A few days on the campaign trail have served notice that Texas Governor Rick Perry is about as extreme a right winger as it is possible to be. Since he is the current leader for his party's nomination in the polls it also shows how far toward the nutty fringe a Republican has to go these days to win the GOP primary electorate. One would think that some of these positions ought to make it exceedingly difficult for him to win a general election should he be the Republican standard bearer in 2012, as I believe he is likely to be.
Perry shows his antipathy to modern science by characterizing evolution as, "just a theory with a lot of gaps in it," and pollution-caused global warming as a "hoax" ginned up by a worldwide conspiracy of meteorology nerds. Rejection of the fact and data-based universe is apparently an article of faith in Republican ranks these days. It's hard not to wonder what such a stance would have on America's ability to compete in global technology should this latter-day know-nothingism penetrate into the pinnacle of leadership of the nation itself. Either Perry does not believe in science when it conflicts with his prejudices or he is prepared to babble nonsense in order to tell the ignorant what they want to hear. Neither alternative provides much comfort to the prospect of a Perry presidency.
The Governor is also adept at reading things into the Constitution that are not there. He has written in his book "Fed Up," published in 2010, that Social Security and Medicare are unconstitutional--not just that he disagrees with them, but that the Framers in 1787 somehow banned these programs. To refer to these most popular of federal programs as "scams" and "Ponzi schemes" does take guts. One can only imagine the effect on the senior citizen vote after a few months of publicity of these views.
He repeats the conservative canard that the Constitution was written to "limit government," and protect "states rights" when any eighth-grader can tell you it was to increase federal power over the states after the weakness and disunity of the former Articles of Confederation. His statement, referring to Texas, that, "When we came into the union in 1845 one of the issues was that we would be able to leave if we decided to do that" has exposed either his revanchist Confederate sympathies or a willingness to play to a constituency disposed to dismember the United States--a rather blatant violation of the Presidential oath of office, by which he would, if elected, swear to defend the Constitution "against all enemies."
He has topped these antics off by threatening Ben Bernanke, Chairman of the Federal Reserve, (originally a Bush appointee, by the way) with accusations of treason and veiled intimations of violence "we would treat him pretty ugly down in Texas," if he should deign to differ with Perry on monetary policy. This bull in the china shop buffoonery is what apparently captures the imagination of Republican voters these days, as Perry stands at the head of the current opinion polls. It is not, however, what will win a majority of voting Americans in a national election.
Monday, August 29, 2011
Sunday, August 21, 2011
Time for a Big Jobs Program
President Obama announced he will be coming out with a jobs bill after Labor Day. Here's hoping it will be something really big, because that's what the country needs. Incidentally, it would also be good politics for him too.
To start with, it's long past time we had a big jobs push. The fight over the debt ceiling that lasted most of the summer was a distraction from what most of the American public was interested in and what the economy really needs. The original stimulus from 2009 stabilized the free-fall but now has largely run out. This latest round of Republican-pushed budget cuts, to take effect sometime in late November, will do nothing for jobs. Spending cuts do not produce jobs; to the contrary, in order to institute them jobs will have to be cut. That's been the problem as job creation has stalled the past few months: modest gains in the private sector have been offset by downsizing in the public sector.
No doubt there will be some tax credits for companies that fill new positions in Obama's plan, but he needs to go farther. The principal reason hiring is slow is because consumer demand is weak. Consumer spending is 70% of the U.S. economy. Corporate America has been enjoying strong profits of late by cutting jobs and boosting productivity. Indeed, 96% of the top 500 companies were profitable over the past 12 months. They are sitting on an estimated 2 to 2 and a half trillion dollars in cash. American companies produced 1.0 million jobs in America in the pat year but 1.4 million overseas. The reason is that with high unemployment, skittish lending and hesitant buying patterns, demand is picking up faster overseas than here. Source for this paragraph. The solution? We need more jobs here, more money in the pockets of American consumers.
Since private business is not doing it, not only incentives but direct government hiring ought to take place. Many have called for a big push on infrastructure construction for part of this program. You can expect an "infrastructure bank" to be part of the Obama proposal in September. That is a good idea and ought to be done, but I feel his proposal ought to go farther. We have 8 million people out of work. Consider that directly funding 1 million jobs at $35,000 a year would cost $35 billion. When you consider a year of the war in Afghanistan costs three times that much or that the yearly deficit is expected to be over $1.2 trillion (thirty times that much) that amount is a relative bargain. If Obama were to propose opening up 2 million jobs right now for $70 billion it would have an electrifying effect on the unemployed and the economy. And for you fiscal hawks, it would only add 6% to the yearly deficit. Former Secretary of Labor Robert Reich has a ten-point plan for jump starting employment that makes a lot of sense. It includes a mix of tax and regulatory changes and direct government actions. Take a look at it here.
There is certainly plenty for 2 million people to do. Everything from classroom aides to neighborhood cleanup to weatherizing buildings to transportation maintenance to the huge backlog of postponed work at National and State Parks to care for the elderly--there are a host of productive things that need doing, would help the country, would restore a sense of purpose and hope in the lives of the unemployed and would return $70 billion of buying power to the economy.
It would be good for the President politically too. Would the Republican-controlled House of Representatives refuse to go along? Almost certainly yes. Their preference is Hooversim; do nothing and hope for the best. The contrast between a strong program to directly provide millions of jobs juxtaposed with further excuses for more inaction could only work to Obama's advantage in next year's elections.
To start with, it's long past time we had a big jobs push. The fight over the debt ceiling that lasted most of the summer was a distraction from what most of the American public was interested in and what the economy really needs. The original stimulus from 2009 stabilized the free-fall but now has largely run out. This latest round of Republican-pushed budget cuts, to take effect sometime in late November, will do nothing for jobs. Spending cuts do not produce jobs; to the contrary, in order to institute them jobs will have to be cut. That's been the problem as job creation has stalled the past few months: modest gains in the private sector have been offset by downsizing in the public sector.
No doubt there will be some tax credits for companies that fill new positions in Obama's plan, but he needs to go farther. The principal reason hiring is slow is because consumer demand is weak. Consumer spending is 70% of the U.S. economy. Corporate America has been enjoying strong profits of late by cutting jobs and boosting productivity. Indeed, 96% of the top 500 companies were profitable over the past 12 months. They are sitting on an estimated 2 to 2 and a half trillion dollars in cash. American companies produced 1.0 million jobs in America in the pat year but 1.4 million overseas. The reason is that with high unemployment, skittish lending and hesitant buying patterns, demand is picking up faster overseas than here. Source for this paragraph. The solution? We need more jobs here, more money in the pockets of American consumers.
Since private business is not doing it, not only incentives but direct government hiring ought to take place. Many have called for a big push on infrastructure construction for part of this program. You can expect an "infrastructure bank" to be part of the Obama proposal in September. That is a good idea and ought to be done, but I feel his proposal ought to go farther. We have 8 million people out of work. Consider that directly funding 1 million jobs at $35,000 a year would cost $35 billion. When you consider a year of the war in Afghanistan costs three times that much or that the yearly deficit is expected to be over $1.2 trillion (thirty times that much) that amount is a relative bargain. If Obama were to propose opening up 2 million jobs right now for $70 billion it would have an electrifying effect on the unemployed and the economy. And for you fiscal hawks, it would only add 6% to the yearly deficit. Former Secretary of Labor Robert Reich has a ten-point plan for jump starting employment that makes a lot of sense. It includes a mix of tax and regulatory changes and direct government actions. Take a look at it here.
There is certainly plenty for 2 million people to do. Everything from classroom aides to neighborhood cleanup to weatherizing buildings to transportation maintenance to the huge backlog of postponed work at National and State Parks to care for the elderly--there are a host of productive things that need doing, would help the country, would restore a sense of purpose and hope in the lives of the unemployed and would return $70 billion of buying power to the economy.
It would be good for the President politically too. Would the Republican-controlled House of Representatives refuse to go along? Almost certainly yes. Their preference is Hooversim; do nothing and hope for the best. The contrast between a strong program to directly provide millions of jobs juxtaposed with further excuses for more inaction could only work to Obama's advantage in next year's elections.
Tuesday, August 16, 2011
Perry's Entry is GOP Game Changer
The entry of Texas Governor Rick Perry into the Republican presidential field is a game changer. I rate him as odds on to capture the GOP nomination and face President Obama in 2012.
The dynamics of the Republican race are relatively simple. Mitt Romney is the early front runner. He appeals to the business community and the more moderate elements of the Republican coalition. The question to be settled is who will be the more conservative standard bearer to challenge him?
The Iowa Straw Poll, on the strength of some 4,800 votes, vaulted first-place finisher Rep. Michele Bachmann into contention as a prime challenger to Romney. Libertarian and isolationist Congressman Ron Paul finished second. Nobody else farther down the list, which included Tim Pawlenty who dropped out of the race based on a third-place finish, Herman Cain, Rick Santorum, John Huntsman or Newt Gingrich has any kind of realistic shot at the nomination.
So it will be Bachmann and Perry who battle it out for the anti-Romney mantle. Both are far right-wingers who appeal to both Tea Party fiscal zealots and evangelical social issues voters. In this contest Bachmann excels at firing up the base with red meat rhetoric. But she will, I believe, not be able to overcome Perry's edge in gubernatorial experience and the kind of country folksiness so valued as authenticity by Republican voters. And make no mistake, Perry is nearly every bit as conservative as Bachmann.
Once the primary season begins Bachmann will likely win the Iowa caucuses. Then Romney will probably take the ensuing New Hampshire primary. In a practical sense, both will need those victories to remain credible. But then Perry will take the South Carolina and Florida primaries on friendly Southern turf and be off to the races. Wins there will take the air out of Bachmann's campaign and leave Perry one on one against Romney. Perry will prevail because in the final analysis Romney is simply not conservative enough for today's Republican electorate. The party veers farther rightward every year and Romney is, in their mind, still tied to the moderate policies he agreed to as Massachusetts governor.
The dynamics of the Republican race are relatively simple. Mitt Romney is the early front runner. He appeals to the business community and the more moderate elements of the Republican coalition. The question to be settled is who will be the more conservative standard bearer to challenge him?
The Iowa Straw Poll, on the strength of some 4,800 votes, vaulted first-place finisher Rep. Michele Bachmann into contention as a prime challenger to Romney. Libertarian and isolationist Congressman Ron Paul finished second. Nobody else farther down the list, which included Tim Pawlenty who dropped out of the race based on a third-place finish, Herman Cain, Rick Santorum, John Huntsman or Newt Gingrich has any kind of realistic shot at the nomination.
So it will be Bachmann and Perry who battle it out for the anti-Romney mantle. Both are far right-wingers who appeal to both Tea Party fiscal zealots and evangelical social issues voters. In this contest Bachmann excels at firing up the base with red meat rhetoric. But she will, I believe, not be able to overcome Perry's edge in gubernatorial experience and the kind of country folksiness so valued as authenticity by Republican voters. And make no mistake, Perry is nearly every bit as conservative as Bachmann.
Once the primary season begins Bachmann will likely win the Iowa caucuses. Then Romney will probably take the ensuing New Hampshire primary. In a practical sense, both will need those victories to remain credible. But then Perry will take the South Carolina and Florida primaries on friendly Southern turf and be off to the races. Wins there will take the air out of Bachmann's campaign and leave Perry one on one against Romney. Perry will prevail because in the final analysis Romney is simply not conservative enough for today's Republican electorate. The party veers farther rightward every year and Romney is, in their mind, still tied to the moderate policies he agreed to as Massachusetts governor.
Monday, August 8, 2011
Inevitable Fallout from Debt Deal
First the Republicans in Congress took the debt ceiling process hostage. Then they held out for an all-cuts settlement that follows party orthodoxy. During the weeks of negotiations, investors were evidently not impressed with the deal taking shape. The New York Stock Exchange's Dow Jones Industrial Index fell by 1,000 points.
After President Obama signed it on the last day before the deadline, Speaker John Boehner (R-Ohio) declared with satisfaction, "I'm very happy. I got 98% of what I wanted." Obviously unimpressed, the Dow Jones Industrials fell by another 500 points.
Also clearly unimpressed, Standard and Poore's subsequently downgraded the United States' credit rating from AAA to AA+. This is the first time that has ever happened. Today, the first day the Stock Exchange was open after the downgrade, the Dow fell another 600 points.
So, the Republicans devised a settlement their congressional leader considers almost a perfect picture of how they would like to handle the federal budget going forward. And as a result, the value of American equity assets has fallen by about 18% in a month.
Even the business and investment community, frequently supportive of Republicans, recognizes their ideologically-driven approach to the budget for what it is--something that simply doesn't work, couched within a political strategy that reduces governance to gridlock.
Maybe now will come an opening for a realistic, "balanced" approach that fully addresses the problem? One can only hope, and if not, that the public will remember who crashed the bus when the next election rolls around.
After President Obama signed it on the last day before the deadline, Speaker John Boehner (R-Ohio) declared with satisfaction, "I'm very happy. I got 98% of what I wanted." Obviously unimpressed, the Dow Jones Industrials fell by another 500 points.
Also clearly unimpressed, Standard and Poore's subsequently downgraded the United States' credit rating from AAA to AA+. This is the first time that has ever happened. Today, the first day the Stock Exchange was open after the downgrade, the Dow fell another 600 points.
So, the Republicans devised a settlement their congressional leader considers almost a perfect picture of how they would like to handle the federal budget going forward. And as a result, the value of American equity assets has fallen by about 18% in a month.
Even the business and investment community, frequently supportive of Republicans, recognizes their ideologically-driven approach to the budget for what it is--something that simply doesn't work, couched within a political strategy that reduces governance to gridlock.
Maybe now will come an opening for a realistic, "balanced" approach that fully addresses the problem? One can only hope, and if not, that the public will remember who crashed the bus when the next election rolls around.
Wednesday, August 3, 2011
Time to Draw the Line
Now that the debt ceiling crisis has been placed on the back burner it's time to step back and survey the scene. The picture isn't pretty, and not just because "the parties can't work together" or "government seems dysfunctional." These things may be true, but the salient point to keep in mind is that the reason this is so is because the Republican Party wants it that way.
Raising the debt ceiling has always been a rather pro forma exercise. Yes, speeches have always been made to score political points, but the process has heretofore been a stand alone yes or no proposition, where the obvious answer has been "yes." Should the United States be authorized to pay the bills for things it has already purchased, and the salaries of the people to whom pay has been promised, or not? That has been and was this time the question at hand. It has never before been tied to future spending and projected budgets. No party has resorted to courting default and the ruination of the nation's credit--until the Republicans this time. The American, European and Asian markets are still in turmoil and losing money over this. It has been an exercise in raw extortion without regard for the consequences. The place to debate the budget is during the budget process, not the debt ceiling consideration.
In a similar vein, the 60-vote Senate threshold to overcome a filibuster used to be a rare occurrence, reserved for major matters of great importance. With the Republicans, this has now become routine, applied to every bill and appointment, regardless of whether it is controversial or not. The purpose is to bring operations to a halt. Click here to see a graph on how the use of the filibuster has quadrupled with the current Republican minority in the Senate. It is to the point where a Nobel Prize-winning economist, Peter Diamond, recently withdrew his name for nomination to the Federal Reserve Board in disgust. Sen. Richard Shelby, (R-Ala.) said he felt Diamond was "unqualified" for the job, and was backed by the typical lockstep Republican junta in support. A Nobel Laureate economist unqualified for a job as an economist? Seriously?
The President did get further debate on the debt ceiling proper delayed until 2013. But don't think the same strong arm tactics won't be employed again. As part of the settlement, a twelve-member Congressional "super committee" will be charged to report out ways to help balance the budget November 23. If they can get a majority, their report and recommendations will have to get an "up or down vote." If they cannot come to majority agreement, automatic cuts will happen to defense and discretionary spending. Social Security, Medicaid and Medicare recipients will be immune. Supposedly, Republicans will not want defense cuts and so will have an incentive to deal in good faith, including finding new revenues as well as cuts. Don't count on it. The Bush tax cuts are scheduled to expire at the end of 2012. Expect any deal to be held up unless President Obama and congressional Democrats cave in on this. The President says this time he will not budge, but since he has already given in on this before he will be tested on it again. Calamity and a government shutdown will be the threat in November. If the minority party, without even enjoying popular support for these stances in the polls, (60% feel there should have been some tax revenues in the settlement) can brazen its way on this, then the Obama presidency will be in serious jeopardy.
Sometimes it isn't enough to be the adult in the room. When one side doesn't care how much harm they do the country in order to get their way and can count on the other side being
"responsible" and giving in to prevent that harm, then the cutthroats have taken over the neighborhood. The Republican goal is to paralyze governance and then blame Obama and the Democrats for it. Sometimes you have to dig in your heels and say no. Obama and the Democrats had better start doing that. Now.
Raising the debt ceiling has always been a rather pro forma exercise. Yes, speeches have always been made to score political points, but the process has heretofore been a stand alone yes or no proposition, where the obvious answer has been "yes." Should the United States be authorized to pay the bills for things it has already purchased, and the salaries of the people to whom pay has been promised, or not? That has been and was this time the question at hand. It has never before been tied to future spending and projected budgets. No party has resorted to courting default and the ruination of the nation's credit--until the Republicans this time. The American, European and Asian markets are still in turmoil and losing money over this. It has been an exercise in raw extortion without regard for the consequences. The place to debate the budget is during the budget process, not the debt ceiling consideration.
In a similar vein, the 60-vote Senate threshold to overcome a filibuster used to be a rare occurrence, reserved for major matters of great importance. With the Republicans, this has now become routine, applied to every bill and appointment, regardless of whether it is controversial or not. The purpose is to bring operations to a halt. Click here to see a graph on how the use of the filibuster has quadrupled with the current Republican minority in the Senate. It is to the point where a Nobel Prize-winning economist, Peter Diamond, recently withdrew his name for nomination to the Federal Reserve Board in disgust. Sen. Richard Shelby, (R-Ala.) said he felt Diamond was "unqualified" for the job, and was backed by the typical lockstep Republican junta in support. A Nobel Laureate economist unqualified for a job as an economist? Seriously?
The President did get further debate on the debt ceiling proper delayed until 2013. But don't think the same strong arm tactics won't be employed again. As part of the settlement, a twelve-member Congressional "super committee" will be charged to report out ways to help balance the budget November 23. If they can get a majority, their report and recommendations will have to get an "up or down vote." If they cannot come to majority agreement, automatic cuts will happen to defense and discretionary spending. Social Security, Medicaid and Medicare recipients will be immune. Supposedly, Republicans will not want defense cuts and so will have an incentive to deal in good faith, including finding new revenues as well as cuts. Don't count on it. The Bush tax cuts are scheduled to expire at the end of 2012. Expect any deal to be held up unless President Obama and congressional Democrats cave in on this. The President says this time he will not budge, but since he has already given in on this before he will be tested on it again. Calamity and a government shutdown will be the threat in November. If the minority party, without even enjoying popular support for these stances in the polls, (60% feel there should have been some tax revenues in the settlement) can brazen its way on this, then the Obama presidency will be in serious jeopardy.
Sometimes it isn't enough to be the adult in the room. When one side doesn't care how much harm they do the country in order to get their way and can count on the other side being
"responsible" and giving in to prevent that harm, then the cutthroats have taken over the neighborhood. The Republican goal is to paralyze governance and then blame Obama and the Democrats for it. Sometimes you have to dig in your heels and say no. Obama and the Democrats had better start doing that. Now.
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