Tuesday, November 9, 2010

Sarah Palin On Inflation - Umm, Actually The Opposite Is True

The UK Guardian reported this yesterday:

Palin [declared] that she was "deeply concerned" and would call on the US Federal Reserve chairman, Ben Bernanke, to "cease and desist" buying up government debt.

"If it doesn't work, what do we do then? Print even more money? What's the end-game here? Where will all this money printing on an unprecedented scale take us? ... All this pump-priming will come at a serious price," Palin will say, according to snippets of the speech obtained by National Review. 

"Everyone who ever goes out shopping for groceries knows that prices have risen significantly over the past year or so. Pump-priming would push them even higher," Palin adds, putting a populist slant on monetary policy. 

Her remarks place her firmly, if awkwardly, in company with an international chorus of critics opposed to a US policy that many fear is not only designed to ward off deflation but to drive down the value of the dollar and of US debt.

In reality, in all of 2009, inflation was MINUS 0.4%. Prices DEFLATED. So, last year, if you were paying "significantly" more across a broad spectrum of purchases, you were getting rooked.

And thus far in the 10 months of statistics available for 2010, inflation is running at about 1.6% on an annualized basis.

Furthermore, inflation has NOT gone above 4% per year since 1991. That's almost 20 years of very low inflation.

One can see that the Tea Partiers and their accomplices in the Republican Party are still trading on fear.

In their ignorance of all things great and small, the beastie boys and girls have yet to discover that at this moment it is DEFLATION that is the danger to the national and world economies. A bit more inflation would actually help us.

Where are the Democrats who should be calling this gang of political hoods out on this hooey?

Monday, November 8, 2010

Why Can't Obama Get Mad?

I'm as in favor of "cool" as the next guy. I also like a good snide remark, a nuanced response, a snippy reply. But a little controlled anger can be an excellent political tool as well.

Being the battler-in-chief presiding over a nasty, ugly sport - politics - a sort of Beyond The Thunderdome played in business suits - does not confer on the President the right to persist in rising above the messy fray obsessively, pathologically. We want a leader, not a powder puff.

Mr. Obama wears white gloves when he needs to be wearing work gloves.

Or better yet, boxing gloves.

Obama clings to cool.

One suspects at first that he is reluctant drop the smoothness because he just really, really likes his ultra cool, jazz world sang-froid. We suspect him of a form of narcissism.

Or one can ascribe it to his upbringing in Hawaii, one of the epicenters of laid back behavior. (Honk your horn aggressively there and they're ready to call the men in the white coats. Jaywalk and citizens go into convulsions - politely, of course.)

Perhaps we suspect Obama's inner coil because, in his rise to the political heap, he didn't have to scrap for decades like a Nixon, fight a world war like Ike, endure speculation about his intellectual worth like Truman, nor overcome a devastating disease like FDR. Regardless, his is a hard soul to plumb.

This is not to say that Obama hasn't had obstacles to surmount. Lord knows that becoming the first black president is an accomplishment that took enormous effort and considerable elan. Overcoming the perverse reactions to the color of one's skin, poverty, and feelings of being an outsider are nothing to sneeze at.

Which brings us to the Angry Black Man of mythology and history, for I believe it is that burden that prevents Obama from lambasting his relentless, unscrupulous attackers.

The rage of Malcom X, the glorious in-your-face attitude of Muhammed Ali, the raised fists at the 1968 Olympics in Mexico City seem relics of another day. 

The 1960s were an angry time - far angrier than today - when war atrocities came with your bacon and eggs, when we regularly saw dogs and hoses turned on our fellow citizens, when women were regularly put down without a whiff of ramification, when an adolescent boy could catch a beating for having long hair, when children were treated as chattel, and the leaden hangover from World War II imbued society with a relentless conformity.

It was those social norms that led to rioting, massive demonstrations, bombings, and a left-right polarization the likes of which those under 45 can scarcely fathom.

Woven throughout this rebellion was the Anger of the Black Man. It was, and is, inescapable - unless you are President Obama, who seems intent on not indulging himself in this anger, on not using it to gain noble political ends.

He is terribly, terribly wrong to avoid doing so.

The caricaturing of him as everything from a monkey to a watermelon farmer to Adolph Hitler to Stalin should have been enough.

The attacks on everything from his birthplace to his clothing to his wife and girls to his "Muslim background" should have been enough.

The mindless attacks on his relatively mild policies should have been enough.

We are reminded of the righteous anger of FDR after Pearl Harbor. We are reminded of the battle cry that partisans shouted to Truman - "Give 'em hell, Harry!" Of Reagan's battle-horn blaring - "Tear down this wall." We are reminded of JFK's first inaugural address suffused with controlled anger - "Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of liberty." (A word of warning to the truculent Soviets.)

Mr. Obama: you must be willing to pay any price, bear any burden, even if it means flirting with the stereotype of the Angry Black Man.

You must find it in your belly to rise up and strike down the radical right wing harshly, filled with piss and vinegar, with blood and guts. The left, and I believe the center and perhaps even the center right, aches to hear you fight back using righteous controlled anger. We all want you to succeed.

Other presidents - all white, obviously - have loosed their anger to work for them and the country. You need to find the meaningful core of your own anger and outrage - we know it's there, you're human after all - and express it full-throated and powerfully against the enemies of progress.

Friday, November 5, 2010

What The Swing Really Means

For the last two years, the right wing never acknowledged that the Democrats had won a series of truly resounding victories in Congressional and Senatorial elections, a creeping tide that crested in 2008. Indeed, the right seemed to repudiate fair and square elections using terms like "ramrodding" and "oppressive majority" to describe the Democratic uber majority's enacting of historical legislation.

Now, of course, the Republicans want everyone to acknowledge their own resounding victory this past Tuesday. But face it folks, a majority of 5 in the House, given how polarized the country is, would have been as good as the bloated one handed to the right wing. Having a 20 seat majority is meaningless in terms of putting the country - and world - on a firm economic growth trajectory.

The right wing seems to have immediately forgotten that they are in the minority in the Senate and do not occupy the White House. The House still has to reckon with the Senate and the veto power of the President, should the Senate falter in fear.

Leaving aside that logistical problem, the Republicans cannot rise to the occasion because their DNA will prohibit them from doing so.

This is my hunch. Given the ideological nature of both the Republican leadership and rank and file, I believe they will not be able to address the joblessness/growth problem, because, once facts are faced, the economic philosophy that needs to be utilized is a Keynesean model and not the tired supply side economics of Milton Friedman. The Keynesean approach was used, albeit timidly, during the short "summer" when Democrats owned the whole farm. But really, where $3 trillion in stimulus was needed, less than $500 billion was tossed into the hopper.

Let's say that all the current Republican proposals that are in the wind are enacted. Let the Bush tax cuts stand as they are today. Allow the health care reform to go unfunded or underfunded. (A Constitutional crisis in the making.) Cut out all earmark spending. (It accounts for between 1 and 2% of all Federal spending.) Trim entitlements or growth of entitlements by 10%. Even trimming the sacrosanct defense budget by 10% would only account for $80 billion per year.

[A further aside on earmarks: since 2006, while Democrats have controlled Congress, earmark expenditures have fallen by 40%. That is down off the high of $29.5 billion under the Republicans of the previous Congress. Do the math. Let's say we cut out ALL of the remaining $18 billion in earmarks. Over ten years that would equal $180 billion to be put against a debt of $12 trillion or thereabouts. Keep in mind that many earmarks - while often portrayed as a part of a tale told by an idiot, full of sound and fury, signifying nothing - are directed to positive, necessary projects like safer drinking water systems, school construction, and rail and road improvements. Many earmarks are also part of the defense budget structure.]

It is clear that we cannot budget cut our way out of the Great Recession. This is neither ideological nor pedantic. Cutting roughly $250 billion per year from the budget would return less than the stimulus plan and it is a proven axiom that budget cuts, especially in times of recession, have about a $1.03 return on the dollar. Infrastructure spending, by contrast, returns over $1.60 on the dollar.

This is why a move like New Jersey Governor Christie's shut down of the second rail tunnel to Manhattan will prove to be so deleterious to the economy. 6,000 highly-skilled construction jobs were immediately lost. All of the service and maintenance jobs that would have been created because of the increased rail traffic are now lost. A further 70,000 jobs will not be created in all the various economic sectors in which New York and New Jersey have so long partnered: finance, tourism, retail, law, advertising. New Jersey's roads, already the most crowded in the country, will witness even more gridlock, wasted gasoline, increased pollution, and wasted time by the 45,000 commuters who would have availed themselves of the easier travel. On top of this, New Jersey will have to pay back $315 million already spent on the project.

Contrast this, as I have done before on this blog, with the building of the Erie Canal in the second and third decades of the 19th century. It was built entirely by the State of New York through public financing. In today's dollars, the canal would cost $125 billion. Christie's tunnel to nowhere would have cost about $10 billion. Just a quick reflection on that contrast reminds us of why we hold the early founders of prosperity in such high esteem. They had vision and guts.Christie has the gut part down, anyway.

We can be the world's leader in alternative energy products and generation. We can be the world's leader in high speed Internet access. We can be the world's leader in rail transportation of both goods and people. We can be the leader in clean automobiles and smart automobiles that practically drive themselves. We can be the world's leader in many, many fields, some that haven't even been imagined yet.

But, like the building of the Interstate Highway System over the past 60 years, it will take government leadership and business's willing participation.

Republicans have no plan to be the leaders of anything, except in keeping the struggling down, sending the super rich to even higher wealth accumulation levels, and ruining the American future.

While we need to acknowledge that Democrats have scarcely been better during the current crisis, we need to understand that at least the leftist, Keynesean economic model is the one that has far greater potential to take us into a better tomorrow. Plant the seeds now, reap the benefits later.

Wednesday, November 3, 2010

Why The Democrats Took A Beating And What Can Be Done Starting Today

For Democrats of every stripe, from dedicated left-wingers to Blue Dogs who cozy up on the Republican right wing lap, it is clearly time to reappraise. The awkward phase.

To understand ourselves right now we need to look at the first false steps taken after we captured the House, Senate and Presidency by comfortable margins.

Surprisingly, I do not want to speak of which legislative opportunity slipped away, which job creation program worked or did not, whether TARP was a good idea, the compromises with the greedy devils of Wall Street, or which budget would have been better or worse.

I want to talk about what George Bush (I) described as "The Vision Thing."

We, the Democrats, had no over-arching vision beyond winning the 2008 election. None. Zero. We won because we could.

Can anyone reading this, young or old, retired or just beginning his or her life or somewhere in between, envision America in 2050?

Envision it in the way the dreamers of The Declaration of Independence did for their time, Lincoln for his, Theodore Roosevelt and Woodrow Wilson for theirs?

Franklin Roosevelt said in his first inaugural speech, outlining the powers that had to be harnessed to end the Depression: "It is... the old and permanently important manifestation of the American spirit of the pioneer."

John F. Kennedy's visionary rhetoric is part of the national mythology. And, like his policies or not, so is the rhetoric of Ronald Reagan.

Curiously, President Obama, the candidate with the most soaring campaign rhetoric, gave us bones to pick on once he was elected.

While there is pencil-sharpening to be done, none of us should allow America to be turned into a nation of accountants, watching pennies while wondering what the hell to do with the dollars, or worse, doing nothing at all with them.

There are a half dozen urgent matters that must be resolved, everything from energy to our ill-conceived wars, from transportation to education.

Democrats did not hammer one of those problems during their brief ascendancy and we can be reasonably assured that Republicans have neither the wherewithal nor the urgency to solve them, either.

I reject the idea that health care reform was anything but a middle of the road palliative that swept structural problems under the rug. 

So, what to do? What about vision?

Here is a short manifesto:

1) In order to lift up the whole nation, we have to lift up the income and security of the vast but shrinking middle class and perhaps more urgently, the upper middle class. Democrats must advance and support all efforts of unions to grow again, unions being the front line of defense against predatory practices by foreign economic interests. Unions must get to organizing white collar workers as their traditional blue collar base shrinks numerically. What the right wing has torn down, the left must build up again. Likewise, leaving aside the question of immigrants' legality and illegality, we have to stop the influx of cheap labor from undermining the aspirations of workers already in our country.

2) End the fruitless monopoly that has been given to the health care industry. It is the lack of competition that has brought us to the current pass. Legal monopoly in such a key sector is damaging to our country. If the market had been free, or almost free, we never would have gotten into the health care rhubarb in the first place. More insurance providers, more doctors, more hospitals, more primary care clinics. Stimulate and de-regulate. (The latter not something you hear often from the left.)

3) Choose a handful of regions in the country - one East or West Coast, one in the South (ideally New Orleans), and one in the upper Midwest - and make them the showcases for tomorrow's energy,  environmental and transportation technologies. Not only those things that we already know, but the things that are still on the drawing board, in the imaginations of our best innovators. Make those regions something like uber World's Fairs that stretch for hundreds of miles. Call together the leaders of industries of today and tomorrow to the White House - not the money-changers but the money-makers - and get a plan together.

4) Create high speed wireless Internet connections for every single inch of the country. Just as electricity, the telephone and television have become universally accessible, the wireless Internet is a crucial key to tomorrow's economy.

5) Bring all the troops home from Iraq and Afghanistan within 6 months, the consequences be damned. End the left's pointless pacifism that brings us half measures leading to the deaths of our service people. At the same time, inform any and all countries who foster terrorism in any way that they are subject to devastating attack by air or sea. We should not be losing our young (and not so young) people to the violence of mindless barbarians. We have spent trillions in technologies that lay idle as we worry about alienating countries with whom there is no diplomatic future. They are nihilists and need to be dealt with accordingly. Make the problem of terrorism their problem.

6) Cut the defense budget in half. 

7) Create a new Peace Corps with our best partners - Britain, France, Germany, Italy, Japan, Australia, Brazil and Chile - and in conjunction with pivotal countries in different regions - Indonesia, South Africa, Uganda, Egypt, Vietnam, Argentina - that will show the face of modernism and aspiring modernism to backward countries.

8) Engage India. Engage India. Engage India. Multicultural, English-speaking, democratic, forward-looking, a counterweight to China... where is our common sense here? Why continue to choose Pakistan as our lynch-pin ally in the region?

9) This may sound a tad off beat and Utopian at a time like this but - we need to reemphasize the liberal arts on all levels of education. The quantification of education has been an unmitigated disaster for the country. We have to buy out of the notion that, for instance, turning out more engineers like flapjacks is a great idea while our culture becomes debased, less literate, and more utilitarian.

10) Stay focused on imagining what tomorrow looks, feels, and sounds like. 

We know that the right is tight, is scared and runs on fear. The only antidote is vision, clarity and hope.