Thursday, December 29, 2011

Unclear on the concept: part LVXII

Apparently the Illinois Catholic Charities organization is closing down rather than having to help gay couples adopt children. They are protesting an Illinois requirement that they can't accept state money unless they stop discriminating against same sex couples.

First of all, it is not clear to me why they would stop performing charitable work simply because they don't want to help certain people: Whatever happened to the the injunction of "hating the sin but not the sinner"? They certainly could follow the standard conservative principle of refusing to take "government money," yet continue their good works using their own funds.

Instead, keeping with an equally long tradition of militant right-wingers, they would rather try to pull an end-run around policies put into place through democratic means by a majority of their fellow citizens.

OK -- so far nothing unusual: just standard religious exceptionalism. However, Anthony R. Picarello, general council for the militant Conference of Catholic Bishops (CCB), offers this analysis:

"It's true that the church doesn't have a First Amendment right to have a government contract, but it does have a First Amendment right not to be excluded from a contract based on its religious beliefs."

No, Mr. Picarello. The church was not excluded from this contract because of its beliefs, it was excluded from the contract because it wouldn't comply with the terms of the contract, which clearly state that contractors may not discriminate. They can believe anything they want, and announce their beliefs in pulpits and street corners as much as they like. To make a simple analogy, if a building contract requires foundations to be poured with concrete, and you believe that Elmer's glue will suffice, you can state that belief as much as you want, but you can't expect to get that contract.

Lots of fundamentalist churches used to believe -- and a few still believe -- that "mixing of the races" is wrong. They used the same argument that Mr. Picarello is now dredging up to try to show that anti-discrimination laws were somehow oppressing them. But it didn't work then and it shouldn't work now. This is a democracy, and we try to treat all law-abiding citizens fairly. If that violates the opinions of some religious group that wants to treat some law-abiding citizens unfairly, well then they can't expect taxpayers' money -- some of which was contributed by the very people they want to shortchange -- to support their efforts to do so. Would the Catholic Bishops use the same logic to support groups that refuse to place children with Catholic or Mormon or Jewish or left-handed families, say?

What part of democracy does Mr. Picarello and his clients not understand?

(Which brings me to our "cave"-man President. Will he now let religious groups refuse to cover contraception in their healthcare plans, in violation of current statutes? Why isn't this a no-brainer for him?)

Friday, December 23, 2011

You can't make this up.

 John Boehner said yesterday (about the House going along with the Senate on temporary tax cut):

"...why not do the right thing for the American people, even though it’s not exactly what we want.”

(This is a quote from UPI)

Thursday, December 22, 2011

We'll take it...

Well, it's not like the Dems and Obama did anything great or bold or clever. In fact, the Republicans in the House overreached, the way arrogant and not very smart people often do. They were mislead into doing so because they are fundamentally wrong about things: they buy into a philosophy of a powerful elite over the majority and of the wealthy over the poor. Most are self-righteous in their narrow and intolerant religious views and ignorant of not only science but of economics and social philosophy.

The victory itself was minor: the PTR (Party for the Rich, formerly the GOP) in the House, in thrall to the Tea Screamers, having to back down and eat the Senate's two-month extensions of (1) a dubious "temporary" lowering of the FICA tax and (2) a temporary extension of unemployment benefits. Many battles over these issues remain -- and we'll see how tough the Dems are when push really comes to shove.

However, let's hope that this is the first cry of "The emperor has no clothes on." Maybe folks will wake up from the seemingly endless nightmare of buffoonery we've had to put up with from the Republican presidential B-Team (there is no A-Team) candidates.

Could this be a turning point? I will go to bed hoping so.

Thursday, December 15, 2011

The there that isn't

There simply is nothing to discuss or even listen to from the "field" of Republican presidential candidates. I actually watched most of the last debate and couldn't find anything substantive. The whole was based on how much each candidate didn't like Obama and thought his policies were failures. Not one scintilla of defense for any pro or anti positions was given. No one explained why the "personal mandate", for example, was bad -- they just competed with each other in their distaste for it. They couldn't explain why this policy came out of Republican/conservative think tanks and had been supported by Republicans for decades ("Individual mandate is individual responsibility"). Or why Nixon's healthcare plan was to the left of Obama's. Or why the "public option", so popular in public opinion polls here and successful in practice most everywhere else, is not under discussion anywhere in the ranks of our reps.

Of course, none of the candidates explained how they would eliminate the vastly unpopular denial of coverage for "previous conditions" that the insurance industry has saddled us with, and which Obama's healthcare plan would get rid of. Would they allow people to opt out of healthcare premiums until they were sick? Or, would they simply let those without healthcare die (as many in the audience at an early debate seemed to favor)?

Mitt Romney, who as governor of Massachusetts supported and signed the bill which is the model for Obama's healthcare bill, said that, basically, he did so because "what's good for Massachusetts is not necessarily good for the country." No one knows what he means by this except as a way of making excuses to the Tea Screamers and other yahoos who don't like the plan. Thus, there was no debate on the issue, just on whether Romney hated the plan at least as much as his rivals say they do.

None of the candidates or the simpering incompetent moderators seemed to understand that the temporary lowering of the FICA tax does not necessarily imperil Social Security -- since when do Republicans care about saving Social Security as we know it? -- because the change specifically says that the lost revenue would be made up from general funds. Do facts have any meaning in this circus? One can make the argument -- and I have a great deal of sympathy for it -- that lowering the FICA tax temporarily will make it impossible ever to raise it back again, making Social Security dependent on general funds from the federal budget. The could allow a breach in the wall of the whole SS structure which, in future years as the hump of "boomers" pass through the system, would require more and more general revenue funds. A far better plan -- and one I've always supported -- is to raise the cap on income subject to FICA. This would enable the wealthy to shoulder their fair tax burden, perhaps lower the rate for everyone (especially when the boomers die off) and would ensure the solvency of the SS system indefinitely.

In any case, the world of true debate about real ideas is not the cloud-cuckoo-land of the Republican "debates". The latter is all about $10,000 bets, conspicuous religiosity, and who has hewn most faithfully to unexamined conservative mythology. It seems to me that grownups should be allowed equal time to reply -- especially those from the fact and reality-based community.

Wednesday, December 14, 2011

Major computer crash

Sorry for the hiatus: my old computer definitively died and I've spent the past week breaking in a new one. It seems that it's now whipped into shape, so I hope to get back to blogging very soon.

(Don't ask me why thinks I'm posting this at 4 in the morning! It's actually about 7AM.)

Wednesday, December 7, 2011

Job creators aren't the rich

Here's an article from Bloomberg news, written by a very rich person, who turns the usual Republican baloney about rich "job creators" upside down. Check it out here. (Thanks to Maxine for sending me this.)

We can't all be like you now, can we Angela?

This is, of course, is a paraphrase of the great line in which Jeremy Irons as Claus Von Bulow puts down Alan Dershowitz (Ron Silvers) in the classic film "Reversal of Fortune."

But I'm referring to Germany's chancellor Angela Merkel who would very much like the whole European Economic Community to be like her own country: industrious, prudent, thrifty, docile. These are, of course, traits long admired by many of the Germanic persuasion (and others, of course), and account for certain elements of Germany's "success", both past a present.

However, belt tightening may not be the best strategy for most of the rest of Europe, any more than it has been for Japan since its last recession (still continuing) or for the U.S. (still continuing for most of us). Unemployment not only creates misery for the unemployed, but keeps most national economies from recovering, and keeps their debt high. As far as I can read, stiff roll-backs in government spending (even when there are deficits) have not worked in ending or shortening recessions. On the other hand, the "pump-priming" and other measures of Keynesian economics have been quite effective since WWII in preventing and/or shortening major depressions, or preventing them from becoming like the Great Depression. Arguably this is still very much the case. Paul Krugman has been writing about this for some time: see his recent column, for example, Killing the Euro.

By the way, German banks were among some of the worst speculators in subprime mortage-backed securities, CDOs and Credit Default Swaps. They were known in the investment banking community as the financial sucker of last resort, especially a few banks in Dusseldorf -- first mentioned in Michael Lewis's The Big Short and featured in Chapter IV of his latest book Boomerang. In any case, whether German's had any major role in the 2008 debacle or not, they will be called upon to be a major bailer-outer of the Euro-zone and more, simply because (1) if the Euro goes down, so will the European economy (including Germany's) and (2) there doesn't seem to be anyone else to do it.

Friday, December 2, 2011

Snookered again?

I may be wrong, but it seems that the Republicans have been one-upping the Dems for the past few months. I'm referring to the endless broadcast of their stupid debates in which their superficial and nasty prejudices are put out over the air without any sort of "equal time" for reply by people who know anything about anything. Consider: Bachmann and that "frothy" guy ("Santorum") are total idiots who know nothing about anything;  Ron Paul who can't seem to distinguish rationality from looniness (he spouts about equal parts of each); Cain who is happy that thousands of women have not made complaints about being harassed by him (why didn't he claim billions, after all?) and who proposes a tax plan that will transfer wealth to the rich from everyone else faster than anyone else's tax plan; Gingrich  and Romney who seem to have no moral scruples whatever and will do or say anything or accuse anyone of anything if it will advance them politically or financially; and Huntsman, who isn't given much coverage anyway because he doesn't sling enough red-meat to the true believers (he's not really a Republican because he claims to believe in science -- a no-no for this band of yahoos). Oh, I forgot about Rick Perry ... but that's OK.

Why are these clowns allowed air time without challenge?

(Note: they have been challenged in print by just about every fact-checker in the press and on line. They are, literally, factually challenged.)

Monday, November 28, 2011

Judge Rakoff does the right thing

It's about time that a judge has stood up for accountability by Wall Street. When Citicorp (parent of my least favorite bank, CitiBank) was sued by the SEC for betting against mortgages which it had mislead investors about, the company was quick to settle because it didn't have to admit guilt. (I wrote about this in a previous blog.) In other words, it had to pay money but didn't have to acknowledge its sleazy behavior, so typical of how Wall Street acted during and after the disaster it caused. Judge Rakoff was having no part of this whitewash. Because this is such a wonderful, clear and reasonable ruling, I have reproduced below (in red) some excerpts from the AP story -- check out especially the last paragraph (in bold). I haven't read the NY Times account yet, but I'm sure I will savor it

U.S. District Judge Jed Rakoff said the public has a right to know what happens in cases that touch on "the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives." In such cases, the SEC has a responsibility to ensure that the truth emerges, he wrote.

Rakoff said he had spent hours trying to assess the settlement but concluded that he had not been given "any proven or admitted facts upon which to exercise even a modest degree of independent judgment." He called the settlement "neither fair, nor reasonable, nor adequate, nor in the public interest."

The SEC had accused the bank of betting against a complex mortgage investment in 2007 — making $160 million in the process — while investors lost millions. The settlement would have imposed penalties on Citigroup even as it allowed the company to deny allegations that it misled investors.
The SEC allowed the consent judgment settling the case to be filed the same day it filed its lawsuit against Citigroup, the judge noted.

"It is harder to discern from the limited information before the court what the SEC is getting from this settlement other than a quick headline," the judge wrote.

"In much of the world, propaganda reigns, and truth is confined to secretive, fearful whispers," Rakoff said. "Even in our nation, apologists for suppressing or obscuring the truth may always be found. But the SEC, of all agencies, has a duty, inherent in its statutory mission, to see that the truth emerges; and if it fails to do so, this court must not, in the name of deference or convenience, grant judicial enforcement to the agency's contrivances."

"Contrivances" -- what a put down! Rakoff should be made an honorary member of the Occupy movement, and should be honored as one of the few in power who are not sucking up to the banks and their holding companies.

Friday, November 25, 2011

There is no symmetry between the major parties

Today's post on the blog Winning Progressive pretty much sums up my feelings about the superficial attempt to find "symmetry" between the parties. You know, the nonsense that they are both unbending and ideological, placing party "purity" before the common good. This is total hogwash, perpetrated by the apologists for the Republicans and pushed by the would be "wise men" -- pundits who would like us to believe that they transcend the common opinions and passions of ordinary "partisan" folks.

Let's just remember:

There is only one party that at least tries to limit the effect of campaign money in elections, and only one party committed to defeating any attempt at reform.

There is only one party committed to economic, social, racial and sexual equality and only one party that mocks these ideals and fights against any legislation to further them.

There is only one party that seeks compromise and only one party that is committed to obstructionism and making the other party fail -- even at the expense of the national good.

Democrats may not be perfect (in fact, far from it), but the Republicans are truly beneath contempt.

Saturday, November 19, 2011

Freddie and Fannie: a revision

Some financial commentators and several readers of this blog have claimed that the quasi-federal mortgage entities Fannie Mae and Freddie Mac were the real culprits responsible for the 2008 financial collapse. This view was rejected by 9 of 10 members of the congressional Financial Crisis Inquiry Commission appointed to determine the causes of the crash (3 of the 9 were Republicans). Only one commissioner wrote a separate report blaming Mae and Mac: Peter J. Wallison; the separate Republican dissent is not, in fact, much different from the full report, and does not place the blame on Mae and Mac: see analysis here. Also, see this fact check for further summary of the Commissions findings and rebuttal of the Chamber of Commerce's distortions. However, the idea of blaming Mae and Mac persists for several reasons.

1. Mae and Mac did, in fact, invest heavily in subprime and near-subprime motgages, beginning around 2000 and peaking around 2007.

2. Mae and Mac were under some federal pressure -- mostly during the Clinton administration -- to originate and deal in home mortgages (and mortgage backed securities) in a way that would make housing loans more available to low and moderate-income people -- part of their charge as GSEs (Government Sponsored Entities).

3. Mae and Mac supposedly had a leg up in this game because they were assumed to be protected in their investments (and speculations) by the federal government itself.

4. Besides being involved in an accounting scandal, their officers also had their bonuses tied to their performance in buying and selling securities.

 From what I read, these statements are largely factual. You can read an account with some facts and charts in a report prepared by the Cato Institute.

To be fair, the Cato report has its own definition of what constitutes a subprime mortgage; it also doesn't go as far as saying that Mae and Mac actually caused the crisis, although it does claim they played a major role and were responsible for nearly half of the market for subprimes during the height of the frenzy. This estimate has been contested.

But, of course, there is another side to the story. A recent article in the New York Review of Books gives a different take on the role of the GSEs:

Among other things, the authors (J. Madrick &  F. Portnoy) point out that Mae and Mac bought much less risky securities: few CDOs and few really low-rated bonds; they also had a much lower rate of default than other Wall Street speculators.Here's a brief quote:

"In fact, the rate of delinquencies for all GSE securities in 2004 was 4.3 percent, compared to a delinquency rate in private industry of 15.1 percent of mortgages. In 2005, the GSE rate was 7.8 percent compared to 28.7 percent, and in 2006 and 2007, the rates reached 13.2 and 14.9 percent in the GSEs and 45.1 and 42.3 percent in the private market ... [also] losses as a proportion of mortgages guaranteed or bought by the GSEs were far lower than in private industry."

Mae and Mac, as far as I could determine, did no trading in CDOs (derivatives based on, e.g., mortgage backed-securities -- and worse). CDOs -- and especially so-called "synthetic" CDOs --  were the most dangerous of the lot. These were the instruments that were fraudulently mis-rated by supposedly reputable rating agencies. GSEs also had nothing to do with credit default swaps -- the "insurance" policies on CDOs whose sale did in AIG.

All in all, I think it is fair to say that the GSEs behaved irresponsibly during the recent fiscal crisis. However, those whose ideology is anti-government -- especially when government regulates business or aids the less fortunate -- have used the transgressions of Mae and Mac to attack the role of government in housing (see the Cato statement below), and, further, to let major private-capital culprits off the hook. While Mae and Mac definitely need stronger regulation, this goes double for the the rest of Wall Street, and blaming Mae and Mac for the crash is simply revisionist history.

Finally, I think the underlying ideological position of conservatives and libertarians is well summed up by this quote, also from the Cato report mentioned above.

"Ultimately taxpayers and the broader economy will only be protected from future bailouts by a full withdrawal of the federal government from housing policy. Policy interventions, such as those by the Federal Housing Administration and the Federal Home Loan Banks, continue to distort capital toward the housing market, while our commercial banking system remains vulnerable to downturns in the housing market. Our financial system would become considerably more stable were Washington to abandon its attempts to direct capital to politically favored segments of the economy."

There is simply no evidence for the claim in the last sentence -- it is merely an item of conservative belief. When left to its own devices, without government intervention, the "free (capital) market" has historically created one unstable disaster after another. However, there is a larger principle. The preamble to our Constitution asserts that one of the essential tasks of our government is to "promote the general Welfare". There is no mention of free markets or the superiority or desirability of what is now our capitalist system. Our government, in order to promote the general welfare has intervened repeatedly to ensure that all of our citizens have the opportunity to lead decent and productive lives. Many times this intervention is necessary to prevent the wealthy and powerful from taking unfair advantage of the less powerful.  Although I have doubts about the desirability of home ownership for all, I have no doubt about the desirability of dignified shelter for all. Sometimes attaining this involves directing capital to certain segments of the economy -- not because they are "favored" but because they simply have been dealt a raw deal and need help from their fellow citizens to insure their welfare.

Fannie and Freddie

A few readers -- including an "Anonymous" several times -- have claimed that the quasi-federal mortgage entities Fannie Mae and Freddie Mac were the real culprits responsible for the 2008 financial collapse. Although these two organizations did invest heavily in subprime and near-subprime mortgages, they were, as I pointed out in the Comments section of this blog, fairly late though substantial participants in the bubble. A recent article in the New York Review gives a whole bunch more facts about the story:

Among other things, the authors (J. Madrick &  F. Portnoy) point out that Mae and Mac bought much less risky securities: few CDOs and few really low-rated bonds; they also had a much much lower rate of default than other Wall Street speculators. Also, though they were asked by the Clinton administration to help finance less affluent (hence presumably riskier) home-buyers, they pretty much fulfilled this obligation without resorting to subprimes.

While Mae and Mac definitely need stronger regulation, this goes double for the the rest of Wall Street, and blaming them for the crash is bad, revisionist history, cooked up to take the real culprits off the hook. The best thing we can do is support and strengthen Dodd-Frank, and help Elizabeth Warren defeat Scott Brown in Massachusetts.

Alas I fear that the "Occupy" movement, by failing to produce a constructive program, politics or ideology, will become irrelevant to the cause of containing Wall Street's inherent greed. The very real force of corporate money, in the climate of the Citizens United court decision, is making loosely organized idealism a luxury that we will not be able to afford. I hope that the many creative and militant people in the Occupy ranks will salvage from it a real movement that can be politically effective -- at least as a prod to Democrats and a producer of useful political statements (propaganda, if you will).

Tuesday, November 15, 2011

" ... none of them could be identified"

Here is one of my favorite old Mad cartoons. It's by the late Ernie Kovacs (draw by Wally Wood) and is part of Kovacs' series called "Strangely Believe It" (a satire of Ripley's "Believe it or not"). It's from issue #33, June 1957:

I looked it up because it reminded me of some of the "factoids" that the current crop of Republican presidential candidate have come up with. Just look at the various "fact check" features in newspapers and the Web after a Republican debate.

Monday, November 14, 2011

Waterboarding and torture

Look, when does a physical punishment qualify as torture?  If waterboarding is not torture, then why does it, supposedly, work -- in the sense that it is a physical punishment that gets people to give information (true or otherwise) that they would not ordinarily give?

I know that logic is not a strong suit for Republicans, but isn't that, in fact, a workable definition of torture? Sure, there is the phony assertion that torture only occurs when the pain inflicted is the equivalent of a life-threatening injury. But that is nonsense, or at least not serviceable. Some life-threatening injuries are not, in fact, that painful (e.g. snapping ones neck, or OD-ing on some narcotic). On the other hand, genital electric shocks are well-known tortures, yet are not life-threatening.

If a prisoner will not "talk" until he/she is waterboarded, then waterboarding must be a pretty powerful incentive. Isn't it rather perverse to say that it isn't torture? Especially when all branches of the U.S. military say that it is? Remember: waterboarding was done not by the military -- as some Republicans seem to think -- but by the CIA. After all, the CIA does not exactly occupy the honorable place in our affection and patriotism held by the Army, Navy, Marines or Air Force. John McCain, who knows something about at least this issue, says that waterboarding is torture.

 What is the matter with these would be presidential candidates anyway? Is there any aspect or meaning of "beneath contempt" for which they don't qualify?

(BTW: Several of these candidates seem to think torture is OK anyway. It's an interesting judgment since the Israelis, who know a thing or two about terrorism as well as torture, have determined, after a lot of soul-searching, to reject torture as immoral.)

Friday, November 11, 2011

Perry's "senior moment"

My first reaction upon watching the video of Perry's "2 out of 3" slip-up at the debate a few days ago was to ask: How could he forget something he cared deeply about and supposedly understood?. It's not like forgetting a line from the Gettysburg address or a few notes from a Chopin etude. If he really had thought about which agencies he wanted to eliminate and understood that the Dept. of Energy oversees, for gosh sakes, military nuclear reactors, he would certainly be able not only to name it but to explain why he wanted to get rid of it. (Why didn't one of the moderators question, in the light of the disastrous Japanese melt-down, why anyone would want to sidestep government regulation of military reactors.)

The guy is a phony, reading from a script pandering to right-wing Yahoos who hardly know the Department of Energy from Planned Parenthood. And besides, he would lose the primary to Ron Paul who seems to want to eliminate -- count them -- FIVE departments, not just Perry's three. I mean, these departments are job killers: let's get rid of ALL of them (except, just maybe, Defense).

Ooops, sorry, there I go again: What part of beneath contempt don't I understand?

Thursday, November 10, 2011

The nature of "conservatism" on the U.S.

What this whole flap concerning Herman Cain is all about is what U.S. conservatism has always been about: sexism, racism and class warfare. All of these were used to try to defeat the unions in the early (and not so early) days of the labor movement. They were used to keep women "in their places" and non-whites in the back of the bus. Remember: it was the self-described conservatives who opposed the civil rights movement, the women's equality movement, and every other attempt to achieve social justice. Name a cause that is anti-people, anti-equal opportunity and anti-equal justice and it is a cause the conservatives have supported. They loved poll taxes, they refused to condemn apartheid, they have been and still are soft on fascism (corporatization of the state) and "authoritarian" regimes: it wasn't the liberals who pushed to finance the military dictators and "disappearers" in Central and South America.

Rush Limbaugh, who far from being an outlier, is the voice of conservatism in the U.S., sneers at the concept of sexual harrassment -- so does Fox TV. The Republican debate audience thinks that it's fine for Cain to refer to Nancy Pelosi as  "Princess Pelosi" -- the same way they applaud Perry's record of executions in Texas.

These things are not isolated, or unusual or unrepresentative. The conservative propaganda machine has determined that there is enough sexism, racism and intolerance remaining in America that it is worth speaking and pandering to it in order to eke out the extra votes needed to win close elections. And, of course, they are correct.

Left to their own devices, people would vote to keep their air clean, their roads paved, and their family members safe from predators. Americans want Social Security to be there for them, as well as Medicare and equal-opportunity employment. Since this is the natural and normal state of things, it takes an extra measure of cynical nastiness to try to get them to sneer at the very things they deeply want. It is precisely this nastiness that the American "conservative" movement is all about.

Shame on them.

There is no there there (in the Republican debates)

Watch them if you like gossip: Rick Perry having a senior (or alcoholic or drug) moment e.g.

But, there is no reality there: see the fact check on last night's debate. What they're saying is phoney baloney, meant to get cheers from their Yahoo audience.

Wednesday, November 9, 2011

A dose of reality for the Yahoos

There has been so much publicity surrounding the PTR's (formerly GOP's) interminable and seemingly unavoidable nominating circus, that it one forgets that the candidates and issues involved are basically beneath contempt. Yesterday's elections restored a bit of reality. Life goes one, and there are still large numbers of people out there who aren't brain dead.

Mississippi, for example, rejected a truly idiotic chaos-inducing plan to declare fetuses persons from the moment of conception. This is so fraught with unintended -- and intended -- consequences that even Mississippians, right in the heart of the bible-thumping-belt, had more second thoughts than affirmative votes, sending the measure to well-deserved defeat. It is a testament to the Yahoo-ness of the state that the vote was even remotely close. But: A miss is a good as a mile (as they say in Miss.)

Voters in Ohio thoroughly rejected an anti-union bill that had been passed by its Republican governor (Kasich) and legislature.

Maine, which elected a Yahoo governor last big election -- mostly because people who despised him split their vote, so he got a small plurality -- turned on a vote suppression bill that he and the Republican legislature passed. Mainers restored same-day registration, rejecting the phony voter-fraud arguments that had been used to pass it.

Finally, a fairly conservative Appeals Court in D.C., in a 2-1 decision, supported the constitutionality of Obama's health care bill by declaring that the Commerce Clause of the
Consitution gave Congress the right to legislate the "individual mandate." Maybe even Scalia and Thomas will buy their argument, but who knows what will happen with the radically activist Supremes.

Anyway, nothing succeeds like success. I hope these results will tone down the Republican sideshow, but I doubt it. Bring on more Cainonized victims of the Hermster! (That guy really gets around.)

Tuesday, November 8, 2011

Social Security and income inquality

Merrill Goozner makes a point about Social Security in a recent essay that I've made in this blog as well; however, it is a crucial point that often goes unreported, so I will repeat it again.

The Social Security program, a wonderful  --and, at the time, truly progressive if not radical -- social compact between generations, was set up with the expectation that 90% of American wages would be subject to the withholding tax (FICA). And, indeed, this was the case -- at first. However, the tendency in American capitalism is for more and more wealth to be concentrated in fewer and fewer hands. Since the FICA tax is capped at a certain level -- which is currently about $106,800 per year -- the very wealthy don't pay taxes on a lot of their income. The result is that now only about 83% of American income has SS taxes withheld. This is responsible for a good chunk of the negative imbalance between SS payments and SS income.

Most of the rest of the imbalance can be attributed to the population bulge of the "baby-boomer" generation, longer lifespans, and, of course, the grim recession we are now experiencing and will most-likely continue to experience for years. (Yes, I know, professional economists say it's not technically a recession any longer, but they are not out of work -- yet.)

If we can substantially raise the cap on FICA wages and get the economy going in a few years, we can weather the storm of the baby-boomer bulge and have SS emerge once again as a strong program.

Medicare -- and healthcare in general -- is another story.

Friday, November 4, 2011

Brinkley on Cheney on Cheney

NY Times book review has an article by Alan Brinkley on Cheney's take on history as expressed in his recent book: check it out here.

At one point Brinkley asks (about Cheney): "What had turned this capable, pragmatic, respected figure into the harsh and belligerent man who seemed toward the end to believe that only he understood the world of his time?" I guess Brinkley is trying to be fair, but amongst people whose judgement I trust (including me), Cheney was always suspect. He was a big Reagan supporter and opponent of sanctions against apartheid in South Africa; in fact, he classified Nelson Mandela's party as terrorist (but never the apartheid parties). He was a military hawk in most matters except for certain programs (e.g. the Osprey helicopter) in which his fiscal conservatism came into play. Of course, as the representative from Wyoming, he championed mining and ranching interests -- but that is to be expected after all.

Anyway, Brinkley gives a pretty good account of Cheney and Rumsfeld in this Times piece.

Thursday, October 27, 2011

Safety: Flying vs. Driving

I'm taking a rest from politics today to add to the never-ending debate about flying versus driving. The following appeared in the Times in 1994, though I came across it just recently:
To the editor,
The editorial "Concern Over Airline Safety (Nov. 16, 1994) perpetuates a myth that has surfaced periodically for years. That is that "flying is still safer than driving to the airport."
Not true. The only acceptable method to compare risk between air travel and automobile travel is based on the number of deaths per hour of exposure.
Data from a respected safety analyst, Trevor Kletz, show that air travel has a fatal-accident frequency rate four times higher than that for driving a car. For airplane travel there are approximately 2.4 deaths per million hours of exposure; for travel by car the figure is 0.6 deaths per million hours of exposure.
Simply put, for the same number of hours riding in a car or riding in an airplane, you are four times more likely to be killed in an airplane than in a car.
President Safety Engineering Labs Inc.
Detroit, Nov. 22, 1994

Here is my take on this. I don't agree that "this is the only acceptable method to compare risk," though it is a method. You have to ask what it is you must or want to worry about.
1. If you must go from NY to Chicago, say, and you are concerned about your safety, then you should fly. Here's a simple estimate: A good flying time, NY -> O'Hare, is about 2:15. The driving distance is about 800 miles. Even if you averaged 65 MPH that's still over 12 hours of driving, or more than 4 times as much exposure than in a plane. Since a plane is only 4 times more dangerous per hour, then there you have it: fly. 
2. On the other hand, calculations of risk for flying are averages over all carriers and all routes. Presumably this includes Berzerkistan (a Doonesbury creation) Airways flights from a primitive airport north of Irkutsk to the cliffside airport just outside Lima Peru, during Monsoon season. The figures for car travel might also include the short-lived driving career of Sam "five-more-for-the-road" Teetotaler who only drove (past tense) at night. The difference is, you have little control over a flight other than the choice of carrier (and not always that); in a car, on the other hand, you can control how you drive: your physical condition and that of your car, as well as the hours during which you drive. You can actually improve your odds considerably when you drive by being very careful.
3. If you are worried about worrying (this is not a joke), then you have to think carefully about how you worry. It is not unreasonable to fear flying, so if you do, and if the prospect of flying is likely to ruin your trip, then drive or take a train. On the other hand, if you worry about driving and find flying exciting (as I do), then fly.
4. If you are concerned about ecology/energy the situation is complicated. The US government ( and gives the following BTU/Passenger-Mile figures:
                 Auto          3600
                 Air             4000
                 Rail           3000
(I have no idea if these are correct -- they are what the Feds tell us.)
The problem with these figures is that they were obtained by dividing the BTU/Mile averages for cars, planes and trains by some sort of estimate of passengers per vehicle. This can be tricky. The "average" car can seat probably 5 people but rarely does. The average plane these days is pretty much packed, but not so the average intercity train. Thus, these estimates are debatable. I'd prefer to tax carbon, let gas prices rise, and let the market sort it out. I also don't have much hope that a realistic energy policy will emerge from our government in the foreseeable future.

Tuesday, October 25, 2011

Perry's "flat tax"

First of all, you can reject Perry's tax plan simply because it doesn't tax capital gains. Any plan that taxes income from work but doesn't tax income from investment is a scheme to transfer money from working people to fat cat investors.

This is not to say that working people don't own stock, simply that such a tax effectively takes money from people whose principal source of income is productive work and gives it to people whose main income is derived from playing with money.

Republican like to describe investors -- all investors, it would seem -- as job creators. This is a false generalization. For example, Mitt Romney headed a rapacious company -- Bain Capital -- whose main activity was buying and looting companies for their cash. Jobs at "Bainified" companies were either terminated or shipped overseas. When Romney ran against Ted Kennedy, he started the race way ahead, but when people in Massachusetts found out about Bain, Romney went down like a lead balloon.  Of course,  Romney at least had a company. Large numbers of "investors" are speculators, who buy and sell stock without any interaction with the companies involved. Many make thousands of trades a week (or even per day) and are solely interested in taking in dollars. They are social and economic parasites who should pay more not less tax than people who actually do productive labor.

As far as the rest of Perry's plan is concerned, we don't know enough details. (Cain, by contrast, has no details: his website and public utterances are total gobbledygook, unintelligible to either economists or linguists.). Perry claims that taxpayers will have a choice of filing under his plan or using the old tax structure. This seems disingenuous because wealthy people will clearly pay less under a flat tax of 20%. If everyone else pays at most what they are paying now, the government will clearly be collecting far less that it currently does, even though Perry suggests his plan is revenue neutral, which is mathematically impossible. My suspicion is that either Perry hopes that people will end up filing under his plan in order to avoid the "complications" (read: math) of the current tax code, or that he really doesn't intend to give the choice option for more than a year or so.

Other aspects of the plan are unclear at this time. He claims that taxpayers will get a $12,500 personal exemption. That would be much more reasonable than Cain's nasty plan, but I couldn't find a specific statement from Perry that this would be for each person in a family. If a family of 4 were to get a $50,000 exemption from income tax that would be decent. I can't see how he can do this and also cut taxes for wealthy people, and still afford to run any sort of government -- maybe he doesn't intend to.

There is a preliminary estimate of how various taxpayers would fare under Perry's plan in the NY Times; here's a link. The figures make it clear that the personal exemption would help middle class families with children. Retired people would also be helped  -- provided Perry doesn't eliminate Social Security and Medicare, in which case it would be a total disaster for seniors. The people who would be helped the most are the wealthy -- as usual for Republican plans.

Perry makes noises about cutting programs that we citizens directly pay for -- sometimes called "entitlements" -- but it is unclear how he will cut them. He has said some scary things about Social Security and Medicare, and he doesn't like unions, consumer protection, and environmental laws. Sounds like life under the Texas governor would be nasty, brutish and short -- at least for people of modest wealth.

If your taxes go down somewhat, but important services related to education, health and safety are drastically cut, how is your life better?

Given the fact that the Republicans have been the Party for The Rich (PTR as I hope we will start calling it) for more that a century, we will not see any of their presidential candidates deviate from their policy of taking from the poor and middle class and giving to the rich. In the case of their tax plans, the Devil is not just in the details but in their whole philosophy.

Friday, October 21, 2011


Thanks to Mike for pointing out that Citgroup agreed to pay $1/4 billion, not $1/4 trillion. I corrected that in the last blog.

(Not the first mathematical mistake I've made. In two consecutive years -- a long time ago --  I made mistakes on my income tax in favor of the IRS - which they pointed out, to my embarrassment.  My wife took over doing taxes after that.)

Thursday, October 20, 2011

Lest we forget Citigroup

It's easy to forget how thoroughly awfully the big banks and investment houses behaved in the years and months preceding the Great Financial Debacle of 2008. Right-wing revisionism has tried desperately to change the story, blaming Fannie Mae and Freddie Mac, ObamaCare, and Dodd Frank for the Great Recession and the miseries that ensued and are still with us.

So, as a return to reality, note that the parent of my least favorite bank, Citigroup, has agreed to pay more than $1/4 billion dollars in a civil suit claiming fraud in the issuing and sale of subprime mortgage securities (read the story here). This is only one company and only one lawsuit. There were no criminal prosecutions, even though fraud is, according to my understanding, still a crime.

I suppose the Republicans have some sort of spin on this, perhaps blaming the Occupy Wall Street class warriors retroactively, or maybe the job-killing consumer-protection movement, or maybe even the EPA: Anything but the truth about greed and corporate immorality.

Wednesday, October 19, 2011

Stop this flat tax nonsense

It's time that everyone who can do a bit of math and who has sympathy with the lower and middle classes starts to speak out about this "flat tax" nonsense. A flat tax of the kind being proposed by the Party for The Rich (PTR, formerly GOP) would create the largest transfer of wealth to the rich and away from everyone else in the history of this country -- perhaps in the history of any country. The numbers are clear and irrefutable. In fact, the only arguments that its supporters can muster are that it's simple to compute and that it's called "fair" by rich people.

Talk about fairness when your flat tax proposal exempts the first $40,000 of income, and taxes capital gains at the same rate as earned income. 

Talk about fairness when your sales tax includes purchases of stocks and bonds.

Talk about fairness when your sales tax isn't a VAT tax, which effectively doubles its rate on manufactured items.

For gosh sake, all you "populists" and union members and Move-On people, and Occupiers: Start talking about the math -- it's a no-brainer.

Anyone who supports a flat tax is either rich, wants to give away his money, or doesn't understand it.

Tuesday, October 18, 2011

Student loans and more advocacy points for Occupy Wall Street

Recently there have been "demands" to forgive student loans: here's one from The Guardian. I think this is a rather bad idea. If providing free college education is a national goal, like healthcare, then there has to be some rational planning. You can't just throw money at anyone and everyone who wants to go to some college. What about those who have paid off their loans, or who are working hard to avoid having to borrow? What programs should be acceptable at which schools, and which students stand a chance of success?

What might be a reasonable step, and an idea which the Occupy Wall Street movement might take up, is to limit the interest charged on any and all federally-backed student loans to the lowest rate of interest charged to any American bank. If Bank America or Citi can borrow at near zero interest rates directly or indirectly from the Fed, and invest in T-bills (see here, for example) instead of businesses, then students should be able to borrow money for their education at the same rate. What's fair is fair.

Here are other ideas that readers have suggested the OWS movement might endorse with near unanimity: 

Remove the cap on earnings subject to Social Security.

Put everyone on Medicare. Charge accordingly, but eliminate the private insurance companies and allow government to negotiate hospital charges and pharmaceutical costs for its citizens.

Monday, October 17, 2011

Occupy Wall Street and propaganda

The Occupy Wall Street movement (OWS)  has so far had a pretty good shelf life. The reason is clear: it represents a huge base of legitimate resentment. In spite of all the public relations resources that large banks, insurance companies and investment houses can command, the basic fact is that the vast majority of the population (here and abroad)  knows that the terrible world-wide near-depression which started around 2008 was the result of greed and carelessness centered around Wall Street. This culpability has been documented over and over by books (e.g. The Big Short by "Moneyball" auther Michael Lewis), movies (e.g. the Academy-Award-winning documentary Inside Job), and articles (almost all reporting outside Rupert Murdoch's  Wall Street Journal).

It was probably a good idea for OWS to have a vague and diverse message in these early days. People should be allowed to come up with their own reasons for resenting Wall Street, and think about them and what they would like to see in the way of control and restitution. In this way a large mass movement can be gotten together -- at least initially.

The problem is that the forces representing Wall Street and its interests are extremely powerful, with immense resources. Wall Street was, for decades, a financial prop for the right wing in general, and conservative interests in general. However, when the narrowness, self-interest, and actual harm of its policies, as embodied by the adminstration of G.W. Bush, became obvious to nearly everyone, they were smart enough to desert the sinking ship, and shift their support to the Democrats and the election of Barack Obama in 2008. When they were rewarded with key sympathizers Paulson, Summers and Geitner achieving strong infuence in the new administration, they went back to work undermining reform by backing attacks on Obama, healthcare, and consumer/environmental protection. The massive funding of the "make Obama fail" movement by the Koch brothers (among many other wealthy right-wing sources of money, and the entire Republican Party) is now everywhere.

And, right on schedule, the attacks on OWS are being stepped up. Photos and accounts of sex, drugs and rock and roll are being trotted out, along with images of inane signs and videos of incidents of various kinds of idiocy.

This is the way it always works. When I took part in the early anti-war demonstrations in the Boston area, I'd be surrounded by pretty serious marchers, including grand-parent types, men and women with babies on shoulders or in strollers, and people and puppets decked out as Nixon and Kissinger. There was also a small contingent of marchers who had beards and long hair -- stjill pretty scary, I guess, even for the middle 60's in America. As we trudged along, the mid-day population of the bars emptied out, with red-eyed folks, heaping all sorts of nasty insults on the streams of passers by. The next day the Boston Globe featured articles describing hundreds of "hippies", probably on drugs, screaming obscenities -- accounts totally at odds with reality, but presented credulously  by the Globe reporters.

The interests that want to destroy any kind of people's movement love to use divisiveness to break its back. When OWS points out that 1% of the population controls 40% of its wealth, its enemies respond by claiming 53% pay taxes and 47% don't. The idiocy of this supposedly countering pseudo statistic (which neglects FICA, and ignores the many who are too poor to pay income taxes) doesn't prevent it from being dutifully and uncritically reported by the news media.

The time is rapidly approaching when OWS must present some sort of unifying position on economic issues, and must have spokespeople to enunciate carefully and reasonably this position. There are many items its members can mostly agree on, though there are probably none on which all will agree. But that's OK: only someone who doesn't understand democracy will insist that nothing can be advocated unless everyone agrees to it; such a position is worse than a filibuster, after all.

Here are some examples of very popular ideas.

1. Ending the economic favoritism that enables banks to borrow at near zero interest rates and use this money to invest in Treasury Bills.

2. Forcing banks to renegotiate "underwater" mortgages (mortgages on houses worth less than than the money owed).

3. Enacting laws forcing banks that were bailed out to actually lend money.

4. Passing a Financial Services Tax (what I call the Parasite Tax) that would put a small tax on both sides of every stock transaction. This is purely a tax on speculators, not wealth or job creators.

5. Taxing capital gains as ordinary or "earned" income.

6. Strengthening not weakening the Dodd-Frank financial regulation act.

7. Investigating seriously the roles of financial executives in the subprime mortgage debacle.

8. Extension of unemployment benefits for  "long" periods  (at least a year at a time).

It is hard to believe that at least these items would not be agreed upon by 90% of the OWS supporters. There is no need to make further general statements about the nature of capitalism or other divisive issues.

If you have further suggestions please use the comments section to list them.

Saturday, October 8, 2011

Pay by check!

When banks moved their customers from paper checks to debit cards, they saved a bundle; for example, VISA (founded by Bank of America) estimated that member banks saved more than a buck and a half per check when customers used a debit card instead.

I learned these and other interesting facts about the history of checks and debit cards from a recent article "Charging for Debit Cards is Robbery" written by Lloyd Constantine, the lead attorney in a successful 1996 anti-trust suit against Visa and MasterCard. This suit resulted in a big cut in the fees the banks charged retailers. However, customers were still being socked for a debit fee amounting to about 44 cents per transaction. Recently, acting through Dodd-Frank, the Fed determined that a more reasonable amount would be a quarter of that. Probably because of complaints from the banks, the fee was settled on at 22 - 24 cents per transaction. Compared with checks, this is a tremendous benefit to the banks, but compared to the amount of money they lost through their own greed, and compared to what they think they can get away with, it is not nearly enough.

Now, my next-to-least  favorite, Bank of America, wants to charge $5 a month when customers use its debit cards in retail stores. -- the ATMs would still be free if you use those from BoA.  This is their end run around the the Fed and Dodd-Frank. Nearly a century ago the courts decided that very similar fee that the banks charged for checks in retail sales was illegal. This should be illegal too, but so far there has not been a court case, and customers of BoA will be stuck paying that fee. Other big banks are likely to follow BoA's lead. Smaller banks may resist and thereby pick up some customers from the biggies. (BTW, I dislike CitiBank even more than BoA, but more about that some other time.)

What we should do if our bank socks us with this debit card fee is to pay by check. Yes, it may cost a dime a check, but for the $5.00 per month debit card fee you can write 50 -- yes 50! -- checks each month. If lots of BoA customers start doing this it will certainly catch BoA's attention, and send a warning signal to other banks. Stores won't like it, since it will slow down cash registers. But then maybe the stores will put some pressure on the banks and the Fed to roll back the debit card robbery.

There are two other points to note here. The first is that banks will charge whatever the traffic will bear; if the charges are illegal, they will collect them until it is proven so by a lawsuit. When one type of charge they levy is disallowed, they will institute another. However, successful lawsuits with big penalties can slow them down, and so can consumer actions like writing checks and changing banks.

The second point is that consumer protection laws like Dodd-Frank can help us fight against the greed of many financial institutions. That's why the big banks and financial houses, and their servants in the Republican party,  hate Dodd-Frank and other consumer protections, and want them removed or drastically weakened. It's all about money, and its flow from us (99%) to them (1%).

Spread the word: If you have a Bank of America account, start writing checks in stores instead of using your debit card, and consider changing banks.

(Thanks to Maxine B. for calling my attention to the Times article and for suggesting that we fight back by using checks instead of debit cards.)

Friday, October 7, 2011

National Security "Death Panels"

After cross-posting my last blog on al-Awlaki, the blog Winning Progressive mentions the following article from Reuters about secret death panels that select names for assasination:

Thursday, October 6, 2011

The killing of Anwar al-Awlaki

First of all, I am neither a pacifist nor an absolute opponent of the death penalty. But, I am a strict advocate of due process and the rule of law. Here are the main points as I see them.

1. Al-Awlaki was born here and hence was a U.S. citizen. As such, he had due-process rights guaranteed by our Constitution. As far as I know, al-Awlaki was never tried, in person or in absentia, for any crime.

2. Al-Awlaki made it clear by personal statements on many occasions that he was a member of, and fully supported, the terrorist group al-Qaeda. There is hardly any doubt that al-Qaeda was and is a perpetrator of lethal damage against the U.S. and other countries. There is little doubt that al-Awlaki advocated and encouraged these attacks.

3. The U.S. killed al-Awlaki in Yemen, in a surprise drone attack, an attack that killed several other people nearby. This is typical of recent American anti-terrorist activities in places throughout the world, including Yemen, Afghanistan and Pakistan -- and probably other countries as well.

4. We've known about al-Awlaki for at least a decade; there are FBI files dating back to before the 9/11 attacks. While his earlier activities may have been (deliberately) ambiguous, his advocacy for the al-Qaeda cause has been clear in recent years.

So, why couldn't al-Awlaki have been tried -- even in absentia -- for treason, and had his citizenship stripped from him? There was certainly no press for time, since he's been wanted for several years now. Obama and his National Security Council authorized his murder about a year ago. Even formally (without constitutional challenge) this would have been legal only if he were an "imminent threat" to national security. Why advocacy of the terrorist cause, hardly a new or strikingly effective action, would be an imminent threat is unclear. It was hardly a secret that we were after him. Why couldn't his case have been taken up legally years ago?

Unlike many cases of people accused of capital crimes (including treason), there is and was no doubt of guilt here: Al-Awlaki personally made public his support of al-Qaeda and its objectives, and publicly recruited for the murderous organization. Given this, why couldn't Obama's administration manage to go through legal channels instead having the President simply "authorized" his termination?

What's getting scarier and scarier is the power that a succession of presidents has been claiming. We are not at war with Yemen, or Afghanistan; in fact, we are not at war with any country at the moment. (We weren't at war with Libya either, BTW.) We are supposedly at war with "terrorism", though strict -- or even not so strict -- constructionists of the Constitution might wonder how that could come about. Presidents have the constitutional power to grant amnesty, but I've never heard of a constitutional power -- short of a declaration of war -- to grant a license to kill, especially to off an American citizen.

Nations have the right to defend themselves against horrible people who think nothing about putting deadly bombs in crowded public places. If they are caught in the act, they should be stopped by any means consistent with public safety -- and this may mean mowing them down with gunfire. However, absent the compelling need for immediate life-preserving action, we have to be governed by laws.

Monday, October 3, 2011

Healthcare costs stable but premiums rise + Occupy Wall Street

Events have made blog writing difficult for me in recent weeks, but I hope to be back blogging now on a more regular basis.

Merrill Goozner in his e-newsletter Gooz News (he also write for The Fiscal Times) points out the following:

"The private insurance industry is covering fewer people and facing just a 4 percent increase in costs. Yet  it is raising premiums 9 percent. No wonder profits are rising smartly."

As usual, the knee-jerk right is blaming Obama and healthcare reform for this 9% increase without any apparent reason except the need to attack Obama for everything.

Also, apparently, the "Occupy Wall Street" movement in NYC is spreading to other cities. There's one here called "Occupy Boston." I'm sure that many of the people in this nascent movement are very well-informed and articulate about the issues and solutions involved in making Wall Street pay for the disaster it inflicted on us; nevertheless the press has largely riduculed the group as a whole as offering little  in the way of facts or concrete suggestions. Even if this were the case initially, it no longer is, since other groups, including labor unions have begun joining up. Let's hope that as more people join up with the miovement the reporters will take more effort to read the petitions and manifestos being distributed.

One thing that the movement should start pushing for is a "Financial Transactions" or "Tobin tax"  -- which even the conservative French premier Nicholas Sarkozy joins the AFL-CIO in supporting: click here. I have discussed this in at least one previous blog : The Parasite Tax. This might be a nice rallying point, and could turn out to be as popular with large cross-sections of Americans as the millionaires' tax.

Thursday, September 15, 2011

Another old joke formally updated as new facts roll in

Perry: Hi big pharma.

Merck: Would you do us a favor and force our vaccine on young, innocent, most likely Christian Texas girls even though it would allow them to prevent cervical cancer, thus encouraging them to be promiscuous for the rest of their lives? We'll contribute $23,000 directly to your campaign and give another half million to the Republican Governors' Association who will funnel a big chunk of it to you.

Perry: Of course: What's not to like, big pharma.

Merck: OK, then how's about we give you $5000?

Perry: Hell no: What kind of candidate do you think I am?

Merck: We've established that, we're just haggling over the price.

For 2 more old jokes updated, see previous blog here.

Tuesday, September 13, 2011

Some debunking of Republican fiction

Here are the facts:

Republican debate

It takes the kind of strong stomach which I don't have to watch what passes for "presidential caliber" Republicans "debate" each other -- especially in front of an audience of TeaScreamers.

I watched pieces of it until my gorge started to rise. I switched to the Patriots NFL season opener, only to have my digestive track further insulted by the inane commentary of the ESPN announcers, falling all over each other as they sucked up to Brady and Belichick and any player that they happened to like on any particular play.

I soon clicked off the Tube and read a few chapters in a wonderful book of interconnected and moving short stories called "The Imperfectionists" (Tom Rachman).

My wife, who has a somewhat stronger stomach than mine later pointed out some interesting pieces of the Republican debate that I missed. For example, from the CNN transcript here is Ron Paul on militarism and Al-Qaeda:

PAUL: First thing I would like to do is make sure that you understand there's a difference between military spending and defense spending. I'm tired of all the militarism that we are involved in. And we're wasting this money in getting us involved. And I agree, we are still in danger, but most of the danger comes by our lack of wisdom on how we run our foreign policy.

So I would say there's a lot of room to cut on the military, but not on the defense. You can slash the military spending. We don't need to be building airplanes that were used in World War II -- we're always fighting the last war.

But we're under great threat, because we occupy so many countries.

We're in 130 countries. We have 900 bases around the world. We're going broke.

The purpose of al Qaeda was to attack us, invite us over there, where they can target us. And they have been doing it. They have more attacks against us and the American interests per month than occurred in all the years before 9/11, but we're there occupying their land. And if we think that we can do that and not have retaliation, we're kidding ourselves. We have to be honest with ourselves. What would we do if another country, say, China, did to us what we do to all those countries over there?

 Can it be? Some actual sense in this debate? There was some applause after these remarks, mostly (I think) because Ron Paul went on to say we needn't take on the responsibility to be "policeman of the world", and to talk about how George Bush won on a platform decrying "nation-buliding."

But then frothy Rick Santorum, one of the lowest-watt of the low-watters, attacked Ron Paul on the above statement, which resulted in this exchange.

SANTORUM: We should have -- we are not being attacked and we were not attacked because of our actions. We were attacked, as Newt talked about, because we have a civilization that is antithetical to the civilization of the jihadists. And they want to kill us because of who we are and what we stand for. And we stand for American exceptionalism, we stand for freedom and opportunity for everybody around the world, and I am not ashamed to do that.


BLITZER: Thirty second, Mr. Paul.

PAUL: As long as this country follows that idea, we're going to be under a lot of danger. This whole idea that the whole Muslim world is responsible for this, and they're attacking us because we're free and prosperous, that is just not true.

Osama bin Laden and al Qaeda have been explicit -- they have been explicit, and they wrote and said that we attacked America because you had bases on our holy land in Saudi Arabia, you do not give Palestinians fair treatment, and you have been bombing --


PAUL: I didn't say that. I'm trying to get you to understand what the motive was behind the bombing, at the same time we had been bombing and killing hundreds of thousands of Iraqis for 10 years.

Would you be annoyed? If you're not annoyed, then there's some problem.


Clearly the TeaScreamers knew what they wanted to hear, and it wasn't what Ron Paul was telling them. I wonder if it ever occurred to these folks that Al-Qaeda has not attacked other western, non-Islamic democracies such as Canada and France, whose presence in Islamic territories is minimal. Sure Osama and Al-Qaeda represent Islamic extremism, but they were also somewhat descriminating in their choice of target. If the branch of Christian extremism and "American exceptionalism" represented by the Screamers were to take over our policies we could expect to be the target of a lot more violence, and not just from Al-Qaeda.

Finally, there's Bachmann commenting on Perry's executive order making HPV immunizations mandatory for Texas girls:

BACHMANN: I just wanted to add that we cannot forget that in the midst of this executive order there is a big drug company that made millions of dollars because of this mandate. We can't deny that...


BLITZER: What are you suggesting?

BACHMANN: What I'm saying is that it's wrong for a drug company, because the governor's former chief of staff was the chief lobbyist for this drug company. The drug company gave thousands of dollars in political donations to the governor, and this is just flat-out wrong. The question is, is it about life, or was it about millions of dollars and potentially billions for a drug company?

BLITZER: All right. I'll let Senator Santorum hold off for a second.

You've got to response to that.

PERRY: Yes, sir. The company was Merck, and it was a $5,000 contribution that I had received from them. I raise about $30 million. And if you're saying that I can be bought for $5,000, I'm offended. 

A lot of us are reminded of an old joke, often attributed to G.B. Shaw or Winston Churchill, about the woman to agrees that she would sleep with some man who offered her $ 1 million. When he lowers his offer to a few dollars she says "Of course not, what kind of a woman do you think I am?" and he responds "We've established that, we're just haggling over the price." In any case, does anyone actually believe that $5000 was all that Merck gave to Perry? 

(The Washington Spectator, a muckraking newsletter, has had some recent articles about financial support for Rick Perry. )

Even CNN, by the way, has pointed out a few of the almost universal factual errors in what these candidates had to say. One of the biggest was Perry's claim that Pres Obama's stimulus program created "0 jobs". This is totally false; ironically, as even Michele Bachmann said, thousands of the Texas jobs that Perry takes credit for resulted from Federal money and were public-sector jobs. Of course, Bachmann's attacks on Obama's healthcare plan are no more factual either -- including her claim that the plan would penalize the Medicare program.

But why go on? There was nothing in the debate that was much related to reality, and certainly nothing useful or constructive. It was all posturing for the discerning and knowledgeable group of TeaScreamers in the audience -- the ones who think that a person without the ability to pay medical bills should simply be allowed to die.

Just nice, plain, hometown  folks, most of whom seem to have taken some kind of Christ into what passes for their hearts -- I don't know what they've taken into their brains. They'll be a major factor in who gets the Republican nomination, which seems just about right, come to think of it.

Saturday, September 10, 2011

Solvency and the Social Security Trust Fund

At the moment, because of the decrease in population growth and the Great Recession, Social Security is paying out more money than it is taking in through FICA taxes. However, SS has a $ 2.5 trillion surplus built up over the years. Money from this surplus has been borrowed by the Federal Government, partly to pay for two unfunded wars. In exchange, SS has been reimbursed by U.S. government bonds. These bonds are so good that the interest that the U.S. government pays on them has actually been decreasing, a fact that right-wing ideologues never seem to mention. Far from being a Ponzi scheme, Social Security has not only been reliably paying out its commitments to retirees, but has also been financing undeclared and unbudgeted wars, and helping out with the deficits caused by the Bush Tax Cuts.

Even if nothing is done, Social Security will continue to pay 100% of its commitments through 2037, and 78% of its commitments thereafter (this from economists from within and without the Social Security System). However, there are easy and relatively painless fixes that will guarantee 100% of its commitments for the foreseeable future. One of these is simply to withhold FICA on all income up to $180,000 (up from the current $106,500) and, maybe, raise the retirement age by a year or so. A similar, though partial, patch was passed by Pres. Reagan working with Tip O'Neil in 1985 -- in the days when Republicans' main goal was not to keep the economy sour in order to stand a better chance at winning an election.

Below are some quotes, mostly through the AP, supporting these statements.

AP: "Social Security Has Built Up A $2.5 Trillion Surplus ... Benefits Will Be Safe Until That Money Runs Out ... In 2037." A January 27 Associated Press article noted that while "Social Security will post nearly $600 billion in deficits over the next decade," without any changes to the fund, "[b]enefits will be safe until that money runs out. That is projected to happen in 2037." From the article:
Social Security has built up a $2.5 trillion surplus since the retirement program was last overhauled in the 1980s. Benefits will be safe until that money runs out. That is projected to happen in 2037 -- unless Congress acts in the meantime. At that point, Social Security would collect enough in payroll taxes to pay out about 78 percent of benefits, according to the Social Security Administration.
The $2.5 trillion surplus, however, has been borrowed over the years by the federal government and spent on other programs. In return, the Treasury Department has issued bonds to Social Security, guaranteeing repayment with interest. [Associated Press, 1/27/11]
(Dean) Baker: "Treasury Bonds ... Are Never Referred to As 'I.O.U.'s'" In "The Business Pages Of Major Newspapers." In an August 25, 2010, post on his Center for Economic and Policy Research (CEPR) blog Beat the Press, economist Dean Baker, who is co-director of CEPR, pushed back against a New York Times piece that referred to Treasury bonds as "i.o.u.'s." [The New York Times, 8/25/10] Baker called this "absurd" and continued:
The business pages of major newspapers are full of references to Treasury bonds all the time. The bonds are never referred to as "i.o.u.'s." The article then includes the bizarre assertion about government bonds that the only way for the government to make good on the bonds it has outstanding: "is to issue mountains of new debt or to take the money from elsewhere in the federal budget, or perhaps impose significant tax increases -- none of which seem like especially practical options for the long term."
[Times reporter Matt] Bai's opinion is radically at odds with perceptions in financial markets. These markets view it as almost inconceivable that the government will not honor its bonds, which is why the interest rate on long-term bonds is near its lowest level in the last 60 years. [Beat the Press,, 8/25/10, my italics]
NYT: "False Impression" That Trust Fund Is "A Worthless Pile Of I.O.U.'s." In a January 2005 editorial published during the weeks before the Bush administration released its plan to privatize Social Security, The New York Times responded to President Bush's suggestion that in 2018 Social Security would be bankrupt by saying, "In suggesting that 2018 is doomsyear, the president is reinforcing a false impression that the trust fund is a worthless pile of I.O.U.'s -- as detractors of Social Security so often claim." The editorial added that for decades, payroll taxes had "exceeded benefits, with the excess tax revenue invested in interest-bearing Treasury securities." The editorial continued:
That accumulating interest and the securities themselves make up the Social Security trust fund. If the trust fund's Treasury securities are worthless, someone better tell investors throughout the world, who currently hold $4.3 trillion in Treasury debt that carries the exact same government obligation to pay as the trust fund securities. The president is irresponsible to even imply that the United States might not honor its debt obligations. [The New York Times, 1/10/05]

Left Unchanged, Tax Income Will Still Cover 78 Percent Of Benefits After 2037

Social Security Board Of Trustees: After 2037, "Annual Tax Income" Would Fund "78 Percent Of" Social Security Costs. Contrary to Varney's suggestion that after 2037 Social Security benefits would no longer be funded, the 2010 Annual Report Of The Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds reported that even if no changes were made to Social Security's funding, the "annual tax income to the trust funds is projected to equal about 78 percent of program cost" after 2037. From the report:
Social Security's combined trust funds are projected to allow full payment of scheduled benefits on a timely basis until the trust funds become exhausted in 2037. At that time, annual tax income to the trust funds is projected to equal about 78 percent of  program cost. By 2084, annual tax income is projected to be about 75 percent as large as the annual cost of the OASDI program. [2010 Annual Report Of The Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, 9/9/10]

Friday, September 9, 2011

SS and Ponzi: a few more words and a diagram

Nick Baumann of Mother Jones has an article about Social Security and Ponzi schemes which contains the following helpful Venn diagram. Show it to anyone who repeats the "Social Security is a Ponzi scheme" claptrap.

In my blog: Perry, Ponzi, Pfui I point out that Social Security and Ponzi schemes also have the common property that the payoff to previous investors -- now retiring -- is financed by current investors (workers).  SS is no more a Ponzi scheme than borrowing from a bank is a robbery.

social security ponzi scheme venn diagram 

(BTW, "pfui" was in the NY Times crossword the other day: I feel exonerated by Will Shortz. Nero Wolfe actually used the expletive quite a few times in Rex Stout's stories.)

Thursday, September 8, 2011

Beneath contempt, item # 3,604

Again, from last nights Republican "debate":

(BRIAN) WILLIAMS: Governor Perry, a question about Texas. Your state has executed 234 death row inmates, more than any other governor in modern times. Have you...
(APPLAUSE) [Some of the most vociferous of the evening.]
Have you struggled to sleep at night with the idea that any one of those might have been innocent?

PERRY: No, sir. I've never struggled with that at all.

(The vociferous applause even got Brian Williams nonplussed -- though not the Wall Street Journal writer James Taranto  who blames it on the liberals.)

Perry goes on to list all the safeguards there are for accused murderers -- safeguards that he and his followers mostly oppose, incidentally, such as legal appeals. He is currently pondering whether to allow DNA testing that might exonerate three prisoners on Texas' death row. You would think that for such a strong supporter of safeguards this would be a no-brainer...

Perhaps Perry should have read this about a likely innocent man who was executed in Texas, and the New Yorker story on which it is based.

Just for a moment -- whatever your religious beliefs or non-beliefs -- just for a moment imagine that the Jesus Christ of the Sermon on The Mount were in the audience. Could you imagine that Jesus applauding along with this crowd of Republican Neanderthals?

Beneath contempt, item # 3,602

Here's a bit of Rick Perry's take on climate change, from last night's display of Republican idiocy.

PERRY: Well, I do agree that there is -- the science is -- is not settled on this. The idea that we
would put Americans' economy at -- at -- at jeopardy based on scientific theory that's not settled yet, to me, is just -- is nonsense. I mean, it -- I mean -- and I tell somebody, I said, just because you have a group of scientists that have stood up and said here is the fact, Galileo got outvoted for a spell.

But the fact is, to put America's economic future in jeopardy, asking us to cut back in areas that would have monstrous economic impact on this country is not good economics and I will suggest to you is not necessarily good science. Find out what the science truly is before you start putting the American economy in jeopardy.

HARRIS: Just to follow up quickly. Tell us how you've done that.  (APPLAUSE)
Are there specific -- specific scientists or specific theories that you've found especially compelling, as you...(CROSSTALK)

PERRY: Let me tell you what I find compelling, is what we've done in the state of Texas, using our ability to regulate our clean air. We cleaned up our air in the state of Texas, more than any other state in the nation during the decade. Nitrous oxide levels, down by 57 percent. Ozone levels down by 27 percent.

(The Republican Debate at the Reagan Library -

This is totally laughable. Galileo wasn't "outvoted": he was threatened with torture and possibly death by the Inquisition in Rome, the exact analog of the present-day anti-science religious fundamentalists to which Perry so publicly and proudly belongs. In fact, serious astronomers and mathematicians largely supported Galileo, but were afraid to say so publicly lest they be broken on the rack or have their insides punctured by iron spikes (the way many religious folks have historically determined truth).

Perry, like just about every anti-science person, doesn't understand science. Science makes hypotheses and tests them. If they are contradicted by observation then they are rejected. However, even if 1000 experiments support  a theory, it is not "settled" permanently and absolutely: it is considered provisionally correct, with the warning that future experiments or observations may show it to be false. (This happened last century with Newton's venerable theory of gravity.) Only religious pronouncements are given absolutely and they almost never stand the test of observation (see Galileo and the Inquisition, e.g.).

The fact that every scientific society and maybe 98% of scientists not only believe in global warming, but also believe that it is largely human-caused is about as close to total scientific support as has ever, historically, been the case for a theory. Yet, even then, any true scientist will still hold that is may turn out to be wrong. However, this kind of honesty is just about the opposite position from that of the total know-nothings like Perry and his followers.

Finally, there is the garbage that Perry throws in about pollution: as a distraction from the follow up question about climate change. The only reason that Texas cleaned up as much of its pollution as it did -- and it still has some of the most toxic water and air in the country -- is that the EPA -- which Perry loves to hate -- made it do so. There are literally hundreds of articles documenting this; here's one from Bloomberg BusinessWeek. A majority of Americans are still supporters of the EPA -- they don't like to breath noxious air and don't like industrial waste contaminating their kids' bodies and minds.

Yet the Republicans are repeating over and over the Big Lie that cleaning our environment is bad for business.

Recently there have been a bunch of interviews with business execs from small and medium-size companies, about federal regulations. Almost unanimously they say that the regulations are not a significant problem for them; rather, they say, it is the lack of consumer spending, difficulty in getting financing,  and high insurance costs that prevent them from expanding and hiring. Here is a recent and well-publicized survey from McClatchy News. This is exactly the opposite of the stories that Republicans are making up.

Alright, there I go again: What part of "beneath contempt" don't I understand?

Wednesday, August 31, 2011

Cavesville Centre: a rant

Is it ever possible for Barack Obama to take a position without caving?

Yes, I understand that he doesn't want to appear to be "an angry black man." Yes, I understand that he wants to appear as the voice of reason and compromise.

Yes, I understand that he thinks that compromise is better than losing.

However, I think he is now hurting himself simply because people want a leader who is strong and is not afraid of fighting and winning. That's why they liked Reagan.

Obama is now rapidly approaching total wimpdom -- if he hasn't already reached that state.

Doesn't he understand that he was chosen in a national election, while Boehner is simply a representative of one congressional district? Doesn't he understand that Boehner is extremely unpopular with the American public? Doesn't he understand that people want him to pick a fight and win it already? To draw a line and not back down. If he constantly retreats from what he claims are his principles, how good are those principles if they are so easily relinquished?

Doesn't he understand that he has to put down the flock of Republican presidential aspirants by thumbing his nose at their twice rescheduled debate? He is The President and they are the Seven (or however many they are) Dwarfs of Fairytale Land. Can he be afraid of their anti-science stances? Can he be afraid of their support for the rich? Why won't he pick a fight with them and win it?

I am pretty partisan, but I am getting disgusted and disillusioned. This jobs speech better be pretty good and tough, and he'd better show total commitment to what he proposes. I've long felt that one should support and work for a Democratic candidate because if the Republicans take over, lots of folks less well-off than I am will get hurt. But now I'm beginning to feel that it doesn't make much of a difference with Obama since he can't be counted on to help the people he claims to be supporting.

Yes, Republicans are beneath contempt, and will do all in their power to enact policies that are truly harmful. But, just maybe, the best strategy is to let them, once again, have their way, and maybe this time the disaster they create will lead to their destruction as a political force. Maybe after this next disaster we'll get a president who'll administer the political coup de grace and not seek out bipartisanship. What, though, will it take for this to happen?

Monday, August 29, 2011

Perry, Ponzi: Pfui

Rick Perry recently recorded the following reflections on Social Security.

"It is a Ponzi scheme for these young people...The idea that they're working and paying into Social Security today, that the current program is going to be there for them, is a lie... It is a monstrous lie on this generation, and we can't do that to them."

The only thing that Social Security and Ponzi schemes have in common is that people who join later contribute to those who joined earlier. Some facts:

1. Social Security has always honored its commitments to older Americans. In fact, the U.S. government has routinely borrowed money from the Social Security trust fund, which has stored -- and still stores -- surplus funds from our contributions.

2. Social Security still has a net surplus, although it is currently paying out more than it is taking in. The main reason for this is the varying sizes of successive generations. The "Baby Boomer" generation which is retiring now was a very large one, while the generation that is currently paying for its retirement is much smaller. Also, because the Social Security "tax" (FICA) is basically a tax on the middle class (it cuts off at income above about $106,000), it is not doing so well because the middle class in the U.S. is not doing well.  While income of the wealthy, which is largely not subject to FICA (because of the cutoff), has been soaring, the income of the middle class has been stagnant at best for decades. Thus, the problem is not with Social Security but with the widening class and income gap in this country.

3. Actually, the situation is likely to be the exact opposite of Perry's description. The generation that is currently paying for the Social Security benefits of the Baby Boomers is a fairly small generation. There is a very good chance that the generation(s) which will be paying for its retirement will not be that much smaller -- maybe even larger. Thus, when the "X-ers" or whatever they're called reach retirement age there may very well be plenty of workers paying into the fund. I don't know the exact demographics, so perhaps some reader will fill in the numbers.

4. Unlike a Ponzi scheme, the problems of Social Security can be fixed in a simple and above-board manner: adjust the FICA tax so that everyone makes a fair contribution. This is easily and painlessly accomplished by raising the income cut-off for FICA contributions -- say from $106,000 to $1 million. Or, remove the cap entirely. This could be accompanied by modest (say logarithmic) increases in the amount paid out, based on contributions -- so those who contribute more would get somewhat more in benefits.

The simple fact is that 99.99% of Americans are very happy to contribute to the retirement of their parents and grandparents by paying the FICA tax. Social Security is not only popular with the old, but is also popular with the children and grandchildren of the old. Only Scrooge (or Grover Norquist) would make a principled objection to the efficient and dignified operation of one of the most popular programs ever implemented by any country at any time in history.

Ponzi scheme indeed! As the great fictional detective Nero Wolfe would surely have said to Rick Perry: "Pfui!"