. If I were not so mad, I would feel sorry for them.” Kevin Kotowski: “If it’s any consolation, I hear Ken, too. There are times (many times) over the last couple of years when I wanted to wash my hands of politics completely. Does Obama disappoint us occasionally? Of course. But I believe we as a country are in far better shape than if McCain/Palin had won. The Democrats’ problem isn’t that they’ve accomplished little, it’s that they aren’t getting the word out and letting the country know all they HAVE done. Your list of accomplishments under this President was inspiring and so I forwarded it on to my friends both Democratic and Republican (many who are disgusted with their own party’s shenanigans) and posted it on my Facebook page. Maybe it’s up to us to yell a little louder about what we Democrats have accomplished.” Jim: “Re: ‘Disappointed Ken’ yesterday, I liked your response but feel you missed three useful tacks: **** 1. The problem isn’t evil crazy Republicans and cowardly Obama. It’s evil crazy Republicans and cowardly media, which is intimidated (by the right’s nonstop hollering about supposed ‘liberal bias’) into under-reporting his victories. Your list of Obama’s good deeds barely gets started. Few are aware of it all because the media downplays it. And so liberals are ‘disappointed’ because they’re poorly informed, drawing their conclusions from the results of a small handful of big, spotlit fights. **** 2. Tons of your kindred spirits who aren’t 60 year old millionaires will suffer if Republicans win. I understand the urge to give up on low/middle class Republicans foolish enough to clamor for policies counter to their own interests. But why abandon the rest of us, who do not yet ‘have ours?’ Obama may have disappointed Ken (though he’s done a better job than Gore or Kerry would have done, and look what happened when we didn’t fully support them), but he hasn’t turned away from it all in disgust. So who’s the coward? If Ken is absolutely resigned to stop caring, then at least throw a big wad of dough at the Democrats as you leave, as a gesture toward the rest of us who are too young and too poor to disconnect from this insanity. **** 3. The right’s persistent, and this exasperates the left into giving up. Pushy immoderate forces always have an advantage. For example, that’s why our gun laws sharply diverge from majority preferences. And it’s why two year olds throw tantrums, forcing aggravated mothers to give them their chocolate cake. By pulling yourself out of the game, Ken accomplishes their agenda to a tee. You hand them their cake. This is a binary tug of war, and one side will never let go of the rope. You may spitefully yell ‘ALL of you can burn in hell!’ as you walk away, but don’t fool yourself. You are granting victory to one side – the side you consider ‘evil and nuts’.” ☞ For the record: I think ‘evil’ is way too strong. But ‘selfish’ and ‘bullying’ and ‘misguided’ sometimes fit. Mike M (in response to an earlier column): “But nobody knows the Republicans are doing this [terrible] stuff, unless they watch what’s her name (the lesbian you are always linking to, I’m not knocking her, I know several and like them) but they know she is liberal so they don’t – they have fair and balanced FOX NEWS and viewers think they are getting the truth. They think the other station is biased. Believe me, they think FOX is telling the truth. I used to watch them and never suspected they were lying until I started reading up on the facts. (Granted I watched Fox because of the really hot women, which I am sure is one strategy to hook people in.) The Dems gotta wise up and get a TV station with even better looking women, and guys too . . . say it is even more fair and balanced and get people to watch so the truth can be exposed. You don’t need a biased station, just one to expose the lies.” GOOD NEWS Here’s one piece of bright news (about 8 minutes into the clip): the Tea Party is now less popular than 23 of the 24 groups rated in a recent poll. They finished dead last behind atheists, gays, Muslims, and 20 others. So maybe – though loud – they are not winning the argument.
Dinner With Warren Buffett Also: SIGA, UTHR, CVV August 25, 2011March 24, 2017 FINDING THE ENERGY Ken: “With respect to yesterday’s post – “The Most Important Election Ever” – how do you find the energy to keep going in spite of it all? Because politics stinks. I know, you will say we have no other alternative. Or do we? I’m thoroughly disgusted with it all. The Republicans are evil and nuts, Obama and the Democrats are cowardly. I fantasize that even if the Republican 2012 ticket were Perry/Bachmann, I’m not going to vote for Obama again. I know, you have a whole list of supposed ways he is just terrific peachy-keen but I’m sick of him. Read the liberal blogs. Why do the Republicans slavishly pay attention to their base and Obama expects to TAKE ME FOR GRANTED? I thought we were getting another Roosevelt. HA HA. Sorry – I’m outta here. I don’t have kids, I’m over 60, and I’m TOO OLD TO CARE ANYMORE. Let the country fall apart now. I’m well off, I have my millions, I should have been a Republican anyway due to my assets and income.* No, I won’t turn Republican now, but I will stop caring for Democrats. Every year I voted and donated and got my friends all fired up, and every year things just got worse and keep getting worse. I. Just. Don’t. Care. Anymore. I have mine, who cares about anyone else? Sounds awful but that’s what I feel right now. I gave Obama the benefit of the doubt the first time, the second time, the third time, on and on, and now I’m broken. He’s not anywhere near the president I wanted. His fancy words mean nothing.** He gives away the farm and calls it bipartisanship, then they come back and get more out of him.” ☞ Too old to care anymore? It sounds as though Ken cares very much, or he wouldn’t be so upset. I told him that when I replied, continuing: “You will come back – I know you will. And if you do look at the accomplishments, you’ll find that, though blocked at every turn by the opposition, they are very real. Universal health insurance paid for by a tax on income above $250,000? Sounds pretty Rooseveltian to me. And if women are a constituency Democrats should not take for granted, how about tripling their representation on the Court or signing the Lily Ledbetter Fair Pay Act or (moving from the lofty to the nitty-gritty) removing the co-pay on birth control coverage? If gays and lesbians should not be taken for granted, how about more federal progress for LGBT Americans in the last two and a half years than in the prior 250 years combined? (This is actually one I keep track of.) If environmentalists are a core constituency, how about more than doubling the CAFE standards and putting unprecedented resources into seeding alternative energy? Working families struggling to make ends meet? How about making college loans more affordable by cutting out the banks? How about knocking $1,000 off the payroll tax and fighting successfully to extend unemployment insurance? How about launching the Consumer Financial Protection Bureau? How about 16 tax cuts for small business? Reluctant warriors? How the sensible way we’ve handled Libya? How about putting major defense cuts prominently on the agenda? How about rejoining the community of nations and regaining our standing in the world? “I grant you, there is SO much more to do. And that and much of what was done fell short of the ideal. But the reason you and I haven’t gotten all we wanted is the opposition. So it’s EASY to be motivated – because the stakes are SO high and the choice between the two parties is SO stark. “Still, I have no doubt you’ve earned a breather. We will welcome you back the minute you’re ready!” And then I sent a brief follow-up. (Well, I couldn’t resist.) “Now, don’t laugh,” I wrote, “but how about chipping a sliver off those millions and treating yourself to dinner with me and Warren Buffett at [a fancy restaurant] in New York at the end of next month?” After all, Buffett’s over 60, too, and is wildly disappointed with the state of affairs, as Ken and I are, but he thinks that a good Democratic result in 2012 is worth working for. Fingers crossed that Ken will join us. (Me-mail me if you want in, too.) As I say, he obviously cares deeply. SIGA Hang in there. More good news. UTHR Guru writes: “Treprostinil didn’t work. A real surprise as there were multiple previous trials that did. They have about $650 million in free cash (more than a quarter of their market cap) and plan to do share buybacks. They will file for Freedom M oral treprostinil in 1Q 2012 and they cited a section of the FDA guidance whereby they should be able to get approval. They will get approval for IV treprostinil in Japan later this year. Sales continue to grow, but R&D will remain steady. So bottom line: You’re paying about 10 times earnings (after netting out the cash) for something that is growing 15-20%. Their drugs treat PAH – a life-threatening disease. You MUST be on these drugs. This is an attractive price for a stock that can grow independent of whether we are in a recession or not. Deutsche Bank and Oppenheimer both see $53 or more as fair value, though Oppenheimer writes, ‘given [today’s] disappointment, we don’t see meaningful near-term catalysts for UTHR to reach fair value.” ☞ I’m holding mine here. CVV Aristides’ Chris Brown: “CVV jumped yesterday after a positive write-up from an individual on Seeking Alpha. Last quarter’s earnings of 14 cents per share were better than the single analyst estimate of 9 cents, but lagged the prior (on a sequential basis) quarter of 22 cents (excluding an inventory write-down in the prior quarter). The company has had to hire a lot of people to support its incredible growth. Above $16, the stock now trades at more than 20 times my expectation of next 12 month earnings in the 60-70 cent range. . . . Graphene is an amazing substance, and CVV is the purest play on this substance. However, the easiest part of the trade—the great earnings ramp following the previously-announced new orders ramp—has largely played out. We have kept a small portion of our position as a long-term speculative bet on increasing uses for graphene, and the possibility of the company winning one or more large, game-changing orders. We are not usually growth-stock investors, so I don’t want to own a big position in any high multiple stock at a time when the regional manufacturing indices all seem to suggest we are entering a recession. It’s possible that the survey-oriented data are unduly pessimistic here, as a result of the debt ceiling debate, but they are the best August data we have so far, and, anecdotally, a couple of friends I trust have said businesses are pulling back.” ☞ Suggested here six months ago at $11.90 and in March at $10.10, CVV closed at $17.30 last night. In this market, it’s hard to argue with a 43%, let alone a 71%, gain. It could make sense to sell some, which would make you happy if it goes down sharply from here (buy it back?) and happy if one day it sells for twice today’s price (you didn’t sell it all!). I’m holding most of mine. *Except that in many respects, people with high assets and income tend to fare better under Democrat leadership because the stock market and economy tend to do so much better. –A.T. ** They seem to have meant a lot to much of the world, and may even had played a role in the Arab Spring, as suggested Tuesday. – A.T.
“The Most Important Election of Our Lifetime” No -- Really August 24, 2011March 24, 2017 My laundry basket fell off a chair and a bunch of too-be-foldeds spilled out onto the carpet. The earthquake of 2011. What’s next? Locusts? (No: Irene. Uh, oh.) TOO NEGATIVE Steve: “We are witnessing the end of empire. It makes you want to cry that, over decades, The Powers That Be have made us a massive debtor nation rather than a massive creditor one. No one on scene has the integrity, power, or guts to change that path, only hasten the decline with ‘kick the can.’ ” ☞ Well, President Clinton was able to halt that “over decades” thing. And it was not The Powers That Be that caused this mess so much as, simply, the leadership of Reagan, Bush, and Bush – and their allies in Congress and at Fox. So the solution is not despair or cynicism, it’s to work enthusiastically to keep as much political control as we can, because it’s fixable if people of good will and common sense are allowed to govern. Bill Clinton did it; against truculent opposition, Barack Obama is doing it. “THE MOST IMPORTANT ELECTION OF OUR LIFETIME” They say it about every election – “this is the most important election of our lifetime.” And then they acknowledge they say it about every election – “I know: we always say that.” And then they add, with conviction if a little sheepishly, “but it really is.” Which could only compute if elections were becoming progressively more important. And here’s the thing: they are. Or at least I think two arguments make that case. First is that the candidates seem to grow ever further apart. The more divergent their views, the more important the choice. Coke versus Pepsi? Who cares. Coke versus Pepto-Bismol? A more important choice. Second is that the human story, which used to creep glacially, races ever faster. After 5 billion years of planetary evolution, the sustainability of our little species comes down to the next few decades. As the pace speeds up, and the stakes get higher, so does the importance of getting it right. Andrew Jackson could not launch nuclear winter nor was he charged with preventing it. Environmental catastrophe? Not an issue until a few decades ago. Not to mention our fragile, globally connected economic system . . . or cyber attacks. When you have one Party whose candidates tend to believe in evolution and climate change . . . and another whose candidates hold prayer sessions to keep from taxing the rich to provide health insurance to the poor (because presumably that’s what Jesus would have done), it’s important which Party wins.