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Economic forecast: 17 months of fog and drizzle


"Yet we are taught to admire the second-hander who dispenses the gifts he has not produced above the man who made the gifts possible. We praise an act of charity. We shrug at an act of achievement."  The Fountainhead

It remains a mystery, the contempt that the dispensers of wealth have for the creators of wealth. Their anger is palpable and the rhetoric is recklessly unkind. It would seem to be politically risky, but it rarely is.  We have somehow become inured to it.

Few, among us, associate achievement with ambition, effort, talent and aversion to risk. We pacify our consciences by regarding success as a form of mischief, equal parts greed and policies that favor the wealthy.  No one says exactly how the policies favor the greedy and the wealthy.  Much like global warming, the evidence doesn't always support the conclusion. Yet, no serious examination of the thesis ever takes place. 

If greed alone could generate wealth, one would expect to see a great deal more wealth. There is no shortage of greed. If the rules so favor the creation of wealth, why is there an endless need to regulate and mandate? Why do we try so hard to manipulate the outcomes?

Government is the second hander of last resort.  Not content to simply redistribute existing wealth, they print money to distribute future wealth. Here the plan breaks down. Like all Ponzi schemes, it relies on the next wave of investors. Specifically, it relies on the next wave of tax revenue.  But tax revenue depends on profit and investment and investment is becoming, well, less profitable. As the prospects for success recede, the talented and creative turn their attention from the creation of wealth to the protection of wealth.

Banks pursue wealth by lending money.  They protect wealth by hoarding it.  Corporations pursue wealth by hiring people. They protect wealth by laying off.  Entrepreneurs embrace risk to create wealth. They avoid risk to protect wealth.

The administration seems content to reassure us that the plan is working just as they reassure us that that Social Security is solvent because of the Trust Fund.  As much as we want to hear a comforting lie, we know that the Social Security Trust Fund couldn't get you on a City bus.  It is composed entirely of taxes yet to be levied. And we know the economic plan is not working either.

Thomas Sowell recently observed that the economic facts all weigh in favor of the republicans.  As usual, they seem unable to weave them into a plausible argument.  This economy is going nowhere until investors and entrepreneurs can look three years out and see some reason to undertake risk. Entitlement reform, spending restraint and tax moderation for a start.  

To spur investment before the next presidential election, the investors need some hope. It could come in two ways:  1) President Obama could say "I made some policy mistakes." It would give him an opportunity to lead a bipartisan effort at tax reform. 2) Some Republican could surface as the voice of economic vision in the same way and with the same passion as Jack Kemp did.  Neither of these is likely to happen.  Buckle your self in. It's going to be a rocky seventeen months. 



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Anne Frank's diary; a lesson for leaders


I see the world being slowly transformed into a wilderness.  I hear the thunder that will one day destroy us, too.  I feel the suffering of millions.  Anne Frank

How could a fourteen year old girl, captive in an attic in Holland, have understood so clearly, the cataclysm taking place across Europe. Locked away for over two years, a mere adolescent, she still managed to accurately discern the state of world affairs. How did this occur? 

The answer is somewhat instructive.  Anne Frank was a good listener and  a good observer.  Although she wasn't getting the 'fairness doctrine' version of the events, she somehow recognized the larger truth. At fourteen, secluded and hiding in an attic with fewer than a dozen people who comprised her "world."

American politicians are always talking; Bill Clinton, Newt Gingrich, Barack Obama, Sara Palin or Al Gore. President Obama is so comfortable talking that he sometimes prefaces his opinion by acknowledging that he isn't really all that familiar with the facts.  He ventures an opinion nonetheless.  He responded as such to the Professor Gates controversy, in defense of Obamacare provisions that he was unfamiliar with and in recent statements about the Wisconsin union debate.  The president admitted that he hadn't followed it closely, yet he still had some well defined opinions..  Eric Holder was similarly comfortable suggesting legal challenges to a law in Arizona that he willingly admitted that he hadn't read.

Anne Frank demonstrated that a child can listen, observe, examine and draw the right conclusions.  She correctly interpreted the events about her; the talk of the adults, the looks on their faces and the fact that their lives depended on hiding.  Politicians think their moral compass is so unerring that listening, considering and evaluating evidence is a waste of their precious time.  They feel somehow capable of divining the truth by force of their personality.  And they are wrong.

Historically, political figures have made monumental and sometimes intentional misjudgments about both evidence and public sentiment. Lyndon Johnson, Richard Nixon, Neville Chamberlain and George W. Bush are just modern day examples.  War seems to bring the denial impulse to the surface..  Barack Obama seems anxious to join the club.  

Moral certitude should result from a rigorous examination of the available evidence.  Too often, the moral certitude comes first.  It is simply the justification for ignoring inconvenient facts.  The Mideast is growing increasingly chaotic and we edge closer to economic collapse.  "The way it looks to me" governance is an indulgence in arrogance we can't afford. 

My mother used to tell us "You never learn anything with your mouth open."  She was right.
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Social Security looks like Enron to me


Democrats have been romancing the voters by reminding them that only they can be trusted to safeguard Social Security.  Those Republicans will take your retirement and give it to their friends on Wall Street.
 
It's true that privatization will inevitably drive some money into stocks, but privatization allows investment in the stock market.  It does not require it.  But I would suggest that there is a more reasonable explanation for the liberal hyperbole.  Privatization of any degree will require actual rather than virtual monies.
 
That shouldn't be a problem. As both Paul Krugman and Bob Herbert pointed out in separate columns on the New York Times editorial page recently; there is no crisis in Social Security.  Why?  Because the law requires that the benefits must be paid only from dedicated revenues (payroll taxes) and the proceeds from the Social Security trust fund.
 
Payroll tax revenue is a revolving door.  The funds are paid out the day they come in because the pension benefits each month now exceed tax revenues; so any transfer of funds would have to come out of the trust fund.  I'm just a senior citizen from Flyover Country but this troubles me. 
 
What is the Social Security Trust Fund?  It is the home of the surplus funds collected via payroll taxes.  How are these excess funds invested?  They are lent out to various federal agencies that use them to bridge budget shortfalls.  When the loans are repaid, the trust fund uses them to finance current, not future obligations.
 
The Social Security Trust Fund is solvent the same way that many Enron subsidiaries were solvent, on paper.  A better example may be the banks in financial crisis.  When banks have to meet capital reserve requirements, their loans are considered to be the bank's assets and their deposits are their liabilities.  The real assets of the bank are not the paper value of the loans but the forthcoming loan payments.  When customers stop making timely loan payments, the bank is at risk.
 
If the mortgagees have no collatoral at risk and lack the financial capability to repay the loans, the bank goes broke.
 
So let's evaluate Social Security's assets.  There is no collatoral attendant to these loans.  The agencies that borrowed the money have no real assets or income.  The loans depend on general tax revenues, apportioned through the budgeting and appropriation process, in amounts sufficient to retire the loan obligations.  Simply put, the solvency of the trust is captive to the federal government's willingness to tax, appropriate and perhaps print money in amounts sufficient to repay the loans. 
 
Consider the great financial catastrophes of the past ten years, Enron, the bank crisis and Bernie Madoff's scam.  What distinguishes Social Security from these?  Each catastrophe had assets and some diminished revenue stream.  The banks had some good loans and even in the case of foreclosures, they owned the properties.  While plummeting in market value, the properties were not worthless.  Madoff's assets were woefully insufficient but they offset shareholder losses to some degree.  Enron had liquidation value although it's stock was worthless.
 
What does Social Security have?  Answer; None of the above.  Like a junkie, the trust fund needs money tomorrow and they might get it.  But someday, that promise will not be kept.  Some Democrats are comforted that Representative Paul Ryan has not focused on Social Security.  But they should not be comforted.  The fund is hemorrhaging cash.  It's just not bleeding as fast as Medicaid and Medicare.
 
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GOP fumble opening kick-off

 
Republicans saw the coming catastrophe of Obamacare and parlayed it into a sweep of the House. For once, Republicans managed to understand the issue, capture public support and win the politics.  Having achieved this political hat trick, they seem to have no plan for the aftermath.  The House leadership is looking more and more like Dustin Hoffman and Katherine Ross in the final scene of "The Graduate," sitting in the back of the bus and wondering what have we done.  Like Benjamin, the Republicans succeeded in stopping the wedding without contemplating their next move.
 
The term Pyrrhic victory was made for this situation.  The sign above the bar still reads Obamacare but the Republicans own it now.  The potential beneficiaries of Obamacare want to know what's next and they aren't looking to the Democrats for answers.
 
Candidates are aligned with parties, but they speak as individuals.  Representatives don't have that luxury.  They are part of a team now. The Repulican coaching staff is still debating the game plan but the game is already underway.
 
This is what the Republicans should do.  They should make clear their intention to defund Obamacare and replace it with a date certain Republican alternative. 
 
In the interim, the House should pass a measure making all currently allowable medical expenses dollar for dollar deductible from adjusted gross income on the federal tax return.  This would permit taxpayers to avail themselves of the full range of insurance and direct purchase options for medical care that Obamacare prohibits.  It would extend tax relief to those who have out-of-pocket medical expenses but who cannot itemize deductions by making all the expenses payable with pre-tax income.  It will fix the insane restriction in the tax code that allows taxpayers to itemize only those medical expenditures that exceed 10 percent of their adjusted gross income. The availability of the less expensive, more tailored products such as major medical, long term care and the mini-meds will be assured for the short term.
 
American citizens will be free to select coverages specific to their individual needs relative to age, gender, personal and family medical history and financial capability.  The issues related to chronic illness and financial hardship will be debated separately and implemented through the existing Medicaid process and as part of the forthcoming replacement legislation.
 
While fashioning a (hopefully) bipartisan replacement to Obamacare, Republicans should commit to a comprehensive public examination of the current law.  As former Speaker Pelosi said, we'll have to pass the law to see what's in it.  Let's do exactly that.  It is time for the scrutiny and the debate that we didn't get the first time around.
 
So, if the Republican leadership is reading, do as follows:  Defund Obamacare.  Put in place an eighteen month timetable to examine, debate and fashion an acceptable bipartisan alternative.  Provide interim tax relief by changing the taxcode to make all allowable medical expenditures credits that will reduce taxable income dollar-for-dollar.  Use the existing  Medicaid process to address the interim problems resulting from acute financial hardship.  Suspend the employer compliance guidelines in the original legislation temporarily.
 
In eighteen months, the Congress will have the opportunity to replace the original legislation or to fund it.  The disgraceful process employed in passing the original bill should not be repeated.  So far, the Republicans are off to a poor start. 
 
  
 
 
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Everybody's crime


There was a mass murder in Tucson today and the political knives were being sharpened before the dead were identified. I learned of the events because my home page is a news site. The first story, of course, had sketchy details. The reporters did not yet know if the Congresswoman had survived, how many people had been wounded or who the perpetrator was. Remarkably enough, one co-anchor used her first question to the on-site reporter to ask if he thought that Republican leaders were sufficiently emphatic in their denunciations of the shootings.
 
People are on their best behavior tonight. It will get muddier tomorrow. Before the writers and politicians give vent to their worst impulses, it should be noted that real people died today, innocent people.  They woke up with a place to go and something to do.  They had plans for today and for the coming weekend, no one thinking that their final weekend had already come and gone.  When the microphones come out on Saturday, try to remember that.
 
Over the past few years, we have been witness to countless petty and unkind performances by those who govern us and those who deign to educate us.  Some seemed inconsequential.  In isolation, perhaps they are.  One conservative talk show host had a radio guest from a 'freedom from religion' event that had been somehow newsworthy.  It was clear from her demeanor that the producers had invited her to appear for a serious discussion of an important issue.  Honestly, this well-meaning young woman was not terribly bright and she never really caught on to the fact that the host was actually mocking her.  I didn't agree with one word the woman said, but I was offended for her.
 
Condescension is considered a virtue by the political elites. It's something they aspire to.. The Speaker of the House dismissed a reporter who asked about the constitutional authority for the insurance mandate with a derisive "Are you serious?"  The president of the United States has implored some voters to "punish our enemies."  He wasn't referring to enemies in North Korea.  He meant enemies like those in North Dakota and North Carolina.  He has expressed shock at our collective ingratitude and indicated that he will not abide those who would misinform the public about health care reform.  This is particularly patronizing given that a year after the debate we still don't know if the proponents have even read the bill.
 
Later today, we will hear pundits lament that the Tea Party has coarsened the debate and it has led to tragedy. I could  pretty much write what we will will hear from Rachel Maddow and Ed Schultz.  I can approximate what Carol Platt Liebau and Mike Adams will say in response.
 
I'm to the right of Alan Keyes on some issues but I recognize the truth when I bump square into it.  Back in November of 1963, Jimmy Breslin wrote a column titled "Everybody's crime." It appeared following the assassination of President Kennedy.  He suggested that we all share responsibility when the atmosphere is so poisoned that it is fertile for the murder of a president.  He was right then.  Sadly, yesterday, he was right again.
 
It's a different type of crime today. It's less about sowing hatred than trying to benefit from it. Tomorrow, people will stand behind microphones, not to mourn tragedy but to use it for political advantage. They will do so before the dead are buried and they will be proud of themselves. 
 
I expect that we will learn that these murders were committed by a hopelessly ill person with no coherent political philosophy. We will never know for sure how preventable these events were.  I also expect that we will see politicians and media types play political Pin-the-tail-on the-donkey.  The calculated decision to make political hay from mass murder or to taunt the next mentally unstable lunatic comes with a price.  Listen carefully these next few days.  Don't insult the memory of the dead by joining the mudfight.
 
 
 
  
 
 
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'Last moron standing'

 

Last moron standing

 

You can’t pick up a newspaper without reading comments by some editorial writer or Democratic politician denouncing Republican tax giveaways to the rich.  What is the message that they’re trying to send?

 

Although it is never stated in so many words, I believe that it is along these lines.  The rich (those who earn $250,000 or more in any given year) do not actually work for their money.  They acquire money because the rules that are custom designed for their benefit.  Since it is so easy for the rich, I think that we should apply those special rules to everyone so they can become rich too.

 

Let’s start with the preferential tax treatment that touches their bottom line at 35 percent.  Coupled with state and local income tax burdens, the cumulative obligation can rise to near fifty percent in a few select locations, notably in Oregon, New York and California.  Let’s require everyone to pay the combined contributions to Social Security and Medicare totaling 15.3 percent (as owner operators do on their own wages) rather than the 7.65 percent that they contribute now.

 

I think we should allow employees to control their own unemployment insurance by funding the depleted insurance reserves.  Many employers who were at solvency rate just two short years ago will soon revert to the maximum statutory rates necessary to replenish the funds.  I further think that we should personalize Worker’s Compensation.  Why should the employer benefit from the write-off for the insurance premium.  We should give every employee the opportunity to control that deduction and still guarantee the mandatory coverage.

 

And we should bump that federal income tax rate up to 39.6 percent to assure that everyone is paying their fair share.  Of course, some malcontents will argue that it would be unfair to saddle the employee with the full contribution to Social Security and Medicare, the cost of a skyrocketing unemployment premium and mandatory Worker’s Compensation insurance and then tax the remaining wages at 35 or 40 percent for federal purposes plus any state or local taxes that apply.  To which I say “Exactly.”

 

The beauty of my plan is that the employee will now be able to expense out the cost of his or her Worker’s Compensation insurance, unemployment insurance and additional Social Security and Medicare premium.  The employee will now reap the tax windfall that the employer previously owned.  But some disgruntled employees will undoubtedly say that that tax break is a mirage because although their taxable income might be substantially reduced, they pay the reduced tax debt in addition to the aforementioned expenses not instead of them.  To which I say “Exactly”

 

Back in the real world, the employer has to sell enough products and services to pay an employees wages plus a retirement contribution, Medicare tax, worker’s compensation and unemployment insurance.  Soon enough, he will be responsible for the employee’s medical insurance.  After he does that, he pays the costs rarely discussed like trucks, telephones, computers, business insurances, regulatory compliance, building, property and production expenses. Then he is allowed to keep his ‘fair share’ of what remains.

 

The government operates a few businesses.  They have generated massive losses in businesses ranging from passenger rail, mail delivery, electric power, mortgage financing and running a brothel.  You employer may make operating in the black look easy, but it is not.

 

Some businesses do succeed because special dispensations are made for their unique circumstances.  But influence peddling and lobbying is hardly the handmaiden of big business alone.  Some people will collect almost three years of unemployment benefits and we all know the system was only marginally capable of managing 9 percent unemployment for 26 weeks.  There are powerful lobbies across the political spectrum.

 

I would like to think that diatribes like that recently delivered by Bernie Sanders are isolated rantings, a sort of ‘last moron standing.’  But more and more, the editorial pages and the sound bite media are preaching a similar class warfare argument.  Unfortunately, Bernie doesn’t stand alone. 

 

 

 

 

 

 

 

 

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"Yes, Virginia, As long as there are Republicans, there will always be a Tea Party"


John Boehner gave us an unfortunate look into the Republican revolution when he said it was "too early" to talk specifics regarding spending cuts.  Sounds a bit like "you'll have to pass the bill to find out what's in it."  In a year when Republicans are running against Executive arrogance and 'Chicago-style politics,' Boehner's remarks constitute seriously competitive arrogance.

The hostility toward Washington evident in the polls, in the reluctance to invest and to hire and in the Tea Party movement will no doubt sweep Republicans into the House in big numbers.  The Tea Party phenomenon clearly benefits the Republican electoral effort.  But Boehner is making a mistake if he sees the Tea Party folks as either patient or loyal.  They bet the Republican horse across the board.  They won't play that horse again if he doesn't dial that attitude back a piece.

Time was, when politicians waited until they got elected before taking the voters for granted.  This year, Republicans have decided to be proactively tone deaf.  Will the Tea Party be around as an electoral alternative in four years?  Probably not.  If it survives as an ideological movement, it may enable the birth of a credible third party or support the election prospects of Libertarian-leaning and Independent candidates both in and outside the main parties.  And if the Tea party is doing that in four years, we will have Republicans, alone, to thank (or blame).

This much is certain.  The blinding loyalty of the Tea Party supporters to Republicans in this election cycle is simply a 'no other card to play' phenomenon.  The Democrats clearly don't want to be contaminated by associating with the Tea Party types.  If Boehner and his ilk cannot bravely talk the details of entitlement reform and spending cuts now, the day is never coming.  If they cannot disavow earmarks now, why would they do it later?

Just trust me and we’ll get into the details after the election.  This is a bad play for Republicans.  If you lack the stomach to discuss real spending cuts now, you won’t grow a pair on the Hill.  “Yes, Virginia, there will always be a Tea Party.” 




 










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Voters ponder "Will you still love me tomorrow?"


Voters are drawn to candidates that like them.  The inability to communicate affection and to fashion such bonds derailed the ultimate political ambitions of Dukakis, Kerry, Gore, Stevenson and Goldwater (probably Dole to a lesser extent).  Cold indifference to the people short-circuited the legacy oriented aspirations of Johnson and Nixon. 

President Obama succeeded in forging such bonds with the voters during the campaign.  Like Kennedy, Reagan and Clinton he preached an appealing message.  He encouraged voters to be part of something historic, to validate their  desire to contribute through political action.  Kennedy and Reagan thought highly of America and Americans and valued and encouraged the contributions of the electorate.  Clinton viewed electoral politics largely as a referendum on his person, but he clearly viewed government as a vehicle for good.

 What happened between Obama and the voters?  Democratic voters seem more handcuffed to Obama than hand-holding.  The phenomenon is hard to explain, like the Hollywood marriages that last seven months.  How much can go wrong in seven months or in twenty-one months?  Not that much really.  Obamacare, the stimulus, the deficit and the tax policy proposals are problems, but hardly insurmountable for liberals to reconcile.  The erosion of support for the president is more personal than political.  Like the seven month marriages, the cracks trace back to the courtship.

Obama's America is country of villains that needs a sheriff to police it.  America is Tombstone and he is Wyatt Earp.  The Obama supporters have come to see their contribution was limited to putting the sheriff in office.  During the courtship, it was nice that you all hated the same folks.  But now it seems, that he never really liked your sister either.  He doesn't find much appealing about the neighbors or your boss and as it turns out, he is not being well-served by some of his supporters either.  It just might turn out that your most appealing virtue is your admiration for him.  Will he still love you tomorrow?

We have only tried to divorce presidents twice in the mid-term.  We almost always take our differences up with their colleagues.  That is what is occurring now.  The policy discussions that were so unceremoniously side-stepped in the past two years are taking place there.

But the problem for Obama and for us doesn't abate with a Republican sweep.  Chances are the partisan divide opens wide, like the Grand Canyon.   The last two years of the Obama presidency will be an endless series of vetoes.  The president's recent comment that "the Republicans are welcome to ride the bus but they will have to sit in the back" is not too encouraging.  Next year, Republicans may be driving the bus.  All the president will be able to do is issue a rhetorical ticket.

I wrote in "America's assistant principal" that president doesn't seem to like many of us; his job would be easier if he did.  There is no denying the president's political skill.  If this election is going to produce more than an uncomfortable two year impasse, the president will have to put those skills to good use.

President Obama should smooth things over with the ruffled in his own party first.  But he needs to reach out to the business community, the Tea Party types, the pro-life folks, Fox News, those with illegal immigration concerns and the apolitical.  America is not a problem to be solved.  Barack Obama has the skills to be a leader and leadership is needed now.  The jury is still out on whether he will.



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Conditional liberty

Derision is the weapon of choice for the perpetually offended.  It is somewhat surprising that even when liberals characterize their opposition as intellectually deficient (Sharron Angle, Christine O'Donnell), they seldom engage them on policy.  Debate seems somehow beneath them.  

The standard required to draw the ire of the left seems less clearly drawn with every passing day.  Some past hostility directed at David Horowitz and Dennis Miller was at least vaguely grounded in philosophical moorings.  But with time passing, any rethinking of liberal orthodoxy became regarded as a personal affront.   Bernard Goldberg was transformed into Bernard Goldberg, right-wing extremist.  The same Bernard Goldberg, who in eight elections prior to the 2000 campaign, had never voted for the Republican candidate.   Eighteen year-olds didn't have the vote in 1964, but I suspect he wouldn't have voted for Goldwater either.

The left dumped on the late actor Ron Silver whose dalliance with conservatism featured a speech to the 2004 Republican convention.  Tammy Bruce has earned the eternal enmity of the elites despite her loyalty to her old colleagues on the 'social issues.'   Even Nat Hentoff, a giant among civil libertarians, has earned the disdain of liberal thinkers who are philosophical dwarfs by comparison.  Hentoff’s sin?  He rethought his opinion on abortion.

The firing of Juan Williams from National Public radio should trouble the Democratic masses more than a little bit.  It suggests that freedom of expression is a conditional liberty subject to terms that extend far beyond the rules of his employment agreement with NPR.  NPR is making the argument that they should have editorial control over the opinions of Mr. Williams, the language used to express them and the forum he chooses to reveal them in. 

Mr. Williams had the approval of NPR to appear on Fox.  Their guidelines require that.  That said, the issue is whether he violated the terms of his employment.  I haven’t seen anything to suggest that he did.

The NPR code of ethics states “10. In appearing on TV or other media…NPR journalists should not express views that they would not air in their role as an NPR journalist.  I have listened to a lot of NPR.  Mr. William’s views don’t strike me as inconsistent with programming analysis readily acceptable to NPR management in their own productions.

Specifically, NPR analysts are not discouraged from expressing opinions per se.  This conflict was not about an opinion, but his particular opinion.  Even by that standard, they misconstrued his intent in context.

Two things about this firing trouble me.  First, NPR acted with a complete lack of professionalism and grace.  Mr. Williams not only deserved better treatment; he earned it.  The public comment about his opinions, his psychiatrist and his publicist should have earned his boss a place in the unemployment line.  It was character assassination,

Second, I read NPR's Code of Professional ethics and I can't help but wonder how scrupulously this code has been applied to the past work of other analysts, such as Nina Totenberg and the late Daniel Schorr.

 We live in a confusing world when the elites regard everyone to the right of Nat Hentoff and Juan Williams as potential enemies.  I don’t agree with Juan Williams much, but NPR has been petty and graceless.   For once, an apology is truly called for. 

 

 

 

 






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The buck stops nowhere

For as long as I can remember, politicians have portrayed economic distress as the predictable consequence of intentional acts inflicted on the unsuspecting public by their opponents.  Setting aside the malevolent motives ascribed to their counterparts, I find it remarkable how powerful they find them. Not only do they see them as capable of conspiracies, crimes and selfish motives, they see them as good at conspiracies and crimes and malevolence.

The Obama Democrats are almost awed by the magical powers of the Republican minority.  By the same token, while Republicans can seemingly impose their evil will on the economy, Democrats with overwhelming control of both houses still feel pretty impotent.  And more importantly, not responsible for the outcomes of their own making.

Let's examine the case for the stimulus package.  The focal justification for the stimulus was to prevent the unemployment rate from rising to 9 or 9.5 percent.  Passing this legislation would keep the unemployment rate under eight percent.  When the unemployment rate ballooned to 9.7 percent, the explanation was pretty unconvincing.  The Democrats didn't grasp how bad the economy really was.  The Republicans had made even a bigger mess than we thought.  That is certainly one explanation,  Another would be the stimulus didn't work.  Needless to say, that school of thought wasn't given much credence.

Americans can find at least two things to be depressed about here  First, we have one party government for the time being.  Worse, we have unaccountable one-party government.  We have have placed the Congress in the hands of a party that can do anything-they-want, yet doesn;t want to account for the result of anything-they-want.  It is also troubling that politicians, who failed to grasp the fragility of the economy, could advocate so adamantly for a remedy that is so fiscally reckless.

The second and even more distressing outcome is that the buck stops nowhere.  I mean that both literally and metaphorically.  If the buck doesn't stop at the Democratic doorstep today, it won't stop at the Republican doorstep if the voter have a similar temper tantrum in November. 

Once again the media is missing in action.  The politics dominate the daily news cycles.  The politics,though, are just Entertainment tonight
from Washington D.C.  As we come to expect less and less from politicians, we get less and less.  As we accept less from the media, we get ?  We would be lucky if political decisions affected only politics.

The decisions being made in Washington affect your employment opportunities, your retirement security, the quality and availability of medical care and your ability to secure credit.  They impact your security and your liberty.  These issues are a damned side more important than who wins the political sideshow.

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Midterms "Feel the breeze"

I so look forward to the midterm elections.  Politicians are on their best behavior, rising above the senseless antipathy and character assassination that poisons politics during the governing phase.

Politicians assume a respectful demeanor grounded in a recognition that they are public servants, not public overseers.  See what hope and change has wrought.

Seriously, with Congress polling at an 11 percent approval rating, a little less animosity and a bit more humility might be a good play, tactically speaking.  So, why aren't we seeing it.  There has been a seismic shift away from party affiliation and incumbent infatuation.  The disenchanted fringes, the Reagan Democrats, moderate Republican and Perot voters now people much of the eclectic middle.  With the wisdom that only career politicians can muster, the Democrats strategy is to intimidate their recalcitrant charges back into the fold.

By associating the Tea party types with racism, substandard intelligence and angry rural sentiments, Democrats hope that the Obama deserters will dissassociate themselves from the radical center and hop back aboard the Obama train.  The Republican response has been equally mystifying.  While the criticism of the Sharron Angle types has been cautious, their message is directed at emphasizing the impotence of Tea Party independents.  Without us, you are no one.  Republicans should recognize impotent.  They are desperately in need of a legislative blue pill. 

The Republicans usually own the tone deafness issue but not this time.  Their Democrats have established an oily sort of comfort with attacking the undecideds.  They don't dispute the dissatisfactions of the undecideds as much as they dispute their right to be dissatisfied.  It is an arrogant whim to think only Democratic grievances are valid grievances.

The Republicans are at least entertaining the idea that the party has to address the collective disenchantments of the 'beholden to no one crowd.'  The Democrats seem content to wait and forgive them when they finally come to their senses.  If I was truly undecided, I'd remember who treated me better when I was adrift.


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Sestak, Spector, Obama and Issa - law firm from hell

 

 

 

The Sestak/Spector debacle raises the bar for trivial pursuits in Washington D. C.  Evidently, there is a law on the books that outlaws politics.  Who knew? 

 

The behavior of the principals, however, is not trivial.   It is regrettably typical.  Admiral Sestak appeared in front of almost every television camera on the East coast and said nothing.  He said nothing, in the same carefully parsed and rehearsed words, repeated over and over, lest we forget.  He was asked that question.  He answered it honestly.  There is no purpose served by pursuing the matter further.

 

There are two points to be made here.  First, Admiral Sestak started this conversation.  He put the subject on the table and now that he won the primary he has lost enthusiasm for discussing it further.  Second, it is becoming almost reflexive for politicians to evade uncomfortable exchanges by deriding the question.   Sestak defeated the press by technical knockout.  They didn't leave the corner for round two.

 

Representative Sestak's performance conjured up fond memories of "no controlling legal authority."   This can't possibly help him in the general election.

 

President Obama responded to the Sestak question by promising a response in the near future.  Fair enough.  But it didn't end there because the President continued on, assuring us that nothing illegal took place.  The acceptable response should end with a period, not a comma.  Now, it appears that the president is confessing ignorance of the details, while simultaneously assuring us that nothing illegal took place.

 

Congressman Issa was also never out of make-up during the past week.  He emphasized that the administration's actions met the strict definition of a misdemeanor put forth in the statute.  He reminded us again that the Obama administration is not the transparent, open breath-of -fresh-air that they promised to be. And in another profile in courage, he declared that it is time to stop business-as-usual.  The public is always suspicious of politicians who acquire their ethical concerns on the heels of political opportunity. 

 

All Issa succeeded in doing was to revive memories of the Clinton impeachment process.  You remember the Republicans.  They were the ones with the profound, but not terribly specific outrage.

 

This episode is much ado about nothing.  The White House preferred Spector to Sestak.  They tried to influence Sestak to withdraw.  If the White House statement is correct, they had a pretty low opinion of Sestak.  What does any upwardly mobile politician want?   Exactly, a really good volunteer opportunity.

 

There is, of course, the cynical view.  Let's imagine that Sestak was really offered a job, not a volunteer opportunity.  Let's further imagine that way back when, Arlen Spector didn't jump parties.  What if, Sprector, instead,  approached Karl Rove lamenting that he couldn't win running as a Republican.  “Karl, I’m thinking about running as a Democrat.”

 

Now, picture Karl Rove responding to Spector by suggesting that he just hang in, keep the Republican faith and if it didn’t work out, there might be a spot on the appellate court available farther out.  Do you think that Senator Spector would have been forthcoming about the details of that conversation?  Do you think that a President or Senator Obama would have assured us that no law had been violated?  Would the media have been as compliant?  Would it look criminal to the Democrats?  Would it have seemed trivial to the Republicans?

 

This is spring in Washington.  If the politicians can't decipher the Tea Party message, here it is:  The public is tired of the 'hypocrisy as usual'.  Grow up.   

 

 

 

 

 

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America's assistant principal

It is difficult to believe that President Obama rose from the ranks of the non-judgmental left. Like a high school assistant principal, he is constantly reminding America that there is only one adult here and we won't find him or her in our bathroom mirror. Like selfish, inconsiderate and undisciplined children, we are screwing up the school, sorry........ his country.

In remarks about the oil disaster in the Gulf, the President made yet an another unnecessary foray into condescension. There were three CEO' s testifying in front of the latest congressional dog and pony show. Why these individuals were busy being flayed by Congress instead of guiding their companies at this critical moment is beyond me. Is the country somehow better served if they are all busy in Washington acting contrite?

To play devil's advocate for these CEO's, who are, in fact engineers; they may have a significant role to play in the repair effort going on in the Gulf. If the buck stops at their door, they may be needed somewhere other than the hot seat. Regarding their individual culpability, we don't actually yet know if anyone is guilty of negligence or recklessness. We don't know if we are dealing with human error, design flaw, criminal mischief, inept regulatory oversight or reckless disregard. If one or two or all of the parties are less than causally responsible, why should they not defend themselves.

Without evidence to the contrary, I think we can assume this much. None of the parties intentionally endangered the lives of their own employees or put the financial health of their companies, the livelihoods of their customers and the environment at risk by design. Bad decisions and accidents are an unfortunate part of life. Even negligence can be benign or malicious.

The condescending tone President Obama adopts in his public statements occur far too often to be anything, but calculated. A brief review of presidential highlights reminds us that no one has a lower opinion of the American people than their president. He finds the Tea party participants amusing and ungrateful. He admonished a Fox anchor twice in a single interview for interrupting him. He was tactless and arrogant during the health care summit.

He will not "abide" those who seek to misinform the public about health care. He thinks there is a point "when you have made enough money." His sweeping generalizations have questioned the motives of mortgage lenders, Wall Street bankers, Arizona voters, employers of non-union shops, Fox News, Republicans and the Bush administration. And then there are those who "get bitter, cling to their guns or religion or antipathy to people who aren't like them."

Mind you, I am not defending anyone in particular. If there are criminally responsible parties, government has job to do.  But it seems many of us are guilty of nothing more than the president's disapproval.  Most of the harm that befalls our country occurs without design or intent. Some occurs because the citizens are no more skilled, compassionate or far-sighted than their counterparts in government. Private concerns recklessly carry inadequate capital reserves, much like Social Security, Medicare and federal housing lenders.

The president said in his first appearance before Congress that he was humbled by the responsibility. I believe that he meant it then. In the succeeding months, it seems that the president has overcome his humility and reached the limits of his patience with many of us. It would serve him well to remember that while he occupies a position of great responsibility, his stock in the country is the same as every other American.

I went to a Jesuit High School, a good training ground for living in Obama's America. But deep down inside, I knew that our crabby and taciturn assistant principal really liked us. I don't get the sense that the president likes many of us. It would make his job easier if he did.

In his leadership seminars and books. John Wooden notes that leaders say "Lets go" not "Get going" The point merits some presidential pondering.

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Washington needs literacy initiative


Eric Holder made what should have been a remarkable admission on Thursday. He has not yet read the Arizona law that he has already publicly denounced. In addition, he had speculated on the record about a forthcoming legal challenge.  Both actions could be construed as premature. Maybe he read the Cliffnotes.

Last year, several representatives acknowledged that they hadn't read the stimulus bill, then under consideration. Similar inferences can reasonably be drawn regarding congressional familiarity with the recent health care bill.

At recent hearings about financial reform, it was apparent that some legislators knew less about credit default swaps and synthetic CDO's than I know. It was equally clear that one member did not really understand elements of the very transaction that had provoked his outrage.

In the aftermath of last year's stimulus bill, Sen. Christopher Dodd had to publicly acknowledge that he, himself, inserted 'grandfather clause' language concerning bonuses. (The language was subsequently used to guarantee bonuses at AIG after the company's financial collapse and government rescue) Unlike officials who are unaware of detail because they haven't read the relevant material, Dodd had previously denied to CNN, knowledge of  his own involvement with material that he personally authored. In a curious aside, he was later able to remember precisely why he inserted the specific language that he denied authorship of.

How is it that that the Attorney General can take issue with and threaten legal action in response to legislation that he has not read? How does a legislator choose whether to vote for or against a bill that he or she has not read? Is it possible for a congressman to make a meaningful contribution to financial regulatory reform without being conversant in the most basic vocabulary attached to the issue? If an elected representative is going to contribute language to legislation, should he not demonstrate a clear understanding of the precipitating events.

These questions require either that the parties read, research and understand the issues or explain how their Edgar Cayce-like intuition steers them unerringly to to right conclusion without even a hint of study. At least Cayce justified his intuition. He acquired it in a trance. Where did Holder develop his strongly held convictions? Did his concern come to him in a dream or was it just issued to him?

Now, if I were a cynical person, I might think the explanation transcended the paranormal. I might think it was about politics.

Students, routinely, are assigned homework. Read pages 122-146 in the textbook. Their knowledge is subsequently measured with a test. The test measures familiarity with the content. Students do not just vote aye or nay on the assignment.

Here's a test that you might like to try on your legislator. All the questions can be answered yes or no. Did you read the American Recovery and Reinvestment Act?, the Patient Protection and Affordable Care Act?, the Caregivers and Veterans Omnibus Health Services Act?, or the Restoring American Financial Stability Act? If your legislator answers yes, feel free to ask followup questions.

Washington desperately needs a literacy initiative for elected officials and political appointees. Your assignment is to read the bill you are voting on this Wednesday or discussing on Meet the Press next Sunday.  The mainstream media would have you believe that most citizens are typically uninformed and disinterested. I attended two of the health care townhalls. It was evident that many of the attendees had more than a passing familiarity with the current versions of the legislation. At one of those meetings, it was equally clear that the elected official did not.

I'm sure that Eric Holder is a busy guy. At the same time, it is clear that the anchors and legal analysts at CNN and Fox had tainted themselves with actual knowledge of the Arizona law's content. Public officials take advantage of the media forums afforded to them by virtue of their position. They should come armed with more than just a feeling.

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President Malcontent

"But we can't expect to solve our problems if all we do is tear each other down.  You can disagree with a certain policy without demonizing the person who espouses it. You can question somebody’s views and their judgment without questioning their motives or their patriotism”

The president gave the commencement address at the University of Michigan on May 1,2010. He delivered a truly inspiring, but nonetheless perplexing epistle on civility in public discourse. Why perplexing? President Obama is to civil discourse as Hugh Hefner is to chastity.

I am absolutely sure that President Obama believes incivility in politics impairs his ability to fashion consensus and hampers his ability to lead. This president equates disagreement with incivility. Mr. Obama sees  Republican capitulation as the path to consensus. He thinks that those who are not persuaded by his vision are, in some sense, morally deficient. (His Republican adversaries play a similar game, casting their opposition as intellectually dishonest, if not intellectually impaired). No doubt, Mr. Obama thinks that he, not only meets, but sets the standard for reasonableness and civility. In fact, that very misperception explains much.

The speech was both objectively correct and simultaneously disingenuous. You believe the sentiment because the president’s observations about partisanship and uncivil behavior are inarguably true. At the same time, you know that for him, it is rhetoric, not conviction. Sean Hannity wouldn’t be believable giving the same speech. Neither would Chris Matthews. Like the president, they forfeit the presumption of sincerity by virtue of their oft-demonstrated bias.

It has become increasingly common for politicians to dismiss not only the political opposition but the participating citizen as uncaring, uninformed and having malign intent. The message is “Be careful what you say” and “how you say it.” If you’re not careful enough, some public official, an ex-president or a White House press secretary may take you to task. They will do so in a public, dismissive and condescending manner. And they will feel good about it.

The opposition and the public are regularly subjected to public chastisements. These are executed in controlled settings, rarely subject to questions and delivered to a press that respects nothing more than smug. God, they admire smug.

The president observed near the end of his remarks that the poisonous political climate has the effect of discouraging participation in public life. He couldn’t be more correct. Everyone should read this speech. Has President Obama matched the spirit of this speech in his treatment of those who opposed his health care reform package? Has he made any effort to encourage the participation of the Tea party protesters?

President Obama appears frustrated, if not chronically dissatisfied with many of his fellow citizens. The president belonged in the audience at this speech, not at the podium.


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