Time to Think Differently with Healthcare Reform: Time to lead!

New Republicans, are you ready to lead?

New Republicans, are you ready to lead?

We are at an historic position.  There has been a major political shift, one, that to no small degree, was driven by executive overreach over the ACA, or Obamacare if you feel better calling it that.  Now that the republican party has again been given the chance to lead the nation, can they do it responsibly? There are many pundits and many partisans that will conspire to do almost noting for the next two years other than to prove the republicans can’t .

For republicans, this is a chance to set a new and more prosperous tone for the nation and to prove to many more Americans that your ideals are correct, just, fair and will improve the lot of America and its people.

This is not simply about republicans or democrats any more.  This is about a populace that is disenchanted with government overall, that has lost face in our founding principals. We may be approaching a crossroads where our disillusionment over the American Experiment becomes so engrained and pervasive that what has been America for over 200 hundred years will fundamentally shift in ways we neither can predict nor will we want to see happen.

Both sides political ideologies have become all too important to their parties destiny.  No longer is it about what is good for America and then for Americans; it is now about what is good for us to be able to defeat the other guys in two years and again take control. Therefore, it is now apparently all about control.  If this continues then no member of the professional political class will ever be able to truly lead this nation again.  Now is the chance to get us back to leading!  Doing what is right for America, not simply rationalizing what is right in order to get the free stuff we want.

So to the new republican leadership: PROVE IT!  Prove you can lead!  Prove you can do what is right! Prove your only interest is in making America greater, and improving the lot of Americans!  Prove your ideals will be good for all, even when there is so called “Tough Love” involved in the process.

You can start by curtailing the partisan rhetoric over the ACA, Obamacare and healthcare in America.  Curtail the drive to make this the cause celeb. Curtail the need to win something. Embrace Ben Franklin’s form of “Compromise Through Tolerance!” Ignore the partisans and find real solutions.  Ignore the past of Obamacare, do not make change a resolution on Obamacare.  Make change by fixing what is wrong with the healthcare system in America.  Ignore the sins of the past and focus on fundamental change and build a blueprint for the future that will deliver the care we need to all and preserve the care we want for those that are willing to sacrifice to get it.

This can be done. Someday it will be done.  If you – republicans – prove you can do it, you may get granted another expansion of your authority in a few years.  If you can’t then you will not only doom your party, you just may doom the sacrifices of the founders of our great nation to the dustbin of history as yet another failed sociopolitical system of ideas that did not work.

If you want some fresh ideas on how to change the dialogue and deliver a truly effective, efficient and fair system see this: Health Reform 2.0: Beyond the Partisan Divide lies pragmatic solutions. If you agree and want to help get the new leadership motivated, tell everyone.

The problem with “The Chart”

This morning as I did my news walk, I came across this article talking about the most important chart in American politics.  And as you can imagine it caught my eye. I find charts and graphs to be either extremely informative or extremely deceptive. Seldom is there a middle-ground.  Often the deceptive charts are constructed specifically for that purpose. It is seldom a surprise to find such charts in an article about politics.

This chart was one of the exceptions that prove the rule.  But not in the way you might imagine.  “The Chart” is deceptive, but I do not believe it is purposeful in its deceit.  Why not, you may ask?  Because the story it is trying to communicate would be stronger if the authors actually new the truth behind the problem.  But, like so much today, the surface suffices to make an argument.  The other details make the argument more difficult to communicate as the story can get Continue reading

Eye of the Beholder: Me and my Arrow!

Eye of the Beholder

Eye of the Beholder

It was Lew Wallace (1827-1905) who said, “Beauty is altogether in the eye of the beholder.”

Since I began getting involved in Washington, DC with the debate over healthcare reform a number of years ago, I have wondered more and more about how we have arrived at such a place that every issue, every decision, every need is met with such partisan, fractional, divisive and inflammatory rhetoric. Today it seems that there are no discussions on any issue that doesn’t revert to, “they said this, and what they really mean, is that.”  Or, you can hear a statement from one side or the other to the effect that, “It’s clear that their agenda is to do X, Y or Z to harm us.” Any, and all, of these statements amount to “doodly squat” as Granny Hawkins would say! – a prize to anyone who knows this reference — without using the internet!

Spin is not a new concept

Nothing related to any issue facing our national interest today is devoid of some spin to gain advantage on some other tangential issue–related or not.  Not to pick on any one side, or the other, but how often do we now hear the phrase, unfortunately most recently attributed to Rahm Emmanuel, “never let a serious crisis go to waste.”  Or to be fair, the statement by Senator McConnell that the prime goal of republicans is to defeat the president. If you think Mr. Emmanuel or Mr. McConnell are the first to utter these kinds of ideas, that they meant them completely literally, or that it is not a practice by each side of the political aisle, I have a bridge in Brooklyn I am willing to sell you; if you can convince me you deserve it!

If you think hyper-partisanship and gridlock are new I again encourage readers to go to Google Books and look up some of the old papers from the late 1800s and early 1900s and read what was going on then. There are surprising similarities.

Agenda based legislation now the norm

During the drive for healthcare reform there were a series of changes to the goals of the legislation that occurred as the process spread to one committee after another.  Senator Kennedy began the current process of healthcare reform in the wake of the disastrous attempt during the Clinton administration.  The bill that he authored just prior to his death was the result of his long-term attempt to find some legislation that would be acceptable to people on both sides and improve the healthcare system.  The HELP bill, while clearly not likely to have conservatives jump up and proclaim it a triumph of modern legislation, was still a bill that he clearly had worked hard on to find areas of support from his political opponents and an honest attempt  to find methods to improve the healthcare system. Continue reading

The Pit and the Pendulum: Party politics today!

Constitutional Republic, Can we keep it?

Constitutional Republic: Can we keep it?

As the energy, of hate and discontent, from the election subsides and the act of actual governance once again begins to be considered the job of politicians, we are now hearing calls from the left, the right and the middle about all the things that are wrong with our political system.

Should the two party system be changed? Should there be a constitutional congress to amend our fundamental political system in order to better reflect our modern societal needs and wants? Should we make more fundamental changes and move from the constitutional republic constructed by the founding fathers to a simple democracy? (elimination of the electoral college is one such idea) Continue reading

A Post Election Poem: Explaining the unexplainable!

As I have been contemplating the aftermath of the election, I have been reading a lot from both sides trying to hear what they have to say about the election and what I find remarkable is the dialogue from within the parties as to;

  • why they won, why they lost,
  • why they have a mandate, why they don’t have a mandate,
  • how the American people clearly spoke for tax increases, how they people clearly spoke against the tax increases,
  • the majority voted for Obamacare, the majority voted against Obamacare

As I have listened to the various talking heads and pundits, increasingly I have become more convinced than ever that we simply can’t discern desired fiction from pragmatic reality. As a nation, we seem to see things in polar opposite. As I listened and read, a poem from my youth came to mind that I have reconstructed at the end of the article. Continue reading

Can Obama Win Election? It may be a minority opinion!

Do minority cultural characteristics belie the polling data?

If it is not already, this will be the consuming question for both parties over the next ninety-eight days.  Depending on your point of view the recent polls either show the race in a dead heat (if you are independent), Mitt Romney beginning to gain momentum (if you are republican) or President Obama beginning to pull ahead (if you are a democrat).  The main question is how accurate are the polls?  Here many pundits, again depending on their political persuasion have numerous cogent arguments as to why one view or the other is correct based on the sampling, Continue reading

The Supreme Court Decision: It hurts to be wrong-but it hurts more to be right and still wrong!

Now that we have all heard the decision by the Supreme Court on the Patient Protection and Affordable Care Act (Obamacare), perhaps it is time for some reflection.  I know as I read the decision Thursday morning, while I was waiting in the queue preparing for a radio interview on the issue, I felt both vindicated in my initial analysis, but also left wanting and inadequate for not seeing the sideways tax justification for its declared constitutionality.

First a recap

There were four questions heard by the Supreme Court in this case. Continue reading

Socialism again triumphs in France and Greece: Is America next?

Socialism trumps austerity in Greece, and France, is America next?

“Socialist Francois Hollande elected in France”

So, in both France and Greece, voters rejected the backers of austerity measures—Surprise, Surprise! This is no doubt the thought that most Americans had as they saw this headline in their morning paper.  For some the next question may be, “Is America going to be next?”

The two headed snake

America faces two major problems that could lead us to a French or Grecian style disaster. One is that we have the same problem in our economy; albeit we have been able to forestall, some say cover up, the problem since 1972. The second issue is we are deviating from the basic premises and rules our founding fathers established to preserve the American Republic and our engine of prosperity—capitalism.

Economic Collapse

America is very likely already at risk.  Our economic issues, the rapid unaccountable increase in currency since 1972, have caused a significant “hidden” inflation.  We have been able to avoid dealing with the fiscal realities because once we were off the gold standard and as a result of being the world’s benchmark currency most countries have had a vested interest in not calling us on the carpet.  While we have increased the amount of money in circulation from $500 Billion in 1972 to over $16 Trillion today, by most accounts an increase of over thirty-five times, no one believes that we have at the same time really increased the tangible net worth of the U.S. economy thirty-five times. Even accounting for the gains driven by technology, most would project only a $5 – 7 trillion economy at this point.

Constitutional Erosion

We were formed as a constitutional republic, specifically not as a democracy.  While early in General Washington’s first term as President of the new republic, a schism opened between John Adams, Alexander Hamilton, and other “Federalists” who believed in a strong central government structure vs. Thomas Jefferson, James Madison, and other “Democrats” who believed strongly in resting much of the power in the hands of the states; none of these protagonists were advocates for a change in the U.S. Constitution to that of a democracy.  All of the founding fathers knew that democracies simply did not survive.  They realized that while the idea of democratic principles had a place in government to preserve the voices of, and provide protection for, the people; only a republic, backed by a constitution could provide the pragmatic offset to self-serving rules benefiting the masses at the long term expense of the republic itself.  They knew from history that democracies had a way of falling into revolution on the one hand and anarchy, socialism, or communism on the other.

While it can be said that the U.S. Constitution has served us well and that the strength of the republic carried us though many international crises since our founding, it has not protected us against ourselves and our own instincts to seek an easier road to survival or a weakening of our requirements for personal responsibility.  Beginning in the early 1900’s the so called progressive movement attempted to re-frame our nation as a democracy.  Slowly, our own view of our role as Americans has shifted from what we can do for our country, to what we expect to have our country provide for us.  This shift became so dramatically clear after World War II, that on January 20th, 1961, then President John, F. Kennedy in his inaugural speech felt it necessary to try to remind America’s youth that there was a higher ideal they should aspire to. He said clearly, to all Americans, “And so, my fellow Americans: ask not what your country can do for you— ask what you can do for your country.”

Many scholars now believe that there has been a steady erosion of the constitutional basis for our republic as a result of many historical actions to affect short term problems.  Conspiracy theorists believe there has been a conscious effort to change us from a republic to a democracy by those in the Democratic Party.   Conspiracy theories are hard to fathom because it would need to attribute way more intellect and forethought to human beings that experience and evidence suggests.  History simply shows us that a series of decisions and events, each made for short term pragmatic reasons, have culminated in an ever increasing loss of core values.  You see core values are hard, they require sacrifice, they require risk, they require adherence to principals larger than us. It is by their very difficult nature that we define these values as part of one’s character, and it is this reason that we innately want to find ways to rationalize away these very responsibilities.

For about 100 years, we have been rationalizing away these values.  We have softened our education system and stopped teaching the detail of what it means to be a republic or an American.  Ask any American, under the age of sixty, what form of government we have and more often than not you will hear that we are a democracy.  If you press the point and ask what being a democracy means, they will say that the majority is supposed to rule. Interesting is it not that an ideal that brought unanimous approval to the Constitution of the United States by the founding fathers is now a tenant of which most of us are woefully unaware!

What is even more illustrative of the change to our national values and psyche, is the fact that Jefferson, Madison, and others, who were the foundation of the original Democratic Party, were strong advocates for a weak central government and felt that governing power needed to be as close to the people as possible thereby vested in each state. Also, I find it fascinating that the term “progressive”, now used as an invective by republicans as a cudgel to hammer democrats was originally an outgrowth of the republican ideals of the early 1900s. How is it that the party personalities can have so radically changed yet we remain blissfully unaware that the way we encapsulate ourselves is so transient?

Is America next?

While many of the same people who today believe we are a democracy—and believe that democrats stand for big government, that republicans want to hurt the middle class for the benefit of the rich and have no interest in helping the poor—also believe that there is no way that America will suffer the same fate as Greece, or France, or many other countries. Maybe it is time we asked ourselves some hard questions:

  • Have so weakened our own understanding of who we are, what our country is founded on, and what it is that protects us from such a declination that we no longer know how wrong we are about our own base assumptions?
  • Have we allowed this gradual debasement of personal responsibility, in favor of government entitlement and forced corporate reallocation of wealth, to go so far that a fundamental shift away from the principals of our own constitutional republican form of government is unrecognizable?
  • Are we electing leaders that are doing what is in the best long term interest of America, or are they simply willing to do whatever will get them the votes to be re-elected?
  • Do we really believe that a safety net for the helpless is the same as entitled services for all including the clueless and the worthless (fraudsters)? And do they believe that after years of hyperinflation of the currency we can continue to just print money out of thin air to pay for it or that the so called “rich” in America have enough to pay for everyone else?
  • Are we really immune to the fate of these other countries, or have we already suffered the economic collapse and have just been covering it up by printing more money and manipulating our economy to rationalize the perception of great gain?
  • When will this all come crashing down on us, or has it already started and we are just ignoring it? Is this why it is now so much fun to watch reality TV and revel in the catastrophes of other’s lives because it allows us to feel we are still better than them? Is it possible that is why the spectacle of the Coliseum in ancient Rome became so popular, because it helped hide their reality of the oncoming demise?

One last point to ponder!  If you think that we really have not lost a national understanding as to how our government functions, think of this.  No one can explain why we still have the election of the President of the United States conducted by an electoral college instead of by popular vote.  There are many who argue this is an anachronism, a relic of days before computers, and broadcast media but this is sophistry that would make the ancient Greek philosopher, Zeno, very proud. The electors have always had a duty to vote for the best candidate, not the most popular, and not the one that promised the most free-stuff.  The best candidate, the one that was best for all of America is the responsibility that rested in the elector’s hands. Now, many states have changed their laws to alter the rules for the electors to now only vote for the candidate that receives the majority of the popular vote—winner take all.  What happens if that candidate commits a heinous crime, or it is discovered that he is morally corrupt, or that he or she is conspiring to damage the country?  Are they still bound?  They did not used to be!

The final question is, “Are we about to become France, and Greece, or have we already suffered the same fate, and all that is left is the counting?”

What is wrong with politics?

Constitutional Republic

People that know me well know that I read.  I read a lot.  I read incessantly, I read everything and anything. I read everywhere, written by anyone, left, right or middle—it does not matter.

I long ago came to the conclusion that whether or not I agree with the points made by an author, this should not be the guiding principal of what I choose to read.  I find that, in fact, I learn the most when I read things I do not innately agree with.  In reading the contrasting opinions of others, and for the most part with the intent of maintain an open mind, I can try to compare their journey of understanding, expressed in their logic, if it exists, and either validate, or repudiate, parts of my own logic. Hopefully, coming to a better understanding and opinion myself.

Whats the problem?

I am not so sure that this is what people really do anymore!  It seems to me more and more people are only interested in letting someone else tell them what to think!

Recently, I have seen a series of articles, from both sides, trying to answer the question of what is wrong with our political system.   Each side is spending lots of effort, and ink (or electronic bits), explaining how the system is not working because the other side is conspiring to subvert the system to harm something or someone, or to benefit something or someone at our expense.  They often formulate the basic justification as this is clear because we are not getting what we want from the system.

Wrong Premise

The problem for me, as I see it, is the entire premise is wrong!  By starting with the logic that something is wrong because we (pick either side in the argument) are not getting what we want, may be logical but it is not accurate on two levels.  First, the assumption that the system is designed to give us something that we want in the first place, is not a correct assumption.  Second, the idea that the system is designed so that whatever the majority wants is to be provided to us by the government, is also not true.

System is working fine

The reality is that our political system is still, for the most part, working as it was designed despite the slow erosion of some of the original checks and balances over the past seventy-five years.  If you doubt this premise, read any of the biographies of Washington, Adams, Jefferson, Monroe, or Franklin and it will quickly become quite obvious that this was the design.

No, the system is still working just as it was intended.  The problem is not the system. Although, if we do not begin to understand the impact of the gradual changes we have made, soon this may not be the case.  The problem with the system is we are now starting to get what we want, and compounding this problem we have been for the last fifty or sixty years.  We are, in every corner, probably right or wrong, getting too much.  No, it is not the system that is the problem it is:

  1. The changes we have allowed to be made to the original system have weakened the checks and balances on our own greed and avarice
  2. What we expect that we are due from the system has grown exponentially as we have gained more from the system

The system is being changed

Our system was designed to be based on part-time citizen politicians directly subject to the impact of the laws and policies they create, not a ruling elite political class exempt for their communities day to day trials and tribulations.  At the very beginning of the implementation of our new form of government, in April of 1789, the grand design of our form of government showed the promise of its innate slow and difficult process to sort out where power and responsibility resides and to make difficult the ability of the federal government to pass laws that affect us.  Rapidly, the two competing philosophies, which I believe are inherent in mankind, congealed into two political parties.  The federalists, who advocated a strong federal government authority to foment consistency, rapid growth, and strength, became one pole, and the republicans, who were concerned about the rise of a tyrannical aristocracy or hereditary monarchy developing a predatory system reducing the rights and prosperity of citizens through taxes and needless, unwanted, regulations who advocated for government controls closer to the people at the state level.

While for over sixty years our education system has taught more, and more, that we are a democracy, and that we are by nature a nation where it is the majority that rules, this was specifically and unequivocally not the government that the founders created.  We were, and to some extent remain, a constitutional republic.  The difference is; in a democracy people have a direct control through their vote, and in a constitutional republic the control is indirect through the election of officials who are supposed to weigh the will of the people against what is best for the country and consistent with the constitutional republican principals of our government as they make law and policy.

System is still fine—For Now!

Today we are clearly migrating away from some of these fundamental principals in two areas:

  1. We now, as a people, no longer understand the benefits of the constitutional republic and many, if not most, simply believe we are a democracy, and
  2. We have inadvertently allowed the creation of a stronger federal control by stimulating the creation of a full-time professional political class—potentially, just the kind of tyrannical aristocracy that Jefferson and Madison were so worried about at the beginning of America.

The question we all need to answer is, “Is this what we agree we truly need?”  If so, then we will have to accept the consequences of a pandering democratic machine continually taking prosperity from the individuals and granting it to the majority in exchange for the continuation of their livelihood as a full-time professional politician, and the continual erosion of the original system of government and its checks and balances on them and us.

If this is not what we agree we need, then there are some very hard choices and changes we will need to consider to recover the checks and balances.  Only then can we once again return to the constitutional republican form of government we had. If this is still what we want!  You see that is the question!

Still up to us to define our system for a while longer

The good thing is it is still up to us for a bit longer.  The more we continue the erosion of the checks and balances inherent in our original constitutional republic, the more we become a democracy.  At some point we will slip over the edge and soon, perhaps, there will be no going back short of another costly and divisive civil war.  If our leaders can develop a true process to decide this fundamental issue we may avoid a destructive conflict.

And the answer is?

So the answer to the question that headlines this article, “What is wrong with Politics?” is nothing at the moment, but stay tuned!

The State of Whose Union?

The President Reads the State of the Union Address

I have tried to resist responding to the State of the Union Address last night.  I really have tried!  But, you guessed it, I can’t.  I was so astounded by much of the rhetoric that passed through the President’s lips as unassailable facts I still can’t believe much of it.

As I am want to do, let’s review some real facts for a few minutes….

The President said the State of the Union was getting stronger

Well this really depends on what you choose as your measures and of course how hard you decide to spin them.  Here are some key statistics that were not highlighted in the speech.

Some of the pundits, immediately after the president’s speech, were very quick to remind everyone that President Obama inherited this bad situation.  That’s true, and so have every president since President Lyndon Johnson. in 1964.  The fact that they all have inherited it is not the relevant fact.  It is the fact that every one of them neither fixed it, nor improved it one iota.  In fact here is another little fact.  Everyone of them in some way or another actually contributed to making the situation worse-Republican and Democrat.  All they did was find ways to patch it, give more to those they thought deserved it (meaning would give votes to get it),  printed more money to pay for it, and hoped it didn’t all come apart before they got their golden parachute.  Well it has come apart now, hasn’t it.

“Fairness for all, Responsibility from all”
– President Obama 1/24/2012

Part of the problem I have with last night’s speech is the President stating he is going to make sure there is “fairness” for all.  It is not his wanting for people to have a fair shot that bothers me.  Everyone I know, if asked, would say they want fairness.  But fairness like many other things in life is a frangible and perspective driven concept.  It means different things to different people, and sometimes different things to the same people on different days depending on where they are and whether they are the beneficiary of the supposed fair treatment or not.

I just do not think anyone can give another fairness.  Often, the act of a group, or government, attempting to make something fair takes the form of redistribution or reallocation of something from one group or individual to another.  Look at the controversy surrounding Affirmative Action in Education and the implementation of quotas to make it fair. I am not challenging whether this was a good idea or not,  I am pointing out that in creating a quota to make it “fair” for one person or group, you simply are redirecting the opportunity from another person to this person.  If the person your took it from had nothing to do with the disparity in the first place then they now are being placed in disparity. Even in California, one of the strongholds of humanistic belief and liberal thought, some of our most liberal politicians have recently stated that we all need to get used to disparity.  That after 40 years of public life she now understands disparity must exist ; no mater the cost it cant be eliminated. It seldom works to try to make something fair by treating others unfairly—ask any six year old!

Frankly, if you look at other countries and other systems of government, America is just about as fair as anything could be given human nature in the first place.  I mean really, you think most of Africa is fair?  How about China?  Russia? Saudi Arabia?  Most other places are decidedly less fair than America.  So when people say we have some very deeply built-in unfairness, they usually are speaking in narrow terms.

Historically, if you look at our specific history in a vacuum, we’ve had periods where specific classes, specific races, and specific genders were treated unfairly.  This is very true and not something to be proud of in our newest age of enlightenment.  But once again, the facts are, that while we had these uncomfortable periods of our history, contemporaneously America was still head and shoulders above the rest of the world at the time.  We can always strive to do better , to be better people, to be better to each other, but no government can impose fairness nor can it replace the personal responsibility and character we should all instill in ourselves and our families.

Responsibilities from all

He used the term, “Responsibilities from all”.  The phraseology struck me oddly.  While I suppose it is grammatically correct to say that responsibility comes from somewhere or someone, I am not comfortable with this statement.  After thinking about it this morning, I realize this is because I believe responsibility should be innate in each of us.  That responsibility does not come “from” anywhere.  I feel that responsibility is part of our character and while it may flow from us it does not flow to us.  To try to illustrate this point, let me say that part of my responsibility, as I see it, is to help others.  In fact if I do help others I am being responsible.  I also feel that if I throw a baseball and it bounces and breaks your window, I should be responsible to fix the window. Fault in actions are in some way offset (not excused) by the exercise of responsibility for the fault by, or within, the individual.

I do not feel, however, that if you robbed a liquor store that it becomes my responsibility to pay for it. I assume most feel the same way.  But, I also feel that I am not responsible for any of the third party circumstances that you may have encountered in your life that led you to rob the liquor store.  I worry that the president believes that we are responsible for what others choose to do.  That somehow it is our responsibility to make sure they do not do something harmful or at least find themselves in circumstances that lead them to do something wrong.

In my life,  I have listened to many people justify their bad actions based on some set of circumstances that led them to do what they did.  I have heard things like; I was abused by my parents, my mother was an alcoholic, my tire blew out and because of my crack addiction I did not have enough money to get a cab so I could not get to work. Often, somewhere in each of these excuses became an attempt to transfer the responsibility to me or others because we somehow allowed the parental abuse, the mothers alcoholism, or the existence of crack cocaine– all of which if eliminated from this persons past would have somehow supposedly stopped the bad action in the first place so therefore–ipso facto– it is my fault, or your fault,  they did whatever they did.

I think these are some of the fundamental differences that divide us today.  I think the concept is attractive to take the position that everything that affects me is someone else’s fault or greed. Words like compassion and fair-share sound so good against the backdrop of greed, oppression, poverty and sacrifice.  But frankly, this is not what the fundamental issues we face are about.  It is now about our viability–national and economic.  We have destroyed our economy, and our viability, because we have systematically, over the past 100 years, made decisions for self gratification and personal appeasement of abstract goals that have affected our production, our cost effectiveness and our competitiveness in this new one-world economy.

We used to be the world leader in fisheries, agriculture, clothing, steel, oil, coal, automobiles, aircraft, raw production, basic manufacturing and many others.  But we have made decisions that have altered our ability to be in these industries at all or to be competitive in them.  Child labor laws killed the textile industry in New England, increasing labor costs and environmental laws killed coal, steel, oil and fisheries. Increasing labor costs, over production and now subsidies have effectively killed agriculture.  And overall for the rest the increasing costs in general, including labor costs, taxes, mandated benefits and shrinking labor pool (skilled and unskilled) have killed much of the rest.  Along the way, we have become a nation or middlemen, service providers, who purchase most of what we consume from other countries than we make ourselves.  Each year we bleed cash from our treasury to other nations workers.  Since 1972 this has exceeded $12 trillion.  That 12 trillion dollars more spent in buying stuff from other countries than we have sold to other countries.  This is one huge reason, but by no means the only reason, that we are circling the drain the way we are.

We have abandoned many industries because we felt there was just cause to do so.  Again, I am not saying any of these decisions were good or bad.  You need to make that call for yourself.  But, we have willingly walked away from most of the industries that led us to our short lived prosperity.  As we have embraced the “one-world economy,” we have killed our own production, rapidly and drastically increased our costs, and decided that we no longer can try to influence who goes to college (destined for middle management) and who works in the fields, the factories, and the plants.  In order to feel good, everyone has to go to college.  When we need labor, we relay with a wink, wink — nod-nod on immigration.  Since legal immigration is expensive and takes a long time we have a large illegal immigration problem–and we sit and wonder why!

As we have been indiscriminately printing money since 1974 we have lived in a fantasy land.  It is a wonderful place to be, don’t you see:

  • Everyone goes to college
  • Everyone can own a house
  • Everyone gets a car
  • Everything is fair
  • Everyone is a millionaire
  • Everyone has everything they want
  • No one needs to worry about getting sick
  • No one needs to save – in fact we need to borrow and spend more
  • Someone else will build it
  • Someone else will maintain it and clean it
  • Someone else will pay for it

In this fantasy land, the government will see to it that all the above just happens.  We don’t need to worry or pretty little heads just pay the taxes it will all be fair.

Shrinking Middle Class

The president has brought this up over and over recently.  Our president is a master at using language to infer that the middle class is suffering because of individual greed, because of Wall Street, because of corporations, because of millionaires and billionaires…. The truth of this is that the middle class are suffering because they have lost the value of what they earn disproportionately to everyone else–poor and rich. They are not poor enough to get in on the gravy train that is now the myriad government subsidies that over one-half of the population receive, nor are they rich enough to use investments to hedge the loss of value by playing the inflated earnings game that has been the finance,  investment, and real estate (FIRE) economy game for the past 40 years.  They have been screwed!  One reason the number of the middle class in the population is declining is we are raising the level of eligibility of programs for the poor. And along with that the cost of the additional program subsidies is coming from the middle-class and the rich in the form of taxes and higher costs, the rich just don;t feel it as much because they can invest enough of their money to offset the loss of value. Like the subsidies for industries and the poor, some portion of the new money ends up as liquidity in the stock market because the banks put it there! Can you say Quantitative Easing?

What was not mentioned by the president is equally telling

The Affordable Protection Act, his singularly biggest achievement — if you count it that way, was only mentioned in passing.  His own administration has had to admit that there are many things in the legislation that are either unfordable like CLASS, unworkable like the Medicare M.D. fix and the plan to have the IRS as the reporting agency, or potentially unconstitutional like the insurance mandate.

Medicaid, Medicare, and Social Security, like many other things are items that this president inherited.  Unlike most they are the biggest, and most insidious, causes of the loss of value to the middle-class and the destruction of our economy.  Once again, I am not making a value judgement on these programs or whether or not they should exist.  They simply have become what many feared at the time of their creation, much larger drains on our economy then was planned for.  Also, since most of the money that was created since 1974 has been needed to pay for these entitlements, along with the accumulating trade deficit, they are collectively the main reason that the money came into being and as such the main reason that the real value of the middle class has declined so drastically.

In the end, you have to ask yourself why the president spent so my time decrying the state of our economy, our industry and our people but then offered as a solution a panacea, of no pain, more money, more taxes, more subsidies, more for the poor, more from the rich, more subsidies for non-profitable industries no plan for increasing domestic primary production, and nothing about solutions for the real problems we face?  Well I guess it really is about re-elections not solutions.

In Closing

While the president may have appeared to be the brunt of my ire in this piece, it really is extended to all members of the full-time-professional-political class.  DNC or GOP the rhetoric and practice of opponent vilification and liberal application of what amounts to noting but wall paper paste needs to stop. Real solutions need to be proposed and vetted in this election process.  As a Mugwump, if a candidate does not start to tell me how they are going to fix the real issue and elucidate exactly what the pain points will be for everyone, then I am not voting for them regardless of the party.

If there ends up being no one; then I may not vote for anyone.  If that happens then it probably won’t matter because it will be too late.

The Two-Bit-Kid vs. The Come-Back-Kid: Which do you want for your candidate?

Entering the Florida primary-of-the-moment race  are ‘The Two-Bit-Kid‘ (Mitt Romney) versus the ‘Come-Back-Kid‘ (Newt Gingrich).  Clearly, Newt has earned the title the Come-Back-Kid, as he has been counted out at least three times in the recent months by many pundits on the left and right. I have called Mitt the Two-Bit-Kid for his inability to gain or stay above 25% in the polls for more than just short period. Often, he has risen above this apparent wall only when others implode, sometimes on their own, and then sometimes with a little help from his friends.

Is it just me, or if you’ re a Californian doesn’t Herman Cain remind you of Willy Brown? Or Marion Berry if you’ re from DC?

The Republican race thus far has not been an awe inspiring process has it?  If we were to take a path along the lines of creating the next “Steve Austin” we clearly could have combined the candidates into our own “One Billion Dollar Elephant Man.”  We could have taken Newt Gingrich’s brain and policy experience (Newt is consistently one of the smartest guys in the room–and he knows how to nail those that the people want nailed!), Hermancain’s simple 999 style(I say Hermancain because, I have never heard any other name for him.  I can’t even tell if this is his first or last namecan you?) Let’s add in some of Rick Perry’s reversion-airy ideas on converting our professional political class back to part-time citizen politicians (something that is definitely needed). How about some of John Huntsman’s ability to speak Chinese (he could tell Chinese Premier Wen Jiabao the inside dirty jokes or tell them where the best Chinese food is in Washington, DC–who would know?) Let’s take some of Ron Paul’s views on the Federal Reserve (and their big bank cohorts)  and their complicity and obfuscation in the current financial crisis (and perhaps his relationship with Arthur Dent, a hapless Englishman who travels the galaxy, could help if the aliens lose all common sense and decide to invade the planet–Come on, you think he doesn’t know him personally?) Now let’s put in a dash of

John Huntsman seems like a nice enough person but he reminded me of a bobble-head doll every-time he spoke!

Rick Santorum’s ability to keep talking to everyone while not  really enhancing the conversation one iota, but seemingly not pissing people off (other than convincing them he is really truly a conservative–and after-all to Rick, that is all that matters right?), Michelle Bachmann’s attractiveness to the Tea Party and her singular focus on repealing Obamacare (Do they still find her attractive?–I mean in a political sense of course), And Mitt Romney’s uncanny ability to continue to run for president after, what is it?–eight years–wining only one state and still not get more than about 25 percent of the electorate interested in him, but still he continues. (Don’t forget the hair–Mitt has great hair! The best that money can buy!)

Please, will someone tell Mitt Romney not to put jell on his implants? It makes them look like a well cultivated cornfield owned by some anally-retentive Iowa farmer.

Now, if we could pull that off we would have the One Billion Dollar Elephant Man (BDEM).  The Republicans are going to need this to go up against the One Billion Dollar Donkey Man(BDDM). (I thought about using the pejorative that I know many of you are thinking but, it would not be appropriate!) Oh yea, he already has one billion dollars doesn’t he!  I think we should put this fact in a bit of perspective.

Lee Majors vs Barack Obama

I did not realize, until I began to research this article, that the show The Six-Million Dollar Man began in 1974.  The same year that President Nixon took us off the gold standard!  Now, how about that for a coincidence!  Lets take a look at what it is going to cost to build a modern replica of Steve Austin and compare that to what either the BDEM or the BDDM is going to actually cost us all.

In 1974, when Steve Austin was being constructed to protect mom, apple pie, and the American way, He cost America $6 million to build and there was a total of $500 billion of currency in circulation (CinC.)at the time.  That was about 0.0012% of the total money in circulation.  Now, if we look at the Billion Dollar Donkey Man or the proposed Billion Dollar Elephant Man, using the benchmark of Mr. Austin, either of these candidates should only cost about $192 million based on having almost $16 trillion total Currency in Circulation today.  But, they will likely cost at least $1,000,000,000.00 each! That equates to 0.0625%–an increase of 520.83%. That is an inflation rate of 13.71% per year since 1974. What do we get for our money?

That’s a 520% Increase!

I guess we should not complain all that loudly, should we?  We only had a 520% increase in the cost of the $6 million dollar man but we increased the total amount of money circulating in our economy by 3,200% Yep, that’s correct! We increase the total amount of money in our economy 32 times what it was in 1972. And of course the value of all the assets of the U.S. increased 32 times as well didn’t they?

While our ideology, and its complete polarization, have made for great copy; no single person or party is responsible for this mess.  We all are!  As I read the paper this morning, I start to see the new push against Gingrich as angry, unpredictable and undisciplined.  I see the attacks on Romney as not in touch with the common man, driven more by greed, and not able to close the sale with voters.  Overall I saw so what!  In sales and marketing there is a thing called the “so what test!”  If after someone tells you something they think is a selling point you can say so what, then they have not made the sale!  I think we need to all say so what a bit more!

Conversely, now I hear, over and over, how the democrats are more afraid of Romney than Gingrich–that Gingrich has so much baggage they feel they can easily beat him. And as Yul Brenner said in The Kind and I, “Etcetera….  Etceteraaaa….  Etceteraaaaaaa!”  Deep inside, when I hear this I wonder if the words of the queen in Shakespeare’s Hamlet ring true?

_____________________________

Player Queen:
Both here and hence pursue me lasting strife,
If once I be a widow, ever I be a wife!
Player King:
‘Tis deeply sworn. Sweet, leave me here a while,
My spirits grow dull, and fain I would beguile
The tedious day with sleep.
Player Queen:
Sleep rock thy brain,
And never come mischance between us twain!
Hamlet:
Madam, how like you this play?
Queen:
The lady doth protest too much, methinks.
Hamlet Act 3, Scene 2

_____________________________

Logically thinking about this, I am not sure I agree with the conventional, or contrived wisdom, that the Democrats are more afraid of Romney.  He has more money at this point, he is more organized, and his background accomplishments key him up directly as the economic foil to illustrate the Presidents economic failures.  In the long run, if we get our collective heads out of our nether regions, I don’t think the rap against Romney on his fiscal achievements, and liabilities,–Bain Capital, taxes et. al.–amount to much in balance.  For everyone who begrudges him his success and fortune, others will want him to translate these skills to work on their behalf.

Likewise, Gingrich may have baggage, but it just different baggage.  Like the others, in many of the attacks on Gingrich the supposed weaknesses also become strengths.  Unpredictability, is well, unpredictable.  Unpredictability makes it difficult for others to prepare their game plan and stick to it.  Clearly, Newt is the strongest debater, and by almost every account the smartest man in almost any room.  Some have charged this leads him to be undisciplined and that his idea-a-minute brain makes it hard for others to find focus and achieve.  Clearly, this is not the case for some others.  Newt himself has had a disproportionate share of successes, accomplishments and achievements in his lifetime.  Recognized as a quintessential American, more along the lines of the early framers and founders.  He is and been a successful politician, author and consultant. He has been Times Man of the Year in 1995 for his role in leading the Republication Revolution and creating the Contract with America, Earned his PhD from Tulane University, has taught History and Geography,  founded Conservative Opportunity Society, American Solutions for Winning the Future, The Gingrich Group, and the Center for Health Transformation and co-authored over 27 books and documentary movies. Yes, his marital history and admitted infidelities are cause for some to find him inappropriate to hold the office. A number of our founding fathers had similar transgressions.  And for one I am really tired of this as a litmus test for an elected candidate.  I want someone who can lead the country, come up with good ideas and solutions and fight hard and passionately to bring them forward to conclusion.  I want someone who will call things as they are.  I am tired of the politically correct version of our history and our life.  Most importantly, I am tired of our desire to offend no one standing in the way of our ability to recognize the issues on either side and deal with them effectively, timely and efficiently.

Newt has baggage but he also has a long and diverse list of accomplishments!  While Romney resonates with women Newt does not.  While Newt creates the feeling that nothing is beyond his intellect and willingness to take a risk and to fight the full fight, Romney often appears to favor the safe path.  Overall, Newt presents to Americans the Passionate Risk Candidate, while Mitt presents the Safe Bet Candidate.  Who will eventually win may still be anyone’s guess.

Being a Mugwump, I will end up voting for the person that I believe will do the best job and accomplish the most.  There are things that are attractive to me about Newt as I feel what we need now is a fighter, someone who is willing to passionately address the issues we face both inside our nation and abroad.  I think now, I want someone who will not play it safe and who will take the risky path and fight for the best outcome.

I do not worry about Newts baggage, I am concerned that we have changed so much as a society that we no longer want citizen politicians with all their flaws–just read any of the recent biographies of Washington, Adams or Jefferson and you will see what I mean they were all flawed men.  I am worried that today we want political-celebrity-rock star-gods.  We seem to really want to have a Professional Political Class, telling us what to do.  We seem to be willing to accept anything they do as long as they do not become regular everyday people like us!

There are things about Romney I like as well.  I like his tenacity, his success, and his history in the private sector.  His religion and long term commitment with his wife neither sway me nor bother me.  I am not voting for a political-celebrity-rock star-god.  I will vote for the person I think can and will do the best job.  I am still forming this opinion, but I am now down to two candidates only.

What I am most concerned about is us!  I am concerned that the criteria we are using to select our next president is not based on the things we really should be evaluating.  We have said in years past, mostly in furtherance of political objectives, that it is about character.  I think in some cases character matters.  But like everything else, even a persons character has to moderated against the other factors and issues we face.  Genius lies in many people, many cultures, many demographics, many ethnicities, and many degrees of fidelity.  Overall, I want the best person to solve the problems that our country faces today.  The characteristics I have looked at in many ways become conflicting with each other and sometimes conflict with basic human nature.

What do I want?

  • I want plain talk, I want workable solutions, I want clear answers,
  • I want a dedication to America more than I want a dedication to my own self interests,
  • I want someone who knows how to get things done in Washington DC, I also want a citizen politician,
  • I want a strong leader, I want a leader to balance compassion with responsibility,
  • I want a person who can elevate the nation, and myself,  to a new level of greatness in the world,
  •  I want someone who believes enough in our capability to think big thoughts but deliver pragmatic solutions,
  • I want a leader who builds admiration and respect in our nations friends and abject fear along with respect in our nations enemies,
  • I want someone to lead us to a new era of tolerance and respect for each other as Americans,
  • I want someone who can move our full-time professional political class back to part-time citizen politicians,
  • I want a president who is selfless who will sacrifice the potential for “4-more-years” to do the correct thing for the country,
  • I want a president that can help re-engage our youth and re-invigorate our education system in teaching our next generations our real history–what it takes in terms of knowledge, commitment, dedication, hard work, respect and compassion to be successful and responsible national and family leaders,
  • I want a leader that will resolve the ongoing conflict between the powers at the federal level with those at the state level,
  • I want a leader that will inspire all of us to be bigger than ourselves, become more self reliant, and do better at helping each other as Americans.
  • I want a Washington, or a Lincoln, or an Adams, or a Jefferson, or a Jackson, or either Roosevelt
  • I want a pragmatic idealist
  • I want a person who believes that faith plays a role–which faith is not important
  • I want someone who can sees how the Federal government can provide the checks and balances to make sure we all do our best for the country and each other but not one who sees the Federal government provide for us all
  • I want a leader that knows the value of our history–all of it–not slanted to one political side or the other
  • I want a leader that will make the hard choices–the ones none of us want to make and does not soft peddle the solutions to preserve the livelihoods in DC

I could go on and on but this is long enough already .  I would hope that most of you do not find much, if anything, you disagree with–despite your political affiliation.  I also, hope you will notice what you do not see on this list: things like; marriage status, religious affiliation, sexual orientation, size, weight, personal predilections or anything else.  In the long run I am not even sure that in the end I want to ‘like’ the candidate. By this I mean they do not have to be someone I want to go have a beer with.  I really just want the best person, with the best ideas, singularly dedicated to fix the problems and make us a better country.

In the long run this alone would be a great start!  Wouldn’t it?

The Middle Class Myth: Let’s try this again

The Old -- New Middle-class

I have written a couple articles trying to explain the problem with the economy for the middle-class in America. If you listen to the current rhetoric, now apparently from both sides of the isle, you would come to believe that it is the fault of either the political right working to give the rich an unfair proportion of all the money, or it is the fault of the political left in America for running up the debt and increasing significantly the expenses of government.

Of course there are many other flavors of the arguments but, they all center on how someone else is causing the plight of the middle-class and only our side is looking out for you.  Oh yea, one more point…. they do it on purpose because they don’t like you and they want to hurt you, or they just don’t care about you! Have you heard this drivel recently?  Do you really believe that any leader in America is only looking out for one class of people?  If you believe this, I have to say. I feel sorry for both you, and America, as we have lost all reason, understanding, and any opportunity for compromise through tolerance.

I want to tell you that unequivocally I believe, all the crap you are hearing is simply not true!

Why is the Middle Class Suffering Then?

This is the key question isn’t it?  And, since we agree this is the “key” question being raised by both parties now, ad naseum, have you happened to notice the issue is not focused as much on the poor?  Hum???  Wonder why this is?

Being Poor in America

Well the poor in America have many programs already doing a great job of redistributing income back to them to help them survive. Before, you guys start to say that it is really bad to be poor — I agree it is not a good thing to be poor.  But if you are going to be poor, it is better to be poor in America at this time, than any other place, or time, in history.

The U.S. “givernment” and all our states have many, many, programs to help people classified as poor.  The definition of poor used to be people earning below the federal poverty level (FPL) which today is roughly less than $25,000 per year.  But, this is mostly a myth.  Many programs, if not all programs — I can’t verify that any programs work only at the federal poverty level — start their eligibility levels as 200 to 300 percent of FPL.  While you may not be legally designated as poor from the FPL definition, practically you are treated as poor if you earn $50,000 or in some cases $75,000 per year.  And due to the fact that these programs are not mandated to coordinate their care and benefits across any and all sources, somewhere between 20 and 40 percent of the money for services is paid to program participants more than once for the same need.  Meaning, in plain English, they double dip.  In some cases, this is nothing more than gaming the system — purposeful fraud.  In other cases, it is because they just don’t realize it — hard to believe, but true non-the-less.

Drug Rebates

A hidden redistribution program!

Few people know, and even fewer people understand, that the government, both state and federal, requires drug manufacturers to pay back to the government rebates on all drugs purchased through most state and federal programs. This is just one example of subversive hidden taxes that we get hit with every day. How can a rebate cost us money you ask? Well in this case it is because the price you are paying is where the rebate dollars come from in the first place. So what happens with drug pricing is this: There are various prices for any given drug, unlike most other industries which have Manufacturer Suggested Retail Prices (MSRPs), all the various drug prices are based on an arbitrary number like Average Wholesale Price (AWP) or Wholesale Acquisition Cost(WAC).
On top of this, there are rebates – rebates for distributors, rebates for pharmacies, rebates for others, and most importantly rebates to the state or federal government. It is the governmental mandated rebates that are the main problem. In other industries rebates paid in the retail path to the customer are checked by the MSRP and the customer’s willingness to buy. Government rebates simply inflate the price paid. And where does this money go? It goes back to the government, sometimes to the programs, and is reallocated to support the government costs or the programs that generate the fee in the first place. So you are paying more in prices that flow back to the government so it can distribute the money back to the people it wants to give it to. It is simply one of the many hidden taxes, perhaps more hidden than most. It also helps the government have flexibility in the disclosure of the real cost of the programs they offer.
These rebates are inflationary, they obscure transparency, and they are not, by any means, the only mechanisms that redirect your hard earned money to others that you just do not know about.

I have documented this in earlier posts, but as a reminder; we are now at a point that almost 50 percent of the population is getting almost one-half of their income from some form of federal subsidy — directly, or indirectly.  This is one half of the important facts we all need to consider as we try to move the country forward.

Being Rich in America

How about the other half? While it makes for great copy to vilify the rich as somehow taking the food out of the mouths of the poor in America it is just not true.  Sure, there have been people who have gained illegally and profited on the suffering of others.  But these despicable people do not represent the norm for rich in America.  The title Rich itself is a very frangible determinant.  If you are truly poor, meaning you earn at the FPL, then someone earning $75,000 per year could seem rich. But, this person you see as rich is often now just as eligible as you are for federal subsidies.  So are they rich?

Many try to classify the rich as millionaires and billionaires.  But this is a very problematic determination in itself.  There is a 1,000 fold difference between a millionaire and a billionaire. Further many millionaires do not earn a million dollars a year in income.  This represents what they have in equity, home, savings, investments etc.  Another problem with the designation is that, Millionaires and Billionaires make up a very small percentage of the population and our economy.  Less than 5% of the population.  They earn about 18% of the total income in the U.S.  Sure, this is a large number but, it is not as disproportionally large as many would have thought.  And, the “rich” pay over 40 percent of the taxes to the government.  Much of which goes to support the programs for the other 50 percent receiving some subsidy.

Romney’s 15% Tax Rate Shows they don’t pay their fair share!

As a very quick point, as I have been working on this article, the Mitt Romney 15% tax fiasco has come to the surface.  Once again the argument is false and stupid from both sides.  The 15 percent rate is not all the tax paid on these earnings.  For the most part, the 15 percent represents the tax paid on the earnings from the money he has invested. Where did he get the money?  Well some he likely earned as ordinary income and paid taxes on it at the time of earning of between 22 and 38 percent.  Some, he may have earned before as investment income and could have paid between the 15 percent and 22 percent based on when he earned it.  Lets say he inherited some of it.  Well he would have paid a significantly larger tax on that at the time he received it based on the estate tax (so called death tax) in effect at the time.

Because he chose to invest, or re-invest, these monies, he has paid taxes multiple times on the money.  If you want to be jealous of the fact that Mitt Romney has a lot of money, OK, I support your right to be jealous.  But, if that is your objection then the rest of your arguments are worthless.  This is America, what makes it great is anyone has the ability to get rich.  Yep, some will say this ability is not distributed equally.  That’s true! But, if you make it truly equal, then no one will have the opportunity to get rich!  As I  pointed out in the earlier section; rich vs poor is a relative state.  You see, if all are truly equal, then everyone has exactly the same — no rich and no poor.  Some argue this would be a good thing because they feel that everyone would have enough.  History challenges this assertion and it defies human nature. It is the opportunity for disparity, like it or not, that makes people work harder and innovation really happen.

So back to the question; why are the middle-class suffering disproportionately?

Two main points.  First, the middle-class is shrinking in number.  If you need to be poor to get subsidies from the government then part of the historic middle-class is being subsumed by the subsidies for the poor.  You could say that they are becoming poor because they are earning less and can afford less and that they need the programs to survive.  That is one way to look at it but, it is the symptom not the cause. In fact, the middle-class, like most of the rest of America, have seen their incomes grow drastically in dollars over the past 40 years. Second, The middle-class do not have the excess equity, cash or assets, to hedge their loss of buying power.

The middle-class are suffering a huge disproportionate loss of buying power in America because they are disproportionately shouldering the burden of the loss of value of the dollar —  you can call it inflation or deflation, the point is the same.  If you live in the middle-class, you are not eligible for subsidies and you do not have the excess assets, like the rich, to hedge your buying power against the loss of value in the dollar by investment, savings interest, and purchase of long term tangible assets.  As a result over the past 40 years, while you have been getting raises, like everyone else, and seeming to live a bit better like many, for you it has been a bigger falsehood than for most others.

In 1974, there was a total of $500 billion of currency (money) in circulation when President Nixon took us off the gold standard.  Today, by various estimates, there is over $16 trillion.  The real value of the combined worth of the U.S. has simply not increased 32 times in 40 years.  It is even harder to believe there was really any increase when you understand that during the same period we have accumulated a combined trade deficit — purchased more from other countries than we produced and sold — of over $12 trillion.

So, this means that all the things we own, all the money we made, all the stuff we buy, the wages, the prices, the stock market, etc,  have been inflated to levels that simply are not real.  If you are poor, the government has compensated for this by giving you more subsidies in one form or another.  If you were rich, you have been able to keep some form of pace with this devaluation problem because you could invest in housing, or businesses or the stock market.  And, if you were rich, the loss of buying power may have affected your discretionary purchases but  often not your day to day ability to live and pay your bills.

The middle-class, as I laid out before, do not have the assets to offset the increases in the amount of currency without an increase in real value of what they own, and they did not get subsidies either.  So the issues of taxes comes to the front now.  The rich have been paying much more in real taxes — revenue to the government —  during this whole period.

The middle-class have heard over and over how they were getting a tax cut!  How come you say the middle-class are bearing the burden? Well, the truth is, that there are Taxes and there are taxes….  Taxes are those things assessed by the government that we pay to support government programs directly through taxation.  “taxes” are those things we pay that indirectly are increasing the price of goods and services, increasing the prices in the economy to artificially inflate the amount or money we can claim is in circulation.  So you get paid more in wages, your company charges more for its goods and services and the economy appears to rise in value.  You get more benefits, you get more vacation days, etc, and each of these things translates in some way to an increase in prices or spending and therefore the economy supposedly was growing.  All that is necessary is for the government to be able to print more of that green-stuff to allow you to count it.

But, there is a fly in the ointment.  It is a zero sum game.  We are not making money as a country we are spending money as a country. So, as you thought that you had more money to buy new cars, new homes, take vacations, get more stuff, and the government has encouraged to do this– and on top of it borrow as much as you can to buy as much as you can — these new dollars were actually reducing in value.  The good news is that we are not alone.  Most of Europe has been doing the same thing in one form or another.  If you were a net exporter, like China, it was not a problem. If you convert natural resources to high margin goods like much of the Arabian peninsula — no problem either.   If not? Oh Well– bad for you!

As long as we were buying, most recently houses, and having the prices continue to go up, we could print more money, and no one was the wiser.  But, due to increasingly dumb decisions we finally made the mistake of over doing it and it all fell apart. The values we think we have are far different from the real values that we have.  Looking at median home prices from 1974 to today, with and without the gold standard, is is clear that we are still 20 to 30 percent too high in real values of homes.  If you look at the economy it is much worse.  We have $16 trillion in currency circulating in what is really a $5 trillion, maybe $6 trillion, economy.

Conclusion

The middle-class is, and has been getting hosed for a long time.  Those in the middle-class have suffered from not enough to be rich and protected, and too much to be poor and subsidized.  Further, as prices have risen, they have paid more with less real value and as such have indirectly, and disproportionately, paid for the programs for the poor.

And who is to blame for this?  All of us!  We have been asleep at the switch for too long.  We have allowed all of our administrations, and elected officials to do dumb things — things that defied our own common sense.  We allowed it because we all felt we were gaining. In the end, and once again, we will learn there is no free lunch!

Republicans, Democrats, Socialists, and Independents have all been elected to our government in the past 40 years and all have continued to perpetuate these myths and underlying problems.  Were they doing this consciously?  No more than any of the rest of us! It is not a Tax Problem alone, it is not a spending problem alone, it is a systemic problem.

We need to stop diversion to prurient, ad hominum, vilification of others ideas, and focus on a pragmatic solution founded in tolerance more than compromise.  In the end, we must all face the reality that, it will only be a broad based mutual solution that will solve the problems underlying the economic disaster we are now in.

  • We need to become competitive in the world from a total costs, benefits, and wages perspective
  • We need to get back to manufacturing in the U.S. products for the U.S. and others to consume
  • We need to stop subsidizing the existence of such a large portion of our population based solely on the desire to keep them thinking they are doing so much better and that  the products we make are competitive and  affordable.  (subsidizing production to make it affordable so we can pay inflated prices to support inflated costs and wages so we all feel good is not a good thing.)
  • We need to eliminate government redirection of monies to support hidden redistribution schemes.  (Example: mandated Drug rebate programs see sidebar)
  • We need to solve the problem with home equity, home mortgages and home prices in one holistic and complete fashion balancing the problem equally for all parts of society and the economy
  • We need to get back to primary production from our own natural resources.
  • We need to reduce what we purchase from other countries and buy more here —  but this cannot be subsidized to make it affordable or our economy remains false.

I believe it is fixable!  It is going to take a fundamental shift in what we all expect and, to some extent, how we view ourselves as Americans.  We needed to start this five years ago.  It may not be too late now, but it very likely will be in another four or five years.

Since the power of our government is derived from the people in this constitutional republic we call America: It is up to us!

Ron Paul:The Republican’s Pall

Recent Pitts Article

Perhaps it is just me, and apologies to those Ron Paul supporters out there, but I do not understand the fascination with him as a candidate.  Yes, there are things he says that I agree with, but there are also many things he says that I find, quite frankly, astounding. Yes, he has a number of concrete plans, but his unbending ideology takes his positions to a ludicrous (I don’t mean the rapper–Ludicris) level.  Yes, he is a non-Romney candidate but given his positions in some areas you could say the same about Michael Moore. Because in some cases, I am not sure I can find much difference in the level of both extremes. I am not saying he and Michael Moore share the same views, just that often I see Mr. Paul taking his ideas to the same level of incredulity.

“A foolish consistency is the hobgoblin of little minds.” – Ralph Waldo Emerson

In a article by Leonard Pitts Jr., Ron Paul’s consistency doesn’t make him right, He sums up what it is about Ron Paul that has confounded me for so long.  I am fiscally conservative and often socially moderate and given the correct circumstances, sometimes socially liberal.  So I should be attracted by a committed Libertarian, but in this case I am not. To confound the problem, I don’t understand how he could have rated so high in Iowa. While there is an old joke that Iowa stands for “Idiots Out Walking Around,” I know many people in Iowa and I have traveled there many times over the years and conducted business in Iowa as well. I find the people of Iowa to be highly intelligent, dedicated, perhaps slightly more conservative, and very hard working. In short, I see nothing that would explain to me why so many have gravitated to someone who is often so far in the extreme.

I find myself in agreement with Mr. Pitts.  Something that is not a common occurrence.  This in itself gives me pause!  But Mr. Pitts summed up my exact sentiments about Ron Paul when he said, “Ralph Waldo Emerson, meet Ronald Ernest Paul. He is the very soul of a foolish consistency. Meaning that he is willing, often to a fault, to follow his ideology to its logical and most extreme conclusions.”

I also do not find some of the extremes of Ron Paul to be that conservative.  I know a few other very conservative people who refer to Ron Paul as really one of the most “liberal” people in the presidential race, some proclaim he is to the left of President Obama in many areas.  I am not sure that I would draw the same conclusions. I do, however, think his brand of extremism is more than confusing; it is at least very risky–perhaps even dangerous. It is in any event at least dangerous for the Republican party.

One pundit last night suggested that perhaps Iowans were sending a message to the Republican leadership. Well if so, it is to my way of thinking a very problematic message.  This election, more so than any others in recent history, will be decided by independents, and moderates in both parties.  Non-Republicans, and some Republican moderates, tend to worry about the extreme views of the Republican party and the potential extreme conservative segments of its platform, just as non-Democrats and Democratic moderates then tend to worry about the extreme liberal segments of the Democratic platform.

Sending such a message and ignoring Paul’s foolish consistency in the areas of civil rights, Iran and their nuclear ambition, and the recognition that there are some areas where the federal government must play a role to promote the general welfare, if in fact that is what is being done, is not going to go far toward endearing independents and moderates to the benefits of a Republican executive branch and congress.  Not since the period of the 1880s to the early 1900s have we seen such a divided ideological ocean between the parties.  With it has come a broad distrust of the professional political class and significant suspicion as to motivation and potential corruption in their platforms and agendas.

In the end, Ron Paul’s finish in the race last night in a virtual dead heat with Romney and Santorum worry’s me.  If the Republican party members in the U.S. now are willing to accept such a level of foolish consistency in their candidate in order to adhere to other desired ideals, we will run the risk of ignominious defeat in the presidential election.  Independents and moderates will likely see Republicans as a party driven so far by  ideology that these key voters will not be able to accept their perceived risk of this foolish consistency.

Perhaps the pundits are correct and Iowa is a Paul anomaly, and as we move through the remaining caucuses he will once again fade into history as did James G. Blaine in the election of 1884 or Alton B. Parker in 1904.  If not, I fear, in about one year, we will be recalling the Paul pall of 2012.

David Brook’s Take on the Progressive Era is Right On

Teddy Roosevelt(R) the Progressive Candidate

David Brooks wrote a great article comparing today’s America with that of the progressive era called, “Midlife Crisis Economics“.  In it, Mr. Brooks provides a very cogent analysis of the fallacy in comparing initiatives from the progressive era with those of today.  He notes that the current administration, long enamored with comparisons to the New Deal era, has now realized that this period comparison has led to many false paths and much political baggage and is now promulgating  comparison to the Progressive Era.  Mr. Brooks very capably points out why these analogies are also in error.  I will not rewrite Mr. Brooks article as I encourage you to click the title above and read his more than capable work. However, I would like to discuss this seemingly current trend in a much broader context. While the current administration may have taken the historical analogy as justification for current actions to a new and perhaps much more dangerous level; this is more likely the culmination of a long term trend in seeking justification for a continually failing set of policies.  While it is very easy to bash democrats for this at this point in time because they are the party of the current occupant of the White House, this is in no way just a one party problem.  Both sides of our professional political class have tried to capture the glory days of their bygone eras as rhetoric to stir the masses to their cause in this current period. The main problem, as Mr. Brooks points out so well in his article, is the times have changed and along with the times; the character of our country, underlying economy, and issues that we are solving for have also changed.  Further, the entirety of our government has morphed into that of a professional political class.

I don’t know about you but I am sick to death of the phrase, “the greatest financial crisis since the great depression!”

At the height of the progressive era, a republican, Teddy Roosevelt, was the spur in the rump of the American Horse.  The ideals of progressive-ism were targeting specific sets of problems and solutions using a specific and timely set of tools and actions. If you look forward to the period of “the Great Depression” you find the same thing. The methods that were chosen to try to solve the problems under F. D. Roosevelt’s reign were also specific and timely.  One of the biggest laughs I get out of discussions about the current economic or health care crisis is when modernists begin to espouse what F.D.R.’s position would be.  Since I have spent quite a bit of time on the issues of healthcare I will point to one example. Over the past couple of years, as the debate for “universal healthcare” centered on a national governmental healthcare system, so called “single-payer” system, one pundit after another, and in some cases supposedly well respected congressmen and women, have said this is what F.D.R wanted.  Well that is just so much–what was it the ‘Stormin’ Norman Schwarzkopf called it?  Oh Yeah, Bovine Scatology!  Franklin D. Roosevelt was fully and distinctly anti socialist and anti communist.  While he proposed many programs that historically we now see in some kind of socialist light, in almost every case what he was advocating for and what we have now are not comparable.  Some of the recognizable  stalwarts, like Social Security, he advocated for but as  temporary solutions. In the area of healthcare, the distinctions are even more stark.  Roosevelt was not solving for the problems we have today.  In fact, it is likely that from his historical perspective he would marvel at how well our current system has improved over the problems he faced in the provision of healthcare to the country.  During this period, the big problems were access to care, and the quality of the care being provided.  While cities could economically support hospitals and therefore provided good places for doctors to congregate, conduct research and solve the needs of the populace, rural areas could not. The profession of physician and doctor had merged into one, hospitals had become vitally necessary for most of them to practice comprehensive quality care and they were expensive to build and maintain. During Teddy Roosevelt’s era physicians could finally charge for services rendered at hospitals. Rural hospitals were few and far between and the few that did exist were often staffed with the substandard physicians who could not get hired in the cities or in other more egregious cases–outright charlatans.    Compounding the problem was that cash and money payment in rural communities was still not a wide spread practice. Both as a result of custom, and the depression, cash was not a favored form of transaction in rural communities. Many people simply did not have cash or ready access to it. Many still bartered for goods and services.  It was nearly impossible to construct a hospital, fund its expenses, and attract good physicians to an economy where cash played an often secondary role. F.D.R. was solving for access to quality healthcare in rural communities. He failed to get his proposed solutions through congress in his second New Deal legislation before his death.  It was Harry Trueman who finally got the Hill Burton Act passed that stimulated the construction of rural hospitals and helped increase the quality and availability of care in these under-served areas.  It is very easy to say, as Michael Jackson did in his song, “They Don’t Really Care About Us” ‘that if Roosevelt was livin’ he wouldn’t let this be, No No No….’ But it is probably just not true.  In the song, Jackson is referring to racism, but even in this area, historians point out that Roosevelt was not quite the staunch humanist we now perceive him to be; and in fact contemporaneously was repeatedly accused of being racist. In the end, it is never a good idea to believe that historical figures would immediately support any of the solutions we propose today. Often, they would marvel at what we have achieved and find ridiculous some of the ideas our politicians now choose to rail about. From racism to healthcare, from the economy to poverty, historical figures would probably strongly suggest we appreciate a bit more of what we have.  They would be lost in a world where political correctness gets parsed to which words are used to reference a problem.  They would be horrified at the areas we are allocating so much of our money–spending huge amounts to support politically correct causes while allowing many other real problems to get under-funded or unfunded. None of these historical progressives believed in debt, nor in the deference to those who lack personal responsibility.  While our historical figures were long on helping the downtrodden and the helpless, they had no patience for the avaricious nor the clueless.

“Don’t pee on my leg and tell me its raining!”

We should look to history to review the things that were tried and whether or not they succeeded. But the blanket application of those historical fixes and the dishonest misrepresentation of the issues and the solutions from then to today are dangerous and duplicitous.  We need more than this kind of behavior from all of our politicians today.  Perhaps, we need to get rid of the professional political class we know have and go back to the very same type of citizen politician who they now wish us to say they emulate. We need leaders that can propose solutions!  We need leaders that have learned the lessons from history and can apply those lessons to the problems we face today and help us come to the hard realizations we need to make in order to pull ourselves back to a viable path.  We need those who can both tell us the truth and apply the learning not just rehash the historical solution because as both Mr. Brooks and Bob Dylan said,

“The times they are a changin”

What we all need to focus our attention on is eliminating (please pardon the crude analogy–but I think it applies) any political party or professional politician, who simply “pees on our leg and tell us its raining!”

Time for something new: How about WE?

This article could also be titled…. “If the Occupy movement wants an argument that will resonate, and work — this is an idea!”

America has had a kind heart

America historically has had a kind heart.  In the past, when friends and neighbors were in need we have risen as one to help each other.  We are a nation that was founded on the belief that with tolerance for opposing ideas, and being united in a common cause, we could rise from the oppression of our rulers in a foreign land and take control of our own destiny.Thomas Paine was enlisted to help unite the people in this view and he coined the phrase, “an island cannot rule a nation!”. While at the time of the American Revolution there was not 100% unity in the desire for separation—or even universal agreement that separation from England was a good and economically viable idea. In the end, our founding fathers strung together enough of an argument that if we remained true to the ideals established in our Declaration of Independence and if we crafted the proper covenants of governance as later codified in our Constitution of the United States and if we practiced tolerance for each others separate and distinct; needs, wants, desires, and religious beliefs we could not only survive but perhaps thrive; and in so doing become a model for a new method of common governance—a constitutional republic—a very separate and distinct system from a historical democracy.

As a nation, in effect we made a promise to ourselves to believe in our own future, to be vigilant in the preparation of our government for the succeeding generations, and to develop within the constraints of our new found republic rules and regulations to promote various individual freedoms — earned based on our own personal and collective responsibilities. In the era of the citizen politician, this system has worked remarkably well. However, as we are by our nature, human, and as such subject to our own failings, we have made mistakes.  These mistakes, often in the form of ill-conceived and poorly framed decisions to solve the pressing problems of the various historic periods, have often changed our understandings, altered our perspective or removed the need to maintain our own personal responsibility for our life and our own decisions.

In the 1930’s we began a series of what at the time appeared innocuous decisions that fundamentally altered who we are and how we think of ourselves and Americans. It is my belief, that in each case the decisions were made for valid reasons. But in the nature of the deliberations at the time, we were faced with the age old dilemma: the conflict between practical pragmatism and ideological morality.  As we began once again to find some prosperity, we have more and more consistently chosen the moral side of the equation. And who can really argue with such choices?

The rise of the full time professional political class

In the days of the citizen politician, when congressional and executive service to the country was part time, and in the end those that served gained little and gave much, decisions tended to become more tempered with pragmatism because the laws passed more directly and immediately affected our legislators just as they did the rest of the citizenry.  As we moved through the 1930’s and 1940’s short term decisions to extend the period of congressional duty to more of a full time period set us on a path to the development of a full time legislative role and later to the establishment of the professional politician.  As this role changed, not only did we end up with full time politicians, we ended up with what now is a legislature full of professional politicians—a Full Time Professional Political Class.  A new level of American who’s class gives them exemption from many laws but more importantly that by gaining election into this elite class become, by and large, exempt from the pressures of life that affect the rest of the “normal” people. The prize of elected office is now exemption.

As I have discussed in earlier articles, the currency of this class is votes and the goods exchanged are now our own hard won assets, taken by the professional political class to equalize the injustices, both real and perceived of those not of the professional political class.  Whether the flow is from the wealthy few to the “huddled masses” or from the masses back to the wealth few to stimulate programs to fund the huddled masses, in this zero sum game we are continuing to lose economically.

For the last seventy or eighty years these decisions have appeared to work, with little or few consequences.  I have discussed a number of these points in prior articles and will not rehash these decisions here.  I expect my readers are capable of doing their own research and forming their own opinions.  What I will remind you of, is that as the underlying dynamic of our political system changed and this new class rose, often those short term legislative solution, affected to solve the immediate problems of any given period, became permanent sales pitches to sell these often short term programs as now permanent gains for the huddled masses in exchange for votes.

The Political Class is broken

Unfortunately though, today the professional political class, like the people they are supposed to serve, are stuck! Our political system is stalled! As a result, WE are stymied! That’s right, it seems we as a nation are at an impasse, spinning in circles and getting nowhere.  Yes, it seems we are trying to pry open a door that just won’t open.

The evidence of this, of course, shows in the inability of Congress to come to resolution in order to solve things like universal health care crisis, the financial crisis, the economic crisis, the immigration crisis, the jobs crisis, the energy crisis, the stock market crisis—the list can go on and on…. Any solution is long overdue.

Though it can often appear that the powers-that-be in Washington are making an attempt to provide such solutions, the historical record of real fixes and real reform is just not there. That’s right, if WE read and listen to the daily news, WE realize that what Washington has on the table ultimately will not, and cannot, work.

Washington has had many opportunities for the past 80 years to design and pass legislation that would fix our problem, they just can’t get the job done.  They can’t because we are asking them to fix something that is simply not in their purview to fix.  WE seem to keep asking them to fix the problems created by our own lack of personal responsibility and accountability.  We want the government to make it so that no matter what we do they must take care of us—make it all better.

I asked you a couple of paragraphs ago, “Who can really argue with such choices?”.  From a moralistic standpoint who really wants to argue against providing care for all who need it?  Or, who wants to argue in support of not helping people about to become homeless?  No one, in either the huddled masses (both the 99% and the 1%) class or the professional political class (all the rest) wants to make these arguments!  Despite the truth that no one is out to harm a fellow human being, isn’t it nice that we constantly beat this drum about how so-and-so wants to harm the other guy? In our hearts we know this is true but we allow these surrogates of others to beat this drum until some of us start to believe it. Who was it that said, “If you tell a lie big enough and keep repeating it, people will eventually come to believe it!”? Oh yea, it was attributed to Joseph Goebbels, although it is more likely a misquote of Adolf Hitler’s big lie passage in Mein Kampf.  One of the big issues today is that our Professional Political Class will not, in fact they can not, make such an argument.  The checks and balances that govern their existence prohibit them from making this argument. Their livelihoods are predicated on them NOT making such arguments. We have built a political system where they get compensated, quite handsomely, for promising to give us stuff for nothing-in effect lying to us.

Two minds but one heart

While I believe we all truly have one caring heart. I would submit, with no real evidence, that we as a species are of two sociological, perhaps genetic, minds on this issue.  About one half of the species sides on the moral and the other half sides on the pragmatic.  One side sees the argument as moral and cannot fathom any decision that would go along with sustaining the emotional pain of watching a neighbor fail.  The other side sees the problem as a survival issue, economic or otherwise.

Today, no one disputes there are millions in need in America, and more so in the world as a whole.  Seeing our governments inability to solve America’s problems is downright frustrating when you consider we are a nation that can mobilize in an instant to help people all over the world—like in Haiti or Sri Lanka—or how about the help we’ve given to various villages and communities in Bosnia, Bangladesh—or the impoverished countries in Africa. If we can do that then why can’t we take care of our own? Why can’t we help those who need, and most certainly deserve, to be treated with consideration and priority when it comes to physical and mental health and well being? While we should try to help the world, I for one would like to concentrate first on our own neighbors; as their suffering has a much more direct bearing on our own needs, wants and responsibilities.  I also subscribe to the belief that if I give someone in need $1.00 they get $1.00.  If I give it to the government the needy net about $0.35.  These are not my numbers but the governments in various forms.

We need an Answer

We need an answer. But to get one, we need momentum. And, to create momentum, I believe that if each one of us did a part—if we mobilize, all of us, pushed in our own individual way—we might very well force the door to solutions open, even if we do so only a little at a time.

I guess you could say that my philosophy toward solving the healthcare issue, and most of the other issues we face as a nation, can best be summed up in the words of that ever-popular Michael Jackson hit, Man in the Mirror, in which he and his co-writers Siedah Garrett and Glen Ballard, stated, “…I’m starting with the man in the mirror, I’m asking him to change his ways/no message could have been any clearer/ if you want to make the world a better place/take a look at yourself/and then make a change…”  In other words, it starts with each of us taking responsibility for both ourselves and our neighbors and a closer look at what every one of us can do to effect change.

While I was at Ramsell, I started a non-profit called the WE Movement.  In creating the WE Movement I believed that we could all do something, each of us to help Washington get the job done. While I was working on healthcare reform in Washington I learned a few things  about how our professional political class try to make sausage.  Having grown up in St. Mary’s County, Maryland, I know a thing or two about making sausage and Washington DC knows nothing about making sausage.  I would submit to you that we would be much better of in the long run if we went back to the days of part time citizen politicians, many of whom could be real sausage makers and we would find that our government would be much improved. If not improved, at least our daily diet of bad news would taste a bit better!

Let’s talk about health care for a minute.

We have learned that we in the United States are a generous people—all of us, whether we are Republican, Democrat, Independent—conservative or progressive. We also have learned that the majority of us wish that all people could and should have access to the health care they need.

Sadly, we have also learned that the scope of healthcare we want everyone to have is simply unattainable—the economic cost for it well beyond what we can provide—or more importantly—what we are willing to allocate to pay for it.  It is not an issue of taking money here to pay for it there.  It is an economic issues in that the more we pay for care to workers the less competitive we become in the world stage.

I have come to be of the mind that there are two very important universal truths that have emerged from this recent health care bill proposal:

  1. We can’t afford what we want (and need) and,
  2. the prevailing atmosphere of “Us” vs. “Them” has been a recurring theme and extremely corrosive to the ideals we have set.

For example, the goal of Universal Healthcare was to include:

  • Affordable coverage for 100% of all Americans
  • A mandated minimum standard of care
  • Access to all, regardless of illness, state of disease or pre-existing condition
  • Reduction of the overall cost of care to all Americans
  • The elimination of “care disparity”
  • And assurance of coverage for the underserved

All good ideas; lofty goals, yes, but A) we can’t afford this “vision” package because the implementation and subsidy costs alone total $1.55 trillion, and only 155 million people are getting paychecks out of the 338 million Americans who need them, and B) under the suggested guidelines, the cost of care for individuals will rise between $1000 a year to $3000 a year.

Next, it seems we’re faced with an “Us” versus “them” mentality: For example, coverage for 96% of Americans is requested (although 94% were already covered before the proposed legislation). The actual goal was to provide coverage for the uninsured or under-insured. And, the 2% additionally insured breaks out like this:

  • O.8 percent are between 18 and 29 years old
  • 0.4 percent are elderly—those that previously were not enrolled in Medicare
  • The dilemma is where this leaves the uninsured and under-insured

The problem is that the minimum mandates for care were watered down; changes were made geared to garner support from AMA, AARP, Unions, and others such as the Medicare Advantage program which was effectively curtailed to get AARP support. Also, the cost to the nation will rise significantly; the curve does not bend down under full utilization, however. And, also the ideal to eliminate disparity has resulted in restrictions of options for “them” that can afford it, not an increase in options for the “us” that cannot.  In other words, it’s as though this bill has pitted two groups against one another rather than providing a plan that works for the good of the whole. The end result: we’re getting nowhere. As I said, we are stuck, stalled, stymied…the situation has created a sense of inertia precluding us from moving forward in any direction.

Here are some other statistics that need to be understood and made known:

  • Medicare and Medicaid account for 1.3 trillion in health care spending this year
  • Total health care spending in 2010 exceeded $2.8 trillion. Interestingly, some studies have shown that as much as 39% is lost to waste, defined as “duplication of services” and “unnecessary services.”  Other studies tell us that as much as 20% is lost to fraud and abuse.
  • Ultimately, estimates suggest that over $800-billion per year is lost due to waste, fraud, errors and inefficiencies.

So, you may be asking: What can we do about it?

I believe that a simple form of coordination of care and benefits across all available sources will save at least 10% of the total cost of healthcare, and by eliminating duplication of services we can provide increased capacity within the existing networks.  Yes, it is possible, and what a way to begin to open that door!  And it is not simply in healthcare where these benefits can be attained.  It will work in virtually any area where those that have a re providing benefits to those that need.

It is staggering as we try to comprehend that $800-billion dollars in waste exists in the healthcare system across the United States today. What do you think is happening in other segments of government run programs?

Can you imagine what we could do with that amount of money if it were available for health care purposes—if we put this money to better use? And it’s not just the money that we can put to better use; it is the resources as well.  If we eliminate duplicate visits and other services we will free up resources to treat the others who wait in lines.

This is just one way to begin to solve the problem—better appropriation of resources and the spending of funds that are currently available. I believe there are a number of other ways to begin to solve the health care plan dilemma and we must because, just like you, most of us are out of patience with those who wish to make the health care issue, and all the others, a political playground. I think we can all agree that we are fed up as we stand by and wait for a resolution to a problem that is really quite solvable.

WE need to eliminate the “them” versus “us” mentality. We need a platform for those who wish to help each other—to be able to quickly and easily find those in need.  We need a method to filter the truly helpless from the clueless; or worse from the charlatans who simply want to get everything for nothing. Washington can play a key role, an appropriate role, in helping to develop such a system.  A virtual place for people to post what they are willing to provide so they can be matched with those in need. This becomes a “them” and “us” –that culminates in a “WE” solution.

I believe there are many others just like us who are willing to participate, and help each other in the collective crises we face if we can be assured that the needy are appropriately vetted.  Lets face it our government has a horrible track record in this regard.  Their own data shows that Medicaid and Medicare provide only about 35 cents on every dollar to care and we know that there is between a 15 and 20% rate of fraud in the system. Regardless of the percentage due to inefficiency this is at least a 50% improvement just in duplication and reduction of systemic fraud which we know from history the government just can’t do. We need a public private partnership to provide the core system.  Fortunately there are many choices.  Social networking is not far from being able to provide an effective infrastructure. Companies like LinkedIn and Facebook, already have flexible platforms.  MySpace not only has the platform but could rebuild their suffering brand by providing such a valuable option.  Of course there is also Google +, offerings from Microsoft, and many others.  It need not be just one provider.  Why not something in each and every infrastructure?

Webster defines “them” as “a group of people other than the speaker or people addressed.”

Webster also defines “us” in a similar fashion: “another person or other people.”

Presently, the mood in Washington is one of pitting “us” against “them.”
But the word, and collective consciousness we must all adopt in order to find resolution to the health care crisis, is “WE.”

Webster defines “we” as “you and I and others;”

It is all inclusive and that’s exactly how we must all be thinking in order to solve this health care  problem—with a “WE” mind-set. And, we need to tell Washington that this is where we stand as a nation.

For lack of a better analogy: If the Occupy Movement wants to find a message perhaps they need to become more about the WE and less about the 99% vs. the 1%. The truth is that this is not where the problem lies. It was basic grass-roots campaigns that grew rapidly in the 60’s when thousands took to the streets to put pressure on those in Washington who could not agree on how and when to end the Vietnam “war.” But this outcry spanned the classes and with a small exception did not pit one economic segment against the other as a way to curry favor in the majority. Clearly it has been shown that voices who cry out in unison with a unified, consistent, effective message  combined with an obtainable goal shared in every city, township and state can be very effective.  The speakers need also to be in every industry, economic strata, and profession—every company and corporation—and they need to gather and be heard. They cannot be disruptive nor divisive.

Our constitutional republic was set up so that our leaders would make the proper and just decisions for the good of the country as a whole.  The framers know that if we were only a “democracy” that in the end the system would fail.  That the mass of people would in the end vote more for laws that provide to their own benefit regardless of the overall bad effect to the nation.  The point of the constitutional republic was to set up our representatives so that they would be able to make the best decisions with little consequence and the bad decision would provide no gain.  In the past 80 years we have gone a long way to destroying that subtlety.  Historically, the concepts of fairness and equality for all did not equate to unequal burden nor benefit for anyone.  Today the entire concept of fairness and equality is conditionalized first on who has what.

WE need to take these messages to Washington.  We need to make it clear to our elected leaders what we think the effective role truly is for government.  To do that, we need to agree ourselves.  Abraham Lincoln said, “a house divided against itself cannot stand”.   Does anyone today doubt that we are a divided nation?  Even within our political parties we are divided.  I submit that it is no longer our politics that divide us; it is a much more simple philosophic divide.  We seem to be a nation of thirds.  One third morally driven (termed liberal), one third pragmatically driven (termed conservative), and one third combining the best (or worst—depending on your point of view) of both. Lincoln would likely be horrified.

When addressing the most fundamental rights—those of life, liberty and the pursuit of happiness, the authors of The Declaration of Independence started that document with the words “WE the people….” They went on to write: “…to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed—That whenever any Form of Government becomes destructive to these ends, it is the Right of the People to alter or to abolish it…” I am not advocating its abolition.  I am advocating we recoup our original national character.

I think we need to invite all of us— the collective WE—those young and old; well and ill; others within the healthcare and other business communities—to speak out—and to help the government find a way to solve these problems.

No one should be asking for money to do this. Existing infrastructures should be encouraged to build the support tools in their existing systems. Others should be determining what they can provide to tie into these support tools.  The government should be encouraging us all to do this, to adopt this philosophy and to establish some standards and guidelines to facilitate the private sector to participate right along with our part time citizen politicians in constructing a viable solution that works. To date, we have people saying, “We are fed up.” We are in need of a healthcare, financial help, economic recovery, jobs etc. initiative that works for the good of the ‘governed’. And, “We are tired of the bickering in Washington.”

Occupy, or any other organizations, should all hope to collect a groundswell of support—one that makes a powerful collective statement and an impact on Washington, one that will cause those in charge to listen to alternatives as to how to approach and conquer these dilemmas and also as a means to utilize such virtual matching and help systems free of charge to serve others who are less fortunate.

In the words of Stevie Wonder, those who decided to unite as WE should be determined to “… keep on tryin’/till WE reach the highest ground.”

What do you think?” Do you know anyone who has something to offer? Do you know someone in need of something?  Wouldn’t it be great if we could have a place to go match one with the other? Some place were the helpless can be identified, and the clueless and the fraudulent can be identified and filtered out.   I am not proposing the Government take the role of the determinant of who and who is not eligible.  I am proposing the government take the role of encouraging, promoting and defining the standards, that then allow private industry to combine their systems to help and put such determinations in the hands of the people offering the help.  I don’t mean we should get rid of our safety nets; but we should change the cost structures to a more efficient system and get the government at least partially out of picking winners and losers.  The  collective WE can identify the helpless, and work in virtual teams-virtual villages, to help each and everyone in need.  Virtually coordinating our efforts around the one person in need–placing them in the center of the world that is teaming up to help them.  This is the solution.  This virtual teaming approach will reduce, and perhaps in many cases, eliminate the waste due to duplication of efforts and could go a long way to identifying and reducing fraud and abuse.

In the end my message is–this is all up to WE.  We can continue to delude ourselves that the government can provide this effectively and efficiently but 80 years of history says otherwise.  So is it us–as in the US government as our collective surrogate,  or WE–as in all of us as individuals, that is best suited to do this?

That decision is yours regardless, the only difference is whether or not we all accept the individual responsibility– the duty–to do it or we push it off to the collective others.

FIX THE ECONOMY NOW, but don’t touch mine: Too late its already gone!

Shrinking Dollar

A Sorry State

We, America, are in a sorry state. This appears, on the surface, to be something with which most people agree. But the surface can be quite deceiving. Pierce the flesh of America’s electoral body and you start to see massive disagreement as to what is needed. Most importantly, and currently very concerning, is that everyone feels the solution involves steps to be taken by the other guys – you know, those who are not in OUR group! You know – The O T H E R guys; the non-white, non-black, non-Hispanic, non-immigrant, non-migrant, non-middle class, non-union, non-civil servant, non-farmer, non-medical professional, non-patient, non-majority, non-minority, non-lawyer, non-judiciary, non-legislative, non-administrative, non-professional, non-politician, non-unemployed, non-under-employed, non-employed, non-disabled, non-enabled, non-educated, non-uneducated, non-tolerant, non-intolerant, non-poor, non-rich, non-government, non-private sector… you know the Other Guys! – The ones whose fault all this is!!!

You know – everyone other than us! All those (whispered) other people, who have (caused the problem) (profited at our expense) (stolen our money) (spent too much) (worked too little) (think they are smarter than us) (are uneducated and lazy) (expect too much) (do too little) Circle the correct answer(s).

Also disturbing is that we are allowing our professional political class to drive, not only our debate, but out thinking as well. All you need to do is read the news and you will be fed the continuous supply of sound bite, talking points so you yourself can help frame what needs to be done to make the OTHER guys do their fair share. And of course, these talking points – these would be mantras for us to recite each day ad infinitum until they become ingrained in our psyche and we think nothing else – are not just in conflict with each other, they are diabolically and diametrically opposed. They are crafted to foment the most discontent and the most innate conflict. This is what our political process has become. Led my our professional political class; stirring up a minority to a feverish pitch so the bulk of the country will become afraid, or simply exhausted and in the end capitulate with what ever patch, or band-aid, the politicians decide to apply.

Community activists know that the way you get big gains for minority positions is to frighten or exhaust the bulk of the population. You see activists understand that most people don’t really care about much beyond their own day to day lives and basic existence. They know that when the average person feels threatened, or if the story gets annoying and tiresome – in the end they will just want their leaders to make it go away. They just don’t want to hear it anymore! This process is not about the right solution – it is about any solution that delivers me peacefully back to my mythical happy life. And you know what? It has worked every single time! It is all predicated on the right rhetoric -the right mantras.

The Current Mantras

  • We need to cut pensions costs We need better retirement benefits
  • We need higher wages We need lower manufacturing costs
  • We need more high paying jobs We need more labor jobs
  • We need universal health care We need low cost health care We need more free health care
  • We need to help people keep their homes We need to have the market sort itself out
  • We need to lower health insurance cost We need better insurance benefits
  • We need to stimulate the housing market We need the banks to lend more
  • We need to raise housing prices We need more affordable housing
  • We need more money We need less federal debt
  • We need more social assistance programs We need to lower government debt
  • We need a higher minimum wage We need competitive prices
  • We need to eliminate illegal immigration We need more cheap labor
  • We need to get the top 1% to pay more We need the top 1% to spend more
  • We need to lower government spending We need more government spending
  • We need more charitable giving we need to raise taxes and eliminate charitable deductions
  • The poor are getting poorer The rich are getting richer
  • The middle class is suffering We all need to sacrifice

Debunking the Myths

Most of the mantras in the list imply that fixing or making a change in one of these areas will repair what is wrong and remand us once again to the peaceful day-to-day happiness (even if it is just an illusion) that we all desire. While, depending on your personal political profile of course, all of these mantras appear reasonable, there is one underlying problem with each and every one of them. There is a set of fundamental myths that needs to be debunked. In debunking these myths, we give rise to the lies that are inherent in these supposed solutions.

To understand these fundamental myths we need to take a look at some assumptions.

Assumption 1

The poor are getting poorer! Who are the poor? We often use the term under-served, interchangeably with the term poor. Historically, we really have not wanted to clearly define the poor for a whole host of reasons. Defining a problem, or a segment of a problem, is not politically attractive. Well defined problems either yield impossible solutions, or easy solutions, and make it difficult for redefinition on the fly without political consequence. For a family to be described as poor and eligible for social programs the must fall within the Federal Poverty Level (FPL) or some multiple of the FPL.

The FPL for a family of four for the year 2011 ranges from $22,350 in the 48 contiguous states, to $25,710 in Hawaii and $27,940 in Alaska. Seems simple enough doesn’t it? well like most things governmental, its really not. So if the poor are those who earn less than, lets say $25,000 to keep it simple, than all aid for the poor would be for this group of people. About 18.79% of the U.S. population earned less than the FPL in 2010. This equates to about 58,332,000 people. But the provision of social programs is not targeted just at the poor. They are in fact often predicate on 200%, 300% even 350% of FPL for eligibility for some state and federal program eligibility. So most programs eligibility starts at $50,000.00 in income to as much as $85,000 in some cases. This in turn equates to almost 79.8% of the population according to the latest census data.

Now in reality, not all of the population draw programs support at 350% of the FPL. Only a smaller amount of programs offer eligibility at that level. The number today falls at about 50% of the population of the U.S. is eligible for federal and state program subsidies and currently takes advantage of these programs. Either alarming, or relieving, depending on your point of view, this 50% is getting slightly more than 1/2 of their annual income from programs and/or subsidies provided by the federal government. 84.1 million people (27.1% of the population) earned under $50,000 per year (200% of FPL). Together they earned in aggregate $1,591,640,000 of the U.S. total personal income economy of $4.915 trillion in 2009 – about 32%. So 32% of the money earned went to the lower 27% of the population and about 1/2 of their earnings came from money paid directly or indirectly by the federal government that came from taxes paid by the rest of the tax payers.

The biggest assumption of all with this segment of the population is that they are suffering more than they have in the past. While it is true the poor in America earn significantly less than much of the rest of the population, they also have the largest amount of eligibility for programs to offset what they don’t or won’t earn. In realty, while they earn less in real income, they have at least as much if not more in discretionary spending income because few if any of their needs go unmet. They receive a wide availability of care options, both Medicare, Medicaid and state based, as well as other federal and state programs for housing, mental health, addiction, job counseling and training, as well as numerous faith based and institutional charity programs as well as philanthropic programs. This is not to say it is pleasant to be poor. Simply to point out that the “poor” have a large array of services that are making up for what they actually do or do not earn. It is better to be poor in America than in much of the rest of the world.

Assumption 2

The Poor are the Under-served, is the core of assumption number 2. Anyone who has spent time working or volunteering in the areas of public health will quickly tell you that the under-served are not the poor we classically think of. The poor in America, as we discussed in the last assumption, are neither under-served, nor are they un-served. The bulk of the under-served are people earning between $50,000 and $110,000 per year. They have jobs, pay some taxes, send their kids to school, pay their rent sometimes late, or have a home, likely upside down in equity, and perhaps bordering on, or in default. Historically, they are two person family earners, and one of them has recently lost their job, increasingly one of their adult children is still living at home and has earnings insufficient to support independence, are still on their parents insurance, and one of the family members has a chronic illness.

The under-served are “working poor.” They don’t make enough to pay for all that they need and want. They make, or have made short term decisions regarding purchases, vacations, and or investments, that have come back to haunt them. If they have a chronic illness, they are making weekly, sometimes daily decisions between the proper treatment, or medication, and food, education, housing or clothing for their family. Often, health related costs are playing second priority, as a result their illness is getting worse, or in the worst case scenario, the untreated disease, bacteriological or virus infection is not becoming more resistant to the medication due to improper treatment levels – a potential public health hazard.

The under-served in America are squarely in the middle class. There is typically only one small incidental difference between basic prosperity and tragedy. A loss of one income, a chronic illness, a catastrophic accident, an unplanned pregnancy in inopportune bit of extravagance. Even without one of these incidental differences, the middle class are finding they have less and less discretionary income. More and more, even with raises, company healthcare, bonuses and perks, they just have not been getting ahead. They are earning more but are also more and more at risk.

The 29.6 million (about 9.55% of the population) under-served (a majority of the middle class) earned a total of $2.282 trillion (46.4%) of the personal income in the U.S. They earn on average $76,650.00 per year.

Assumption 2 is one of the main tell-tails to one of the major fundamental problems that if we do not come to grips with, will be the undoing of our economy, society, and ourselves.

Assumption 3

The rich are getting richer on the back of the middle class and the poor. Said another way the 1% are taking, through inappropriate or ill-gotten means, what is rightfully the 99%’s. Clearly the rich have taken in much more cash in the past 40 years. But when you look at the percentages they have gained it is not really a significant difference, as a percentage, than in previous years. But first let’s take a look at the top 1% and find out how they stack up against the rest of the population. The top 1% (about 3.9 million people) earn on average 275,000 per year. The total combined earnings for the top 1% equals $850 billion per year or about 16.5% of the combined total. Conversely the 99% earned a total of $4.103 trillion or about 83.5% of the combined earnings.

Clearly there is disparity, but I was surprised to see that the disparity was not quite as large as I expected it to be given the rhetoric. As Dianna Dooley, the Secretary of the Department of Health and Human Services for the State of California, said in one of her first public meetings after assuming office in 2011, “We all need to understand that disparity will exist.” Ms. Dooley was making the point that we cannot legislate away disparity. Disparity does not exist simply because of ill treatment or lack of opportunity. Sometimes disparity exists because people have made choices to not do certain things, not work, not get an education, not apply for available services. What percentage of the U.S. population does this characteristic apply to? It is had to say statistically because the census data does not measure motivations. We can use some numbers from a Thompson Reuters report in 2009 on the national health cares spend and we will find that about 20% of the monies spent go to people that have made such choices. I can’t say whether or not this is a valid measure for the economy as a whole. If I had to hazard a guess based on my life’s observations, I would think this is a reasonable estimate.

It does not seem to hold true that the rich are statistically getting richer, nor are the poor getting poorer. Both segments are getting more and more currency each year. The problem is not the amount of money they are receiving it is in the real value of the money they have. This is another clue as to the major fundamental problem, we will discuss shortly.

Assumption 4

We have had up until recently a vibrant economy, America has been very prosperous, and if not for the actions of this political party or their policy (depending on your political affiliations it is always the other party and their policies), all would be just fine. Said another way, when so-and-so was the President (again, depending on your political affiliations it is always the other party and their policies) everything was just fine!

In my last article Republicans & Democrats: Division destroys WE, I outlined a series of events since 1935 that have had major impacts on the current state of our economy. It was not meant to be all inclusive. In fact, I have heard from a number of readers who have suggested numerous other events, legislation, decisions, policies and actions that they also feel should be included. I prepared this article to point out that it was not one parties policies that have brought us to the precipice. It has been both parties. In effect it has been us, our decisions, our demands for more of this and that, and it has been our willingness to accept a gradual migration from the citizen politician, envisioned by or founding fathers to a professional political class whose rule we embrace today.

Those of us who learned American history after 1937 have been indoctrinated with the belief of “American Exceptional-ism.” As President Franklin Roosevelt prepared America to enter the war he needed to break the back of the isolationist tendencies we have developed after WWI. Part of the method to do this was building pride, patriotism and the belief that America was innately exceptional. As a result the history that was taught after 1937 was quite different from the history we would have learned before. I have advocated in earlier articles using Google Books, and searching for history tomes written before 1900. There as I was writing, “The History and Evolution of Health Care in America” I found a very different recollection of America than the one I carried in my head.

America has had a long history of economic trials and tribulations. Almost immediately upon the signing of the armistice at the end of the American revolution, the United States went from waging physical war to suffering under an economic war waged by England, France, Germany and other European nations and banking interests. By 1800 the American dollar had dropped to worth about 48 cents. It was the War of 1812 and our decisions to temporarily drop the international gold standard that allowed us at the end of the war to reset the dollars value when we went back on this standard. We dropped out of the gold standard a number of times based on the excuse of War all the way through World War I.

The first time we did not drop off the gold standard as a result of war was World War II when the Federal Reserve refused Presidents Roosevelt request to do so. FDR’s first request came at the beginning of the depression and also was refused. Some economists believe this single action is what caused the great depression, others simply believe it increased the severity. As a quick note, it was not the the Stock Market Crash of 1929 that caused the depression but the great dust bowl and drought. The stock market had recovered much of its losses within 4 months. Once again our history, post 1937 often seems to not reflect the realities of the past.

If we go back and take a good look at our real history, with the exception of the benefit we gained from the massive amount of gold reserves we accumulated during World War II, the real source of our prosperity into the mid 1960’s, America’s economy has not been as stellar a performer as we have been lead to believe.

The Dirty Truth

There is a fundamental problem with our economy. It is truly fundamental in every sense of the word. And although is not “Fun” you are guaranteed to feel both brain dead “Duh” and “Mental” if you try to understand it.

We believe that we have had a robust and growing economy though most of our lives. Even at the current limits of human life span most of Americans were born after 1928. Most of us have come of age after World War II. And almost all of us working today were born after 1950. We have for the most part lived through what we believe is the hay-day of America’s economic history. And our perception is false!

While we had significant prosperity after World War II, it was largely the result of the cash and carry policies that FDR put in place with western Europe for the sale of war materials by America. FDR enacted two major policies; lend-lease, and cash and carry. Under Cash and Carry, much of what we sold to the allies was paid for in gold. By the end of the war America held in Fort Knox a majority of the gold in the world. I have seen estimates of as high as 82% of the world’s gold. After the war and as we moved into the 1950s America was booming and we had a large amount of room to expand the amount of currency in circulation since we had most of the gold. But by the 1960s, our policy of allowing other countries to redeem U.S. Dollars in gold had seen our reserves significantly depleted as most of our Allies, England, France and Germany had systematically redeemed their dollars for our gold. By the mid 60s we again were having problems maintaining enough currency to support the perception of our growing economy.

By 1972 President Nixon had a cash problem. We did not have enough currency in circulation for the government to continue to pay its bills, including Social Security, Medicare and Medicaid, as well as pay for the war in Vietnam, and the ongoing cost of the cold war with the soviets. As a result, the Federal Reserve advised the President to remove the American Dollar from the gold standard. In doing so we gained the ability to create more currency to fund the cash needs of the government and the nation. But, there was still a problem.

While the elimination of the gold standard, did free the economy from the physical limits of the gold standard, it did not free the banks, where new currency, actually is created, from the limitations of the fractional reserve banking system. Banks under our form of banking can create ten dollars of currency for every dollar of assets (or debt) they have of record. While this was far better than the practical physical limit we had on the gold standard, the growth of debt by the government and obligations under federal programs, defense, logistics and entitlements were growing much faster than the asset base. Debt, the other method to grow the amount of currency became the main method.

Money Supply vs Trade Imbalance and Federal Spending

In 1972, America had, according to the St. Louis Federal Reserve Banks, about $500 billion of currency in circulation. Currency, prior to this period had grown on a fairly steady low growth rate from the $73.7 billion in circulation in 1940. While the rate of new money in circulation increased from 1940 to 1972 increased over the prior years the growth was still predicated on the tie back to the gold standard and as such most of the growth was real in relation to the bulk of the world currency and tied directly to the asset base of the U.S. In other words it was mostly real economic growth.

From right after 1972 to about 1986 the growth in currency supply was driven by increases in credit card debt and the ability of the Federal Reserve and banks to leverage that debt growth with new money at the rate of ten to one. You will also see from the above chart that we were steadily increasing both federal spending and accumulating losses due to the ongoing trade imbalance. The main restriction on the growth of new money was the fact that the bulk of the main debt in the U.S. (mortgage debt) was in the hands of S&Ls and other non-banks. You can see from the chart as the S&L’s failed as a result of the changes in rules for realizing asset values, like the mark to market rules, and the banks gained control of these mortgages – and the underlying ability to leverage them at ten to one, much more currency came into existence. Of course as the currency materializes the federal spending increases as well. By the time we get to 2010 we have increased the amount of currency from the meager $500 billion in circulation in 1927 to over $15 trillion in 2009, a thirty times increase. One simply needs to ask themselves did we really increase the values of all the assets of the U.S. thirty times since 1972? I don’t see how!

And of course by 2009 we have also accumulated a combined debt based on federal spending and the steadily accumulating trade deficit of over $11 trillion. Even harder to imagine a thirty-fold gain in relative net worth of America isn’t it?

So where did this new money go?

As I discussed in a previous article entitled, President Obama’s Speech: Critical Question Continued, this new money was disproportionately spent in the areas of federal program spending and housing costs. The effect this has had on our economy has been catastrophic. If you look at the chart in the prior section, the amount of spending has almost equaled the new money created. An interesting statistical note is if you look at a simple projection of what our economy would be today if we had stayed on the Gold Standard it would be about a $5 1/2 trillion economy instead of $15 trillion or more as we currently see it. This could just be a statistical coincidence, I will leave it to the professional economists to explain this – although when they do I seldom trust them.

So one of the fundamental problems is that our economy is simply not worth the paper we have printed to count it. We have significantly overvalued our economy, alnong with much of the rest of western Europe. If everyone in the world did this the same way it would be irrelevant. But China and Russia, among a few smaller others, have not banked this way. While we like to complain that China is “manipulating their currency” the truth is they simply are allowing their currency to stand at its value and are not increasing the amount of their currency and thereby artificially inflating salaries or benefits in the country. As a result, China, and many others cost significantly less to make stuff for the rest of the world.

You see what we have been lead to believe about our prosperity over the past 30 years has been an artifice, a mere contrivance. While we have all felt like we were getting richer, and our elected officials have been telling us to spend more, and borrow more on credit, and how we should all buy houses. The reality is what they were doing is getting us to go further and further into debt to provide fuel to the fire of our own economic destruction. So while our borrowing, spending and mortgage debt allowed them to increase the amount of money in circulation, the new money had no more value. It was all a facade.

This brings me to the current argument of the 99% against the 1%. The reality is, it is not the 1% who have done anything to take the value from the 99%. I think we effectively debunked most of that myth in the prior sections. The real issues effect the middle class the most. The poor and the rich have been effected exactly the same but they have not felt the effect the same as the middle class – the under-served.

The reason the middle-class have been so devastated is a result of the following two points. First, the rich have larger amounts of discretionary monies. These are monies that are not consumed by the cost of basic day to day living. The rich also have more savings and a larger portion of their earnings come from investment. Therefore when the purchasing power of their dollars falls they have a lot more drop to go before the true value falls below this basic day to day cost level, even at their higher costs as a result of more lavish life styles. In other words, they are not taking more they just don’t show the effects because they are not yet felt.

Second, the poor, as we discussed before, get at least half of their income from the federal government, so as the value of the dollar drops, the government is just printing more money and providing more benefits to the poor in America. The source for the spending is only in part taxes. So while it is clear that even if you took 100% of the earnings from the top 1% it would not even put a small dent in the economic issues we face, and taxing the rich politically sounds really good, in the end it is not solving the problem.

Taxes are neither the problem nor the solution. The problem is we have simply created at least twenty times more currency that we have real value in the economy. And as such the middle class, equaling 19.2% of the population, 59.8 million people, are feeling the crunch. Our professional political class, with the best of intentions at every singe step, have gotten them to take on debt they could not afford, buy homes they could not afford, hire employees companies could not afford, pay salaries we cant afford, provide free stuff, that we can afford, and purchase products and services that we can’t afford. They have built a national economic system that is predicated on federal subsidies – through the creation of more valueless dollars – to lull us into a false sense of security.

Americans today, cost too much, spend too much, borrow too much, expect too much and often work and produce too little per capita relative to the rest of the world economy. We speak of creating more jobs, but then we focus them in areas that do not bring our nations strategic value. Yes paying people to fix decaying infrastructure is necessary, but it is not the same creation of new value as when FDR created the WPA in the 1930s. Having an entire nation of college graduates makes us all warm and fuzzy and makes us feel really superior to countries like Mexico, and Singapore, but they have cheap labor and less per capita expense for laborers. As a result their goods cost less and we buy much more than we sell as a nation from these nations.

We make all our companies provide tremendous benefits for being an American employee but these also increase the cost of the development of goods and services and price our products out of the world economic market. We tout our abilities as the innovators of the world, yet the profits from innovation are dwarfed by the profits from the manufacturing of the products we have innovated. And now other countries are surpassing us as innovators. Their education systems are producing superior students because not everyone goes to college. Some are tracked for labor, some skilled labor, and only a few go to college – often American colleges. We have no labor pool to speak of and we have invested way too much in many of those that end up in labor related jobs because we sent them to college only to find there were no jobs for their level of education. Further, there is an argument that we have weakened the quality of an American college education because so much of our dollars are spread across so many.

Yes, overall we are in a very sad state. I am not an economist – just an individual who has asked some questions and tried to find my own answers. Are my answers the right ones? – the only ones? Perhaps not! But for me they have begun a path – so I can draw my own conclusions. I do know this! Until we address some of these fundamental questions, most particularly the big one of our highly inflated economic values, we will continue our decline, and likely will continue to seek solace by letting our professional political class print more money and lull us back to sleep.

It is time to wake up from our 40 year dream of profligate prosperity and face reality. The concept that the other guys need to sacrifice but not me is a false one. The sad part is we already have sacrificed. Our prosperity is already gone. The only thing left is the counting! Oh yea, and class warfare, revolution and destruction if that is what we really want?

What do you want?

Republicans & Democrats: Division destroys WE

This article is in response to a recent letter to the editor in my local paper.  In this letter entitled, ” GOP debt”, the writer makes his point that the U.S. debt is the Republican’s fault – that most of the debt incurred has happened under their watch, as a result of their programs.  He blames the current problems of America and its economy on thirty years of their dominance over Washington DC.  This article is not intended to challenge any of his assertions, or to attack the credibility of any of his arguments.  Fundamentally, it will not make any difference whether or not, he is correct as to who was actually controlling our government during the past 30 years.  The end point would have been the same.

Instead, I think it is time for all of us to take a hard look at a timeline for the past 76 years.  I have assembled a brief one here.  This is not meant to be inclusive of every single event, nor could it, as many would debate the events themselves.  I also have not intended this to try, by the volume or magnitude of events for either side, to lead anyone to the conclusion that one side is more at fault than the other – although I am sure some who read this will still complain of bias and that intent.

WE is us – We the People.  Not Republican, Not Democrat – neither liberal nor conservative.  It is simply WE.  Unless, or until, WE again congregate as one in purpose, we all will lose!

I have simply taken my own personal stroll through history and picked the particular events I felt were important, pivotal, in our long and involved – often entangled process – to arrive at the door of what may be America’s economic collapse.  We are at this doorway as a result of numerous decisions and actions.  We have made many many decisions in this period.  Most of the decisions were originally contemplated to fix contemporaneous problems of the day.  In this time we have developed a nasty habit of enacting short term programs with an intention to replace the programs with other solutions later, only to have the replacement step get lost along the way as we allowed the growth of a professional political class and the virtual elimination of the citizen politician on which the country was founded.

I don’t know if a professional politician is better for us in the long run than a citizen politician.  I can see advantages on either side.  History and the electorate soon will make that determination.  I do believe that at each step, for the most part, the politicians were attempting to fix the problem in a way they thought was best both for the country as a whole, their constituency, and their own re-electability.  While I can idealize a desire for so much more in the decisions of my representative, I must concede and accept the nature of humanity after all in this process.  It becomes my responsibility to elect the best person in support of the best solution. In effect to be a Mugwump.

In the end, it makes little difference.  Until we truly understand the mechanisms and fundamentals of our current situation – and correct them, we will continue to glide through the open door of disaster – slipping at some point into the empty maw of the economic abyss.

A Time-Line of Key Events

  • 1935: Social Security Act – Franklin Roosevelt (D)
  • 1965: Extension to Social Security Act (Medicare & Medicaid) – Lyndon Johnson (D)
  • 1972: Elimination of the Gold Standard – Richard Nixon (R)
  • 1974: Equal Credit Opportunity Act – Stimulates credit purchases – Gerald Ford (R)
  • 1977: Community Reinvestment Act – Jimmy Carter (D)
  • 1980: Depository Institutions Deregulation and Monetary Control Act – Jimmy Carter (D)
  • 1981: Initial Application of the Mark to Market Rule – Ronald Regan (R)
  • 1985: Home State Savings Bank begins to fail – Ronald Regan (R)
  • 1986: Tax Reform Act – Ronald Regan (R)
  • 1995: End of S&L Collapse – Assets sold to Banks – RTC cost $87.9 Billion – Bill Clinton (D)
  • 1995: National Homeownership Strategy Announced – Bill Clinton (D)
  • 1999: Fannie Mae eases the credit requirements to encourage banks to extend home mortgages to individuals whose credit is not good enough to qualify for conventional loans.
    The Gramm-Leach-Bliley Act repeals the Glass-Steagall Act of 1933 – Bill Clinton (D)
  • 2000: Lenders originating $160 billion worth of subprime, up from $40 billion in 1994. Fannie Mae buys $600 million of subprime mortgages, primarily on a flow basis. Freddie Mac, in that same year, purchases $18.6 billion worth of subprime loans, mostly Alt A and A- mortgages. Freddie Mac guarantees another $7.7 billion worth of subprime mortgages in structured transactions.
    Credit Suisse develops the first mortgage-backed Derivative (CDO).
    Commodity Futures Modernization Act of 2000 declares credit default swaps (and other derivatives) to be unregulated, banning the SEC, Fed, CTFC, state insurance companies, and others from meaningful oversight. – Bill Clinton (D)
  • 2003: Federal Reserve Chair Alan Greenspan lowers Federal Reserve’s key interest rate to 1%, the lowest in 45 years – George W. Bush (R)
  • 2008: Global Financial Crisis Begins – Feds Take over Fannie Mae Freddie Mac and guarantee $6trillion of mortgages, Fed Reserve Lends $85 Billion to AIG, $700 Billion TARP Program goes into effect, Fed lends $1.3 Trillion to companies outside financial sector – $900 Billion loans to banks and buys $540 billion in short term mutual find debt – Fed Loans 133 Billion to foreign banks, Fed pledges $800 Billion more to buy mortgage bonds from Fannie and Freddie – George W. Bush (R)
  • 2009: Fed increases support of AIG by $182.5 Billion, U.S. Government supports various Auto Manufacturers with $34 billion bailout package, Fed Injects approximately $2 trillion into the economy in new currency under term Quantitative Easing. – Barack Obama (D)
  • 2010: Federal Reserve continues injecting money into market under quantitative easing of $1.5 trillion, Banks begin to repay Govt. Loans, Patient Protection and Affordable Care Act is passed – Barack Obama (D)

Whats The Point

When I was contemplating writing this article, I had thought I would explain the relevance of each of the events I have listed.  In the end, I decided it is not up to me to tell you what to think.  It is your right, your privilege, and your obligation to find that out for yourself.  Should any of you wish to ask my opinion, or to tell me what you think, you may feel free to post in the comment section.  I will tell you my thoughts and conclusions and of course listen to your point of view.  Perhaps along with the others who read here we can continue to refine and get closer to a solution – get closer to WE.

The aforementioned timeline is by no means each and every issue that has drawn us into the potential collapse of our economy that we face today.  What is evident from even this brief review, is that the bad decisions were all short term fixes to solve contemporaneous imminent problems of the day – they span all parties and administrations.

My Conclusion

Our economic problems are neither Republican nor Democrat, they are only American.  We have done this to ourselves.  Only if we are united in this purpose, can truly fix them!

My Request of You

I ask each of you, who are kind enough to read my writings, to please circulate this to others if you feel it is valuable.  I believe we can all make a difference if we come together.  I know I can’t do it alone.  I ask you, my readers, to help at least get others to consider that there is something here bigger than ourselves and our politics.

Those who cannot remember the past are condemned to repeat it! Well do we remember?

Jorge Agustín Nicolás Ruiz de Santayana y Borrás 1863 - 1952

The title of this piece, a quote from George Santayana – a Spanish American philosopher, essayist, poet, and novelist, is a familiar refrain to all.  Most of us have heard this many times throughout our lives.  So much so, that I think many of us choose to ignore it as a tired and hackneyed phrase seemingly irrelevant in our modern and “enlightened” state of mind. Yet, this is one of those ‘old saws’ that continues to cut deeply into our collective bodies when we do fail to remember the lessons of the past. We need no more evidence than both our current economic condition and our political climate that we are in dire need of this lesson.

Yes, in fact we have all seen this before – many times – throughout our history.  Some of it we should know because we supposedly were taught it in school.  Some of it we don’t know because we were not taught it.  As we approached the mid-point of the last century we had a world conflagration and we had a good President that rightly knew he could not get our great nation united to fight yet another war unless we all recognized the exceptional nature of America and its people.  So with the best, temporary, intention we rewrote our history – American Exceptional-ism was born and our nation’s youth gained the will to enter World War II. Like most of FDR’s temporary government measures, this one too became permanent and we still experience both its consequence and benefit today.  One thing we should regret is an accurate view of our great history has been lost – along with the many lessons we should have learned.

If you would like to read some of the historical views of America’s history that were prevalent prior to 1935, Google Books has some reproduced on line.  They are a very interesting read with a significantly different and in come cases contemporaneous perspective as to who we believed our selves to be, what we were aspiring to become and where we honestly were at key points in our own evolution.  Here are some sources I recommend, with links on Google Books:

  1. The History of the United States of America by Henry William Elson: 1904
  2. The History of the United States of America by Henry Adams: 1889
  3. The History of the United States of America by Rev Charles Goodrich: 1823
  4. The History of the United States of America (an 8 volume set) by James Ford Rhodes completed in 1920

Having spent a lot of time reading this history as I was preparing to write, “The History and Evolution of Health Care in America,” I came quickly to realize that people back in the day really did know the key to prosperity and happiness! Although long under siege by both President Roosevelt – who initially stimulated the growth of Unions to foster job creation and later reconsidered his actions – and then President Truman in an attempt to reign in the Unions growing power, even the venerable Unions understood on which side their bread was buttered.

“When anybody preaches dis-unity – tries to pit one of us against the other through class warfare – race hatred or religious intolerance – you know that person seeks to rob us of our freedom and destroy our very lives!

And We Know What to do About Him!

The previous quote takes on a whole new relevance when you realize it was stated in a propaganda cartoon in 1948. Forwarded to me by Pam M., one of my oldest friends, the following cartoon is not only entertaining, it is quite prescient.  I hope you enjoy, “Make Mine Freedom”

Thanks Pam for this entertaining reminder of George Santayana’s very important life lesson!  I think it reinforces our collective need to be Mugwumps!

As always I look forward to your comments below.

State and Federal Budget Crisis Solved: Professional Political Class Finally Provide Value

OPresient Obama leaving Air Force One upon arrival in San Francisco on fundraising tour

"A picture is worth a thousand words." -Fred R. Barnard: Its about the money.

Please bear with me on this article.  in contrast to the best advice for writing, I have not put the conclusion at the start.  I am assuming you are all thinking Americans, and you are willing to make a short journey with me to find your own answers at the end!

Unequivocally, we have developed a professional political class.  We, the people, have created this new ruling class of professional legislators – or at least allowed them to evolve – over the past 72 years.  Like most of our entanglements in modern history, this consequence  was driven by little more than a series of short term decisions that were made to accomplish short term goals with no thought to the long term impacts of these actions.

Why not a national sales tax on all political sales(contributions)?

Up until the early 1900s, politicians were citizens first.  They were regular people, living and working alongside their neighbors.  They had local jobs, farms, or businesses and each and every piece of legislation they passed affected the citizen politician exactly the same way it did their neighbors.  Since the wages and expenses that they derived from their service in state or federal government was both part time and not meant to provide a living wage; their motivations were to be productive members of their localities, emphasis on production in whatever capacity, as it was the best path to wealth and prosperity.

Since these citizen politicians, could not make their livings relying on the payment from government, the various legislatures were part-time with the sessions restricted to just a few months each year. While in session, citizen politicians also made sure they got as much done as possible, and their supporting staffs and expenses were kept well in check because often the governmental stipends did not adequately support them, so the citizen politicians often came out of their own pockets for at least some of their staff. A great way to assure dedicated representation.

As we move through the early 1900s we see a gradual and steady increase in the salaries, perks, and reimbursable expenses that our legislatures received.  Like all of our historical short sited decisions, there was strong rationalization to such increases.  Some of the citizen politicians, living with the constant drain on their personal funds, were susceptible to graft and corruption by the men hanging out in the lobby of the Willard Hotel in Washington, DC (origin of the term lobbyist) – where most stayed during the legislative sessions. Of course, it was argued by the legislators that if they received better wages, more liberal expense budgets, and perquisites in office, they would be less susceptible to corruption.

Commerce (n)

(Business / Commerce) the activity embracing all forms of the purchase and sale of goods and services

[from Latin commercium trade, from commercārī, from mercārī to trade, from merx merchandise]

Collins English Dictionary – Complete and Unabridged

The next step, taken in the middle of the 1900s, was to extend the legislature.  Again, it was rationalized that the part-time legislatures, were critical to the growth and prosperity of the country, or the states, and there was so much work to be done that they needed to increase their time in session.  These arguments, like all of the rationalizations before them, were seen as reasonable and necessary.  As a result, buy the end of the century, we have, with few exception, full-time state and federal legislatures, and most importantly, a full-time, professional political class.  Their livelihoods significantly disconnected from the legislation passed and its effects on their local communities.

While in the past, our citizen politicians life and liberty was supported by their own personal productivity in their local communities as farmers, shop owners, business owners, manufacturers, and professionals like doctors and lawyers; for the most part today’s professional political class trades in votes and legislation for the specific benefit of those who can get them re-elected.

It is an easy statement to say that there is a direct relationship from big corporate money and the payments the professional political class receive, through various means both legitimate and illegitimate.  While corporate interests play a part, the aggregation of small money interests plays at least as significant a role through unions, political action committees, professional organizations, and the strength of the various parties, among others.  Regardless of the source, the money alone is not the focus of the trade – in the end it is about the votes!

Votes themselves are the stock and trade of professional politicians.  All the money paid into the various campaigns is exchanged for this tangible, valuable item – the vote.  Since we no longer have citizen politicians and most of our state and federal legislatures are the full time employers of this new professional political class – who employ by far much more than half of all the people in America, why don’t we recognize this for what it is?  This is nothing more than a commercial enterprise! No different than Google, Linkedin, Facebook, the AARP, or many other national organizations.  It can be argued that the parties themselves as simply franchisors.

“Obama visit nets millions: Next stop – LinkedIn for town hall meeting”
– Contra Costa Times, 9/26/2011

President Obama, arguably the top franchisee of the Democratic party, was in the San Francisco Bay area this weekend selling his wares.  He collected, somewhere between, $3.5 and $5.5 million in back to back fundraisers.  Think about all the money that is being paid for these goods and services sold by our professional political class.  It begins to boggle the mind; does it not?

When we had part-time citizen politicians it was appropriate to call these campaign contributions.  But I think today we can all agree that calling them political sales is more accurate in this day and age.

Perhaps we should have a national sales tax!  But it may not be necessary to assess this tax on all segments of commerce in our economy.  We only need to assess a “National Political Sales Tax” (NPST) on the one segment of the economy that is clearly generating most of the “commerce” in the nation.  We should implement a national sales tax on these political sales.

In the long run we may get some real benefit.  We could see a significant reduction in our state’s and national debts in the short run as the massive amounts of money flow into the various coffers. We may also begin to see the reduction is the constant din of political advertizing, direct marketing and evening phone call solicitations.  If for some reason this benefit does not rise, or rise fast enough, then we could extend the NPST to cover all political purchases as well.  At a 10% tax rate, the purchase of one of those $19.00 muffins would yield $1.90 in revenue to the federal and/or state coffers.  How many muffins do these guys consume in a year?  Looking at Jerrold Nadler, Barney Frank, Chris Christie, Haley Barbour, and many, many others this alone could wipe out lots of debt!

Of course many are just not going to like this idea! No one wants to see their livelihood threatened by taxes.  I would suggest that if they object to the tax then we should demand a return to the citizen politician, and the part time legislatures of the past.  In the long run I think it could be one of the most beneficial changes we could make for our country.

Hey, I’m just asking!

Opinion – Image – NYTimes.com: Understanding in Three Steps?

Opinion – Image – NYTimes.com.

Understanding Step 1

This chart from the New York Times, is very interesting.  The data presented is very telling but perhaps not in the way the author intended.

When you look at these charts what do you see?  After you look and answer the question for yourself go to the next step.

Understanding Step 2

See this article for more information: President Obama’s Speech: Critical Question Continued.

What I see when I look at the data is very different from what I think the author’s point is.  We are all tainted by our biases.  We look at data, compose charts and in the end we see what we want and often construct the defense of the reality we want to see.

What I see when I look given the discussion in my prior article is first that Productivity tracks point for point with the increases in currency from 1972 on.  This should not be any surprise.  The way we measure Productivity is directly related to currency.  The question is in this case the old one, “which came first the chicken of the egg?”  In this debate one side will say chicken and the other will say the egg.  One side will be firmly of the mind that the productivity drove the increase in currency according to economic theory,  the other side will say the increases in currency inflated the productivity numbers.  Either may be correct and both are at this point irrelevant.  Which drove what now pales in comparison to the question of is the current net value of the U.S. supportive of the amount of currency (value) we have applied to it.  This is 1/2 of the most important questions.  The other 1/2 is – if not, how do we fix it?

The next thing I see in the charts, is that Wages did not track to the rise in currency nor did the gains of the wealthy.  While you see some trending with the increases in either prosperity or currency, you should expect to see that.  Wealthy people have the ability to derive more of their worth from long-term gains and theoretically should capture more of the currency in the economy.  Again the argument of fair or not fair, while a fun and spirited debate does not change the fact that the trend-line of the data does not correlate to the Currency in circulation chart in the prior article anywhere nearly as closely as Health Care Costs or Housing Costs.  It is these subtle differences that suggest an alternate cause for the increases of prosperity.  Further it is the timing of the trends.

Finally, I see that the debt line that is shown in the chart is not indicative of the true debt but in fact the result of the application of the increased capital to pay off part of the debt that accumulated from 1972 due to the trade imbalances.  We have accumulated over $12 trillion in trade deficits to the world since 1972 when we dropped the gold standard.  If you plot that curve against the Currency in Circulation curve again they are almost a point for point match.  The debt curve reported is not a point for point match.  It is the result of result of the combination of the two.

Understanding Step 3

Remember Mark Twain said, “there are lies, damn lies and statistics!”  All of these numbers need to be suspect – mine included.  But in the end this is not a republican issue nor democrat issue – it is an American issue and it will take all of us to address it.

President Obama’s Speech: Critical Question Continued

In his speech last night president Obama asked a key question.

President Obama asked, “Where would America be if we had not passed Medicare and Medicaid?”

As I said in my post last night, “President Obama’s Critical Question,”  the president’s question should not have been be a feel-good throw-away line, as it is the underpinning of the base argument, that Medicare and Medicaid have been good for us as a people and for the country. Clearly, the president believes that the answer to these questions is in the affirmative. But, what if the answer is not?  These are areas that I think many need to analyze.

Those who have been reading my articles know that I have a strong concern that the underlying issues in our health care system and our economy are systemic and the areas we are focusing on are, in effect, addressing the symptoms of the problems – not the root causes.  In my upcoming book, “The History and Evolution of Health Care in America: The untold back-story of where we’ve been, where we are, and why health care needs more reform!” I look at the relationship between the rising costs of health care and trace in part one cause to the large expansion of government programs like Medicaid and Medicare.  I also found correlations between the rapid increase in the amount of currency we created, after we jettisoned the gold standard in 1972, and the disproportionate allocations of these new monies to health care and other government subsidized programs like housing.

The relationship of the Total Money Supply (M3) to our current economic issues I will cover in a later article, but for now look at the direct, almost point for point, correlation of the rise in the total health care spend in the U.S. and the increase in the money supply.  I think there is no doubt that the significant increase in the amount of currency in circulation and the rapid rise of health care costs run hand in hand.  It is very clear, as Sancho said to his master, Don Quixote de la Mancha,

“Whether the stone hit the pitcher or the pitcher hit the stone – it was going to be bad for the pitcher!”

In this case, we can argue later whether the increase in currency drove the increase in costs or the increase in costs drove the need to increase the currency, it was the expansion of Government programs like Medicaid and Medicare that drove the increase in costs.

Housing also rose in a point for point correlation as well.  Unlike with health care, you can see it was an advance indicator.  This make sense, according to economic theory and the basic premise of fractional reserve banking because our the engine of economic expansion (the creation of new money) is debt.  Most preferably mortgage debt.  If housing prices did not rise and new homes and the resultant mortgages did not happen then the banks would have become rapidly out of covenant if the new money existed before the new mortgages were there to leverage against.

Lastly in this article, I include a chart of a few other cost histories, lest we think that all parts of the economy had the same correlation to the increase in the money supply.  Clearly, wheat corn and eggs did not experience the same effect from the increase in the money supply – nor does it appear they led the need to increase the supply.  I believe that most peoples practical experience is that not all things have risen in value twenty times in the past forty years.  Herein is the potential rub!

I will continue the discussion related to the presidents key question in my next article.  In that I will focus on how the creation of Medicaid and Medicare changed our personal character related to our view of our personal responsibility for our health care and how this change has affected our fiscal habits and our purchasing patterns and trends.

Please feel free to comment on this article or send it to others.  As I have said many times this is not a republican nor democrat issue.  I think this is an American issue.  I am not an economist just someone trying to understand why these things are happening now.  We need pragmatic solutions not demagoguery so lets find out what is the truth and then how we can fix it!

President Obama’s Critical Question

Tonight president Obama asked a very key question. This is one of those great moments where one question that really is one of the key questions was used as a throw-away, feel-good line.

President Obama asked, “Where would America be if we had not passed Medicare and Medicaid?”

This is really a key question, is it not? This question should not be a throw-away line, as it is the underpinning of the base argument, that Medicare and Medicaid have been good for us as a people and for the country. My opinion is this is, in fact, one of the major differences in the grander debate. Clearly, the president believes that the answer to these questions is in the affirmative. But, what if the answer is no? What if the truth is, that Medicare and Medicaid, have driven up our health care costs, disproportionately? What if these programs have fostered an era of unprecedented lack of responsibility? What if these programs have been one of the significant contributors to the base cost of business in America, and are one of the key underlying reasons that America is no longer able to manufacture goods cost-competitively for the rest of the world to purchase from us? What if these programs have so changed the nature of our economy that we now have accumulated a trade deficit in excess of $12 trillion since 1972 and we can’t become a net exporter because our goods are too expensive?

I think these are the key questions that need to be discussed. I submit the president will not like the answer. I also submit neither Presidents Obama nor Bush, nor republicans nor democrats are to blame for the problem. I further submit it is this issue that is the key problem we need to pragmatically solve.

President Obama should get some credit for asking this key question. He should also get some critique for using it as a throw-away feel-good line to rally his base – particularly if the answer is not as he is assuming!

I hope others will help tackle this question in the next few days. I know I will be continuing this dialog in the next few days specifically on this topic. It has been key to my research and understanding on the crisis we have in our health care system, if is one of the core issues discussed in my book and something that I feel we must address.

What goes around may be wrong: ‘three charts to email to your right-wing brother-in-law’

‘three charts to email to your right-wing brother-in-law’ « The Obama Diary (Photos, Videos, Words).

There has been a bunch of reposts of three charts showing the relative deficits and spending increases from Both President Obama and President Bush. While this gives great fodder for the let’s bash each other and show just how bad the other guys were crowd, the charts themselves are a waste of ink and lung power to debate.

While the charts, are interesting, and like most statistics represent the adage that,

“there are lies, damn lies and statistics”

popularized by Mark Twain and originally a quote from Benjamin Disraeli; they are irrelevant to the bigger problem. While we can argue about one president solving the budget problem and the other one making it worse, all were relying on the underlying bad economic engine to make it all right.

Those who have read my posts on the subject, know I believe there is a deeper problem. The massive increase in currency since 1972, which in my opinion has given rise to a national crisis of false and inflated values and costs for subsidized programs, health care costs and housing I believe, is the real problem. Perhaps, it is our own underlying valuation of our economy and our assets that are the problem?

M3 With 1972 Gold Standard Trendline

Since we all seem to like charts, I will pose my own here. I am not posting this to assign blame, we have way too much of that going around. Nor, am I saying this is an infallible calculation – as I myself am not sure. I will leave it to others to wrangle with that debate. I am posting it to have you see what I saw as I was studying the rising costs of health care and started looking at other segments of the economy. I have a number of charts that will appear in my book. In the meantime here is the one that started me thinking.

This chart is relatively simple. It is the M3 (the total money supply calculated by the Fed) from 1900 up to 2010. From 2006 on the Federal Reserve decided to no longer report the M3, the M3 then had to be estimated.  There are a number of different estimates, their only variance is the shape of the curve after 2007. And they don’t make much difference in the current problems.

There was about $500 billion in currency in 1972. Today estimates put that number at somewhere between $10 trillion and $15 trillion. What doesn’t change much regardless of the trend, forecast or growth calculation you apply is what the projected economy would be if we had remained on the trend-line as it was prior to 1972. This line will project about $3 trillion on the baseline economy for today – assuming we had continued on the Gold Standard. If you factor in the gains we would still  likely have had in the technical sectors as a result of the investment in NASA, the curve shows additional growth to somewhere between $5 and 6 trillion.   This is still a far cry from the unbelievable 20 to 30 times we have multiplied the economy during this period.  Remember,  “lies, damn lies and statistics!”  I hope you treat this projection with the same scrutiny as all the others!

I am simply suggesting that we need to look deeply at this issue and diligently consider it’s effects if this supposition is even remotely correct!

The Blame Game: A Recent Letter to the Editor

“…it is thus compromise on the basis of tolerance for others’ opinions that lead us to good solutions….” – Benjamin Franklin

In a recent letter to the editor, yet another writer wants to make the point that the current economic problem is President Bush’ fault. He uses all of his 200 words to carefully craft a picture of why it was Bush’ fault.

Yesterday, I saw the same thing as to why it was President Obama’s fault. Again, all two hundred words carefully selected to make this seemingly very important point.

Having written a few letters to the editor, I can tell you from first hand experience it is not usually for me a five-minute thing. Two hundred words is a very narrow field to present a counterpoint to some point you are debating. Usually it takes almost half of the space to frame the issue in the first place.

These two writers are not alone. I see tens, if not hundreds, of these dialogs each day. Each side spending an inordinate amount of time to present the case why this person, or this party was wrong, wrong, wrong…

Clearly, the sheer volume of people, and the amount of time, bandwidth and ink devoted to this subject would indicate it is of the most extreme importance. Well it’s not!

The big issue at the moment is solving the problem. And solving this in a pragmatic way – not partisan way. unfortunately, it is not just the new mayor of Chicago who thinks no crisis should go to waste. It seems to be the philosophy of many of us if not most of us.

Each issue appears not to be an issue we need to solve – more it seems they are issues we should exploit for some other benefit. This has been the pattern since the early 1960s. The Great Society was not just to find solutions to help the poor, it was as stated by Lyndon Johnson on a phone call with Wilber Mills and Carl Albert,

“something that we (democrats) can run on for the rest of the century.” (listen to the President Johnson Tapes online, search on medicare)

And we can’t leave republicans out of this either. They have played the same games over the years.

Since everyone seems to think we need to assign blame before we solve the problem, let’s do this. Lets agree to start at the beginning of the root causes…

  • It is Franklin Roosevelt’s fault for describing Social Security in 1935 without recognizing that the transition to a private annuity system as he described would be lost to the winds of entitlement fever.
  • It is Truman’s fault for both extending the coverage and not addressing the concerns of the legislators at the time that argued about future insolvency.
  • It is Eisenhower’s fault for also increasing benefits and coverage while again not addressing the growing concerns over solvency
  • It is Kennedy’s fault for again extending the coverage and entitlements and getting assassinated before he could begin to affect some of the changes he saw needed to be done.
  • It is Johnson’s fault for extending the original act to include Medicare and Medicaid, ignoring the advice of the experts in congress including Wilbur Mills who repeatedly warned this scheme would not work, and then codifying the grants and gifts to the poor as the method to ensure democratic election and instituting the class warfare approach that is now the norm.
  • It is Nixon’s fault for removing the country from the gold standard instead of extending the standard to all precious metals.
  • It is Carter, Regan, Bush and Clinton that further reduced the restrictions on the banks, changed the regulations like the Mark to Market Rule and eliminated the Glass Steagle Act that multiplied the fiscal problem and continued the course of expanding entitlements.
  • And it was both Bush and Obama that again compounded the problem by consenting to the short-term solutions and compounding debt based fixes.
  • Further, it is all the congresses, bankers and federal reserve leaders that are also at fault for not addressing the issues, using them to fulfill other agenda and promulgating their self interests ahead of strategic solutions.
  • And finally, it is us for not paying attention and reveling in the constant, and unrealistic, expansion of our wages, home values, benefits, and desire for more without looking for or listening to concerned opinions.

Did all of these actors in this damnable play behave badly for their own self-interest? Not really. Where there certain hooks that were included at each phase to get our consent that were in their best interest? Of course! In every case there was justifications for why, and many times good arguments on why in the short-term this solution, or that solution, made sense. The problem was, they also knew in the long-term there would be a problem and did, or could do, nothing at the time to fix it. Of course, once the issue was temporarily solved – no one else chose to address it so it was pushed to the future to deal with it. And now it is ours. And it is, in fact ours. It is not our children’s as we like to think. We have run out of time and circumstance. That is why the symptoms of the disease are again raising their ugly heads with a vengeance.

Now that we have discussed blame, let us all tolerate the blame assigned to our favorite figures as we relish the blame in those we don’t like. If we simply agree the blame is inclusive and historically almost all-encompassing, then perhaps we can stop the blame debate, at least for some of us, and focus on solving the current dilemma.

This problem is a collective problem. One – many years, many parties and many administrations in the making. It is at our doorstep and will either define the next stage of our prosperity as a nation or our inevitable decline. We must all stop trying to focus on who it was that is at fault and how we can use it to foist our “pure” ideology on the other side. We simply must find a good pragmatic solution.

As Ben Franklin said, ” it is thus compromise, based on tolerance of others opinions that leads us to the best solution!”

ACA, Politics, Mandates and the Commerce Clause

Focusing on the insurance mandate in the Affordable Care Act, (Obamacare) a few months ago I wrote a series of four articles for a publication, reproduced here as, “Health Care Mandate and the Commerce Clause Articles.”  In these four articles, I explored why I found the base argument that the government could regulate activities like these in a state difficult to fathom by reading the commerce clause in the constitution.

[The Congress shall have Power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;

In my original look at this issue, I examined  the precedent cases cited by many as the basis for the idea of why the Federal government had, in this case, a superior right to the sovereign rights of the states, something that all agree was expressly limited by the framers of the constitution.   Reading these historical rulings made this concept that this is a Federal right even more difficult to swallow because I found that these earlier rulings often were even less convincing and often more startling in the extent that the arguments became even more extracted and remote in their nature.

In reading  the arguments and the rulings of the 11th Circuit U.S. Court of Appeals, I found an additional reason why I find the base idea that the Federal government has the right in instances like this to regulate the action of individuals in a state even more specious.  This is actually the simplest argument against such a right, and likely it would even hold the same effect at a state level.  It is part of the many arguments that have been made in the numerous constitutional challenges over these past few months.  But like much of these debates, the nature of the arguments has become complicated by excess verbiage and legal flanking obscuring for most of us the basic concept.

This additional argument comes in to points.  First, let us look at the definition of the word commerce.  In reviewing the many variations of the definitions available there are some basic common elements throughout.  They combine into the following.

com·merce
(komerse)
NOUN:

  1. The buying and selling of goods, especially on a large-scale, as between cities or nations.
  2. Intellectual exchange or social interaction.

Second, we simply need to ask a very obvious question, and one that while it has been raised by the legal scholars in the various debates in one form or another, it has been lost in the myriad levels of complexity provided more, it seem, to delight the ears than to illustrate the point. 

If commerce is either the act of buying or selling something, and depending on whether or not the activity was international, with the indian tribes or among the several states it could either be regulated by either the Federal government or the states.  How is NOT buying anything then an act of commerce in the first place?  And, if it is in fact NOT commerce then the argument on who regulates the action under the commerce clause is moot.

Of course legal scholars will use tangents of the “Wickard vs. Filburn” case to argue that not buying is an action that reduces the commerce among the states and therefore in reducing the revenue is itself something that impacts commerce and therefore can be regulated.  I guess this is the kind of argument our parents made for us to eat lima beans.

As a child my parents, who were good and nurturing parents, used to make me eat lima beans.  Every time I took a mouthful of lima beans, I had to rush to the bathroom to vomit.  And of course when I came back to the dinner table, I had to have yet another mouthful of lima beans, promulgating the same response.  Their justification was they were good for you.  Of course, the loss of the rest of the contents in my stomach and the various fluids and electrolytes that went along for the ride, did not enter into the equation – lima beans are good for you, we have lima beans, ergo  you need to eat the lima beans because they are good for you!

My father, a lawyer and son of a prominent judge, I suppose was simply adapting some of the arguments from the prior court rulings justifying the extension of the federal powers under the commerce clause, when he said, “There are people in other lands who are starving and it would be a sin for you not to eat those lima beans while they starve.”  He must have chosen this argument because it is so similar in the base points made in the historic extensions of federal power under the commerce clause.

In “Wickard vs Filburn,” the court ruled that poor old Roscoe Filburn’s wheat had to be destroyed because he grew more than the law, at the time allowed, even though he was using it on his own farm to feed his animals.  In the case against Roscoe, it was deemed against the law because his flagrant activities of wanting to feed his animals this ill grown wheat, reduced the grain he would have had to purchase from other states if he had not committed the heinous act of growing it himself.  Of course the fact that he likely would have bartered with the farmer down the road in his same state and that Roscoe, during the depression, likely did not have any cash to pay for the wheat in the first place was not relevant.  Roscoe, was not buying wheat from other states and as a result he was affecting interstate commerce and therefore the Federal government had the right under the commerce clause to regulate him so his wheat had to go.  Now Roscoe, eat those lima beans because they are good for you!

We have a strong habit in this country to stretch quite far to make the points we want to make.  We will obscure, misdirect, abstract and extend, often by many more than the “Six Degrees of Kevin Bacon,” in order to get the result that we want.  In doing this, either in the desire to accomplish an end we know people otherwise would not support or to appear brilliant by the use of flowery language and abstract argument, we often forget the simple and common sense argument.  The one we can all understand.  The one that actually stands up to quick and continued scrutiny.

Throughout these articles I have not wanted to argue whether or not we as a nation should require all to purchase insurance.  There are very good arguments both for and against this practice.  I simply am saying making these further and further abstract arguments, whether by legislative action, or judicial injection is not the way to achieve it.  In the end we spend billions of dollars arguing points that any person working in the fields or factories would screw up their faces and say, “What?”    If you related the “Wickard vs Filburn” issues to anyone working for a living they would have a simple answer.

In the end it is not hard to subvert intentions.  In the case of our current political motivations regarding the Affordable Care Act , so called Obamacare, we see exactly the extent that politicians and governments will go to get the outcome they want.  It takes years of very expensive education and hundreds of millions, if not billions of dollars, to arrive at the decisions that have been rendered based on the various political governmental and abstract interpretations of the commerce clause!  Only we can ultimately stop this and force those we elect to find the simple and most pragmatic answers.

Semantics: Its just not for politicians anymore.

America Circling the Drain

America CTD?

Word games – we all love to play them. On occasion it is fun to pit ones intelligence against another and use words to obscure what we are saying or twist another’s words into something they clearly would never have said. But, has an intellectual challenge for some, become a threat to our national existence?

 we have lost connection with the little engine that for over two centuries made us, that little engine that could…

It seems the word games we all learned to play as children have become the weapons of war on ourselves, wrought by others for their own gain and power. The diatribe that is now offered as debate in all phases and venues of our public discourse – from the popular media to the halls of our congress (once the proud battlement of high ideals and lofty goals) has become a bitter, petty and self-serving process. Its practitioners now use language to obfuscate, confuse, deflect, disguise, denigrate, excoriate, and disrupt anyone and anything, usually in pursuit of goals that no clear majority would support.

As a result of this semantic game, we have lost connection with the little engine that for over two centuries made us, that little engine that could. By using words to cloak and obscure the faults in our economic systems, created by years of short-sighted decisions and weak temporary corrections, the economic crisis some have long predicted appears to be on our door step at last. But unlike 70 years ago, the “our” is no longer the American “our.” It is now most of the world’s “our!”

 A reader commented – without the government subsidizing this purchase, regardless of the long-term economic sense of the investment, the industry would not exist…

In 2007, Ellen Hodson Brown, J.D. published a book titled, “Web of Debt.” In it she chronicles the rise of the fractional reserve banking systems, how this historical standard architecture was flawed, and how we could expect to see evidence of its predictable mathematical failure. This book is a very good read, whether or not you are an economist or even mathematically inclined. It will get you thinking, and whether you agree with Ms. Brown’s conclusions or not, she will help you see some things you have yet to see about one of the main processes that provide us our modern existence.

Recently, in a brief post I wrote relating to a local news article on the purchasing of solar panels for Yosemite National Park, a reader responded with the comment that I was failing to see the whole picture. He stated that, without the government subsidizing this purchase, regardless of the long-term economic sense of the investment, the industry would not exist as no one would be able to afford the products and therefore we would not get the benefits from them or have these options for future generations.

This got “me-to-thinkin’” as they used to say where I grew up. Is it possible that, what I see as desperately flawed logic could make some sense? Even though many of my recent posts appear to be more based on our economy, what I am most focused on is our health care system, or lack of a system to be more precise.

As I researched my upcoming book, “The History and Evolution of Health Care in America: The untold backstory of where we’ve been, where we are, and why health care needs more reform,” I learned that many of the drivers of our currently unsustainable health care system have their roots in; semantic based obfuscations, bad economic policy decisions of the past and the political fostering of the entitlement philosophy we have today.

In the area of health care, and retirement, we are now of the mind that these are our due. We believe we should be able to receive any care we want, at any time that we want, and if we can’t afford it then the government, i.e. everyone else, owes this to us. And just between you and me – we never really can afford it, can we? I mean, with all the modern conveniences we also want; like the large flat panel, and the vacation every year, and the new car, and the second home, and for all of our kids to go to college and become doctors and lawyers; I mean it’s not right to expect us to not have these things in order to pay for retirement or health care later now is it?

…have the government subsidize the cost of the product so we can buy it. Now, in a vacuum this logic can make some sense…

Thinkin’ more on this, I also came to the belief that another flaw of this logic is the base economics of the decision itself. To recap, we can’t build the product at a price that people are willing, or able to pay. Therefore, we need to have the government subsidize the cost of the product so we can buy it. Now, in a vacuum this logic can make some sense. If the consequence of these decisions was not exclusionary to other things we need then, assuming we all agreed, taking some money from each of us to pay the cost of a non-sustaining industry with the hope that it would become sustaining, may be something we would choose to do. But we are not in a vacuum. Every decision we make in our economy to subsidize one industry is taking monies we need for other things-like health care and retirement.

The larger problem today, is that we have inflated our domestic costs so much already, in this new world economy, few, if any, of the things we build here in the U.S. are cost-effective. Solar is yet another great example. Comparing the cost of U.S. designed and built solar panels with those made in China shows a stark reality. We are in the long run subsidizing a business we will never gain from. This is exactly what we have been doing for the last 75 years. First Japan, then China, next Indochina, now India, we have subjugated ourselves to being pioneers in technology, and letting the rest of the word dominate by base production. Their base production margins dwarf our pioneering margins. In this new world economy, we are now in competition to all others. Throughout the past 75 years we have either lost, or purposely abandoned, many of the market segments that gave rise to our industrial and economic power.

So in our semantic fed delusion, first, let’s tax, or fine, some group, who we can use semantics to argue has more than us and if possible demonize how they got it from us unfairly in the first place. Next, since, according to the semantic, they abused us in some way to get it, the government needs to subsidize it because a different, and semantically disadvantaged, abused, and often relatively small group wants it be paid for, at least in part so they can have it. One other key to this semantic process of entitlement is this group must be, or have a semantic appeal to another group, large enough to represent a significant voting bloc.

Now, just like the Yosemite solar panels someone, actually all of us, must pay for them. Some say, “We all pay for them!” Others say, “Oh no! We will make the ‘Rich’ pay for them!” This brings up other faults in this tortured logic tree. Whether it is taxes, fines or fees, the additional costs reduce profits, increasing prices, decreasing discretionary spending, lowering domestic sales, increasing relative costs, lowing profits, driving down wages, and shifting higher margin to other countries production. This very observable and familiar Zero Sum Game process now requires more subsidies. This progression is referred to by a very technical term (CTD) “Circling the Drain.” If you have any difficulty grasping this problem, you can go back to the beginning of the paragraph and repeat, reading until it becomes clear. For some this clarity happens just after they hear the big flushing sound! Woooooooooooossssssshhhhhh!

As I thought more about this issue, I realized if Ellen Brown is correct, and I suspect she is, continuing to apply this logic is not only dangerous, it is fatal economically. Normally, when a government prints new money, it is not inflationary, but stimulative, as historically this new currency is offset by real work product with real value that has a lingering effect in our domestic economy.

I just wonder if this new world economy, combined with our current lack of competitive margin based productivity, exacerbated by the governments current practice of allocating new currency to be created for non-value based activities like paying interest, or for goods and services where the bulk of the effect of the capital is being transferred to those countries manufacturing the goods. These are the same countries where the components or primary materials yield high margins due to their significantly lower costs.

I am starting to wonder if this process is causing that WOOOSSSSSSHHHH’ing sound I am hearing? Or maybe it’s just the semantic wind, whistling though the solar panels.

If you are starting to find the overall situation increasingly frustrating and perhaps scary come check out http://www.mugwump.co (yes that’s CO not COM)

Be A Mugwump Site is Live

Ever since I read Mark Twain’s Autobiography, I have come to realize that the form of political activism he and others of his time practiced is needed now more than ever.  Nothing is a better indicator of that need than the actions of congress in the past two years on both sides of the aisle.

I have yet to speak to anyone, in any are of the political bell curve who is not disgusted, and even more concerned with what is transpiring.

I invite you all to come take a look at the site and if you find your frustrations and views in line with mine – please join. You can choose to join and not have your name listed (you will still receive updates from time to time on interesting articles related to true political independence) . What I am hoping is you will list your name and we can build a groundswell.

This is not a political party, and it is not driven by one candidate or ideology. Find out more and come visit the site: http://www.mugwump.co(yes that is CO not COM. Someone has the dot-com name already but does not appear to be using it. Maybe one day I can get that and make it easier.

I hope to see you there soon.

A Zero Sum Game: When will you actually get it?

We have all become inundated with a daily dose of how unfair the world is to all of us. Thanks to the media in general, and the partisan public relations engines of both parties, it seems we have nothing to worry about regarding our future, other than getting what we want by taking what others have. Or for a select few – and you know who you are – having others take what we have worked so hard to earn.

Oh yeah, some of you didn’t really earn it did you? You got it from your parents, didn’t you? And of course your parents didn’t really earn it either, they took it from the masses. They had the audacity many years, or generations ago, to start a business and be successful. And of course they were successful because people, mostly middle-class people no doubt – the robber barons always sell their insidious goods to the middle class don’t they?

Yes they made their widgets and sold them to the people. And at first it all went well and everyone was happy. The businessmen (robber-barons) made the things we want in the U.S. and we paid them for them and then IT happened…

We found out just how much money you were making, even though each of us only paid a small amount – and at the time that small amount seemed ok. But you committed a heinous crime. You got successful. Not just successful – too successful. You made too much money and you moved up town… How could you?

Then as we complained to our congress people about how you were simply robbing us all, they stepped in and enacted, rules, and laws and taxes to make it fair. So we could get some of our money back in our pockets by redistribution.

And then you made it worse! As your profits went down you didn’t hire as much, in fact you laid off some of us. And then when we bought less because some were out of work you raised prices. Then we could not afford to buy your products as often and your sales dropped and you laid off some of us people.

The Chinese saw your success and your rising costs and they started to build the same product you did. We bought theirs because it was cheaper, and also to teach you a lesson. Soon, you on your own decided if you didn’t find cheaper workers you would be out of business. So you moved your factory to Mexico, or Singapore or China. How could you?

So, we asked our congress-people to fix this again, and they slapped on import duties. Yea, that will show them – and you… But, you both just raised the retail price and we ended up paying more for the same thing. Yea, our wages were not going up as fast as the prices but we had some tricks up our sleeves yet.

Since you and the other businessmen (robber barons) were now hiring cheaper and cheaper workers, we formed unions and made you pay us more and give us more stuff just to work for you. If you didn’t unionize, we got congress to increase the minimum wage and legislate some of the great free things you need to give us just cause we work for you – again we showed you. Now again, you had to pay us what we wanted if you hired any of us. Sure, you could no longer sell much of your product to the rest of the world cause it was too expensive and the quality was no longer any good because we don’t really have to meet any standards for you to pay us, but you were sharing your prosperity with us weren’t you? It’s only fair!

Of course, you again raised your prices to cover these new costs and you complained that you were no longer competitive and foreign products were taking the market and your company could not export anything either because of price and quality. Look, when we saw that what you said was true we stood up to help didn’t we? We are not uncaring after all! We came to your rescue and we asked congress to give you some tax breaks and subsidize our purchase of your products.

I know what you’re going to say! Sure, all of our taxes went up to pay for the cost of the programs to give the tax breaks and subsidies – but look even you understand the money has to come from somewhere. And rightly so, most of it came our of your share. That’s why you raised your prices again isn’t it? When will you learn, Mr. Robber Baron, that you can’t fool us! Yea, you say you’re not making any money, but we don’t believe you! You live uptown. You made a lot of money. We see your cars, your yachts, your corporate jets… So what if we are only paying a few cents profit for your product when we buy it, you sell a lot of it to us don’t you. Look you owe us! Without us you would not exist. What do you take us for, common workers? We don’t do common labor – don’t you get it! We are Americans, not some third-worlders. We don’t work cheap buddy. It’s about time you figured that out. And don’t try to hire those illegal immigrants either. We won’t let you exploit them like you used to exploit us!

So you better get a clue. It is not important if you can produce a product cheap enough so we can afford to buy it. We don’t need your product. We can buy the one from India, or Sulawesi. America is the import master of the world don’t you see? Why do you think we have such a huge trade deficit – we have bought over $11 trillion more in goods than we sold since 1972 – only American’s can do something like that bub!

You know we don’t need your kind in America – I mean you manufacturers, and oil producers, and steel companies, and commercial fishers, and lumber companies, farmers, and miners, and others like you. You are not nice to the environment, you harm animals, you exploit workers, you make noise, and you don’t create the kind of jobs we deserve. We went to college you know. We deserve high paying non-labor jobs anyway. We buy all that stuff from other countries anyway. Let their people not go to college and do that hard messy and dangerous work.

You know, it doesn’t matter anyway. When we want more, we will just increase regulations, increase taxes – on you, and get our legislators to increase what the government owes us, and what you have to pay for, or give to us – that is if If we debase ourselves enough to actually work for you. Yea sure, you can try to increase the prices but you know what we will do about that – now don’t you?