Expand Medicare, stop bailouts, reinstate draft, support science, admit that to be gay is genetic…

May 18, 2009

Some more public policy suggestions from Tony Walther’s Weblog:

HEALTH CARE:

Expend a lot fewer resources and energy on the subject. Simply expand Medicare by extending it to those who cannot afford or are not eligible for private insurance, regardless of age. There of course would have to be a strict means test for this. And I don’t mean to suggest that it would be inexpensive to do this, but it might be no more or even less expensive and more practical than what we are doing now or what is being proposed (which is not clear at all). And it could be all done so much quicker (how long has congress faced the health care issue? Decades now).

It occurs to me that health care could be seen as a personal right in our modern society, but it might also be seen as a personal responsibility at the same time. I don’t think those two conditions are mutually exclusive. While it is a personal responsibility, if you cannot afford that responsibility, you need help.

And I realize we read that both the Medicare and Social Security trust funds are fast running out. But something will have to be done about that. I doubt that either program will be cancelled, so our elected representatives will have to, dare I say it, make some decisions and the electorate itself has to accept certain priorities. But it would seem that a secure and stable retirement system and some form of universal health care (I refer to a system in which no one is denied health care simply on the basis of cost) would be at least near the top of those priorities. 

ECONOMIC STIMULUS:

Give business back to business for the most part. Stop all bailouts. Let failing enterprises, banks included, go bankrupt. But at the same time offer incentives, such as tax breaks, to businesses that create American jobs (and these need to be jobs that don’t require further government subsidy to workers – such as the old Walmart approach of handing out how-to-get-government-assistance flyers to employees). At the same time apply penalties to businesses that ship jobs overseas, such as high tariffs on products being imported back in. And I was going to write simply, enact penalties for outsourcing (maybe a penalty tax on outsourcing). But I don’t know how practical or practicable that would be. But if there is enough incentive for hiring American, then maybe that would not be necessary.

Our government should encourage a return to the production of manufactured goods and consumer products, again through incentives such as tax breaks.

Also, renegotiate our so-called “free trade” agreements with other nations so that we are all playing on a fairly level field. Other nations subsidize industries and/or have labor forces that work at extremely low wages. We need “fair trade”, not so much “free trade”.

Instead of bailing out failing businesses, divert some of that funding to help displaced workers, but do not make this commitment open ended. The ultimate goal for able-bodied people should be new jobs.

DEFENSE:

Make our policy one of defense rather than offense. While I don’t think the United States, even under George W. Bush, has been an imperialist nation, we have long held the belief that we have to exert our influence all over the world. I think we should promote our form of democratic government by example more than by force. We should be supportive to the extent we can of nations who would model themselves after us, but leave it at that.

I do, though, realize that in some situations we may find that the best defense is a good offense. This would be in cases of true emergency when it comes to our attention that, say, a rogue nation or rogue regime in a nation might come within grasp of having the means along with the aim of destroying us. Strangely, that last sentence sounds like Bush 2’s rationale for going into Iraq. So, if he and Cheney had been honest about such, that is if Iraq would have really been in the position to attack us or supply weapons of mass destruction to our enemies, I might have seen the Iraq invasion as the necessary choice (although a more surgical choice might have been wiser). But the information that has come out points the other way (and some of this info was at least hinted at even before we went into Iraq). I believe Bush and Co. have even admitted they were wrong (if not that they knew they were wrong at the time). They had a predilection, that is they were predisposed to go into Iraq and then they manufactured an excuse.

Iran’s (reported) continued development of nuclear weapons capability might someday require an offensive, pre-emptive reaction, and perhaps more urgenty, the possibility of Islamic militants getting hold of Pakistan’s nuclear arsenal. But let’s hope none of that becomes necessary. But let’s also hope no potential adversary doubts our resolve to defend ourselves.

MILITARY SERVICE:

I think the all-volunteer professional military has big advantages and that we should maintain a large and highly-trained and motivated professional cadre, or really a permanent professional force that would be larger than the word cadre connotes. But along with that professional force I would be supportive of a mandatory military service of youth, beginning at age 18. Two years of active duty would seem appropriate, if a little bit arbitrary. There of course would probably be provision for conscientious objectors with some type of compulsory public service. I think with a new military draft or compulsory service you would find that we would be a lot more thoughtful and careful about using military force. We might also have more resolve once we did commit force. And why is it not everyone’s duty to defend the nation?

My reading of recent history is that the so-called neo conservative movement was disappointed with the nation’s lack of resolve in Vietnam and thought it endangered us by making us look weak. The liberals who had pushed for ending the draft got caught in their own trap. The neocons decided that the all-volunteer force would leave so many off the hook that it would be easier to commit forces where they desired. And I think it did make it easier.

But it seems to me we are all in this or should be all in this together. Not everyone serves on the local police force and that is understandable. But too many have come to view the military as a police force that they can simply expect to “handle it”. When only a minority is left with the responsibility to protect a nation I think we lose our sense of nation and one day might be in jeopardy of losing the nation itself.

 ENVIRONMENT:

We need strong public investment in science more than anything else. And it is the government’s job to protect the environment and to enact laws that support that. Environmental regulation needs to be based on science and not politics. We cannot afford to cut off our nose to spite our face by enacting unreasonable and over-reactive environmental regulations that stifle commerce, but at the same time we do not want to destroy our planet or our quality of life.

THE MORAL QUESTIONS:

Societies have rules, often called “morals”. The United States has been unique in that we are a blended society whose members may have similar, but not necessarily the same moral code. We are not all of the same religion and we are indeed not all religious, although for the most part our laws regulating social behavior are I suppose based on Judeo-Christian principles.

For the most part there is not a problem. We virtually all agree, for example, that it should be illegal to murder someone. We don’t all agree on the proper punishment, though. There has been a continuing debate over capital punishment. I think I am correct in saying that the anti-capital punishment forces seem to be holding the edge on this one. I have my own opinion, but I think this has to be left to voters and legislatures, and to some extent the courts (who seem to be frequently confronted as to the question of the constitutional prohibition of cruel and unusual punishment – you can execute someone as long as it is not cruel? Unusual?).

Abortion and gay (or homosexual) marriage seem to be the hot moral topics now.

As to these two subjects, I have to ask whether there is a rightful governmental interest.

Abortion is a far more complicated topic than those on both sides of the argument make it out to be. But under current law, based on the Roe Vs. Wade decision, the Supreme Court has held that the intent of the constitution was to in the name of individual liberty leave such a personal decision up to the individual. The justices at the time had to reach for that decision by finding it based in part on what was not explicit but what they felt nonetheless was implicit in the constitution. But that is really often the case with decisions in courts. If literal meaning was always evident we probably would not need justices to render decisions (think about it).

As to gay marriage, the only government interest is that marriage is a contract and the government has oversight of contract law. As to the religious aspects, the government has no rightful role. It’s all more a problem of terminology and context and tradition. We have simply called these government-sanctioned contracts between, yes, what have been traditionally men and women, “marriage”. We might have been better off to call all of them “civil unions” from the beginning. Some religious people object to gays forming unions with each other and calling them “marriage”. They have been willing to compromise by accepting “civil unions” for gays. But civil unions are not always equal to marriage and not equally recognized within the 50 states. And if you legislate that only heterosexuals can have “marriages” and homosexuals must have “civil unions”, even if those civil unions were supposedly made equal to marriage, I think you would have something equivalent to the “separate, but equal” doctrine that was used to justify Jim Crow laws that forced black people to be discriminated against. Separate but equal was originally recognized by the Supreme Court, but decades later was struck down by the high court.

Those who oppose gay marriage argue that homosexuality is anti-social behavior. Most everyone else has come to realize by simple observation that homosexuality is apparently genetic and has come to accept it even if they are not always comfortable with it.

One solution would be to take the government out of the marriage business and have it issue civil union contracts to all, straight and gay. The churches could handle marriages as a religious and symbolic ceremony. That seems an equitable approach to me, but might be socially confusing (how would we refer to a couple now joined? they’re married, no they’re “civil unioned”, and how would you refer to already married people under the old rule, and it’s a whole can of worms).

As to the implications on our society moving forward if we fully accept the gay lifestyle under the law by granting gay marriage or unions, I actually think there is a question, but I do not think it is one government can resolve.

One of the problems is that government itself may have lost some of its moral authority.

Just some ideas.


Right and left seem to have conspired, perhaps unwittingly, in economic collapse…

May 9, 2009

By this time I’ve forgotten what the big bank bailouts were all about or at least how they were supposed to operate.

I know I did hear along the way the canard that banks were forced to take government money and the strings that went along with it. Maybe I have it wrong, but I don’t think anyone was actually forced to do so. In mid October, when Bush Jr. was still president, then U.S. Treasury Secretary Henry Paulson and other government officials sat down with some high level bankers and told them this is the way we are going to do this, and they were ASKED to sign on the dotted line. They all did.

(My source: http://online.wsj.com/article/SB122402486344034247.html )

But had any of the participants not wanted to play that game, certainly they could have just said, thanks, but no thanks, we’re good.

They were not good, though, and they knew it. The bankers were facing bankruptcy, and had men still worn hats, they would have been literally hat in hand, but they were figuratively hat in hand. So they signed.

My own opinion is that it should have never come to that. The big banks should have been allowed (forced) to go insolvent. Bankruptcy and/or the federal banking rules (as you can tell, I am not versed in these subjects, but who is?) would then take over. Probably not a pretty picture, but is it a pretty picture now? And have we not been forced to throw billions of public dollars at these institutions? And has not the government had to borrow billions from China? And will not the taxpayers who fund all of this simply have to end up paying interest to borrow their own money back?

And yet, the banks are still calling the shots. The Wall Street Journal reports (I get this indirectly off of a journal report carried on Yahoo online) that in the recent so-called stress tests for the big banks the government bent to the demands of the bankers and toned down their capital requirements, even though the bankers still think they are being unfairly treated. And now I forgot what the penalty is for not having enough capital. The big banks are “too big to fail” the government has already told us, so I guess we would just have to borrow more money to give them so that they can eventually loan us the money back at interest.

People that really understand banking probably won’t be reading this blog, and by chance if any readers who do understand it all read it they might laugh at my naivete. But I challenge them to think hard and then answer that if in reality I have not pretty well summed it up, albeit in oversimplified terms.

Where were the conservatives we hear so much about when they should have been railing against all of this? Well, yes, I know that many of them complained, but their complaints were too full of talk on side issues such as gay marriage, co called “pro-life” (anti-abortion), family values, when their message should have been a well thought out and reasonable and sober assessment of every-day economics and the basics of capitalism and free enterprise.

I think many of the conservative voices were spooked by the idea that the whole economic system could have indeed come crashing down and that all of the king’s horses and all the king’s men would not have been able to put Humpty Dumpty (the economy) back together again.

The Republican presidential candidate tried in vain to appease the conservative element of his party, but perhaps as a campaign ploy to show he was “presidential” in a crisis, or perhaps out of real concern, remember? he temporarily “suspended” his campaign and rushed back to Washington to take part in the bailout – so much for conservatism.

And since the conservatives had no coherent alternative, except to vote no (a good start, but there still has to be a well articulated alternative to catch the public interest), they ceded the job of economic repair to the left-of-center crowd, which strangely enough at first was led by a faux conservative, none other than George W. Bush (to the extent that carrying water for billionaires is conservative, Bush was conservative, but that is all).

If you’ve read this far you might likely come to the conclusion this blogger thinks of himself as conservative. Not really. I stick to middle of the road. But while I support government involvement for the well being of its citizens, I am not so supportive of a government-run economy that seems too socialist in nature or of a too cozy relationship between government and business that seems almost national socialist (NAZI) in nature.

Just like left and right resemble each other at the extremes (totalitarian government), I think our current economic crisis can be to a large extent blamed on the extreme left and right who perhaps unwittingly conspired together to use government for their own ends. An example, the extreme left wanted to put every citizen in his or her own home, regardless of income. The extreme right wanted to sell them that home (with the backing of the government).


We pay to ship our jobs out of country; libertarianism might help Republicans (just a thought)…

May 8, 2009

Well isn’t this just great? Taxpayers are soaked for billions of dollars to prop up domestic automakers and now we are told (I read in the Washington Post website) that they plan to ship jobs overseas where labor costs are cheaper.

Again, as I stated in a previous post, I think that an American company that assembles its products outiside the USA ought to have to pay a stiff tariff for bringing them back into the country.

The whole idea, albeit wrong-headed idea, behind the automakers’ bailout was to save and stimulate the U.S. economy and to save American jobs.

The Obama administration has erred, I think, in bailouts for automakers and bankers.

The Soviets and the communist Chinese and the old Soviet Eastern Block countries, and don’t forget Cuba, were never successful with state-run economies. Why does the administration think it is a good idea for the U.S.?

I know. I sound like a Republican. I’m not. The Republicans don’t know what they are all about at this time. They had their chance for eight long years to protect and preserve the free-enterprise system and failed miserably.

I think the Democrats would do well to not mess so much with the free enterprise system and pay more attention to social needs, something they have done better at over the years.

Maybe George Wallace, bigot and demagogue that he was, was at least correct when he said there is not a dime’s worth of difference between Republicans and Democrats.

While government should not run private enterprise, it does need to oversee it to make sure that there is a workable framework with rules that enable all a chance to prosper.

Both the Democrats and Republicans may have run out of ideas and may have found themselves beholding to their own special interest groups and therefore hamstrung in moving forward.

A new political party could – probably won’t though – emerge from all of this.

Right now the Republicans are the most vulnerable. I see something like a libertarian kind of party emerging. True libertarians are kind of too far out there in that if they hold to their beliefs are against public police and fire departments and public parks (they prefer selling you a ticket to enjoy a private park) and any kind of social programs. On the other hand, they do believe in self-reliance and personal freedom (right to smoke pot, gay rights, as examples) and they do not believe in getting involved in wars all over the world. Seems to me if the Republican Party could move more toward a libertarian type philosophy (without supporting anarchy) it might have a chance.

And actually, I don’t see the demise of the Republican Party no matter what they do. During my lifetime I have seen the obituaries posted for both parties. The pendulum swings back and forth, tweedle dee or tweedle dum.

Except for the bailouts, so far President Obama seems to have a steady hand on things. It’s still early in his administration, though.


Over supply, under demand for cars; let businesses and banks go bankrupt…

April 2, 2009

As I take my daily walk down the street I often see cars and trucks with for sale signs on them parked along the curb or in vacant lots.

I wonder why our government has seen fit to get into the business of selling new cars (the auto bailouts and the Treasury Department guarateeing warranties off all things) when so many are shedding the ones they have, but can no longer afford.

I am not at all sure there is much of a market for new cars. We may well have an over supply already. Of course a lot of people would likely prefer to have a new car but cannot afford one now with the recession (or depression).

It seems like the market place should determine the fate of the auto business.

As to all the new incentives, such as offers by the auto companies to make your payments should you lose your job, extended warranties, and equity protection, well that is maybe a good deal, but the buyer surely pays a hefty price at the other end of the contract. It is a big insurance policy. I would say that if you expect you might be losing your job, now is not the time to be purchasing a new car. As to the warranties and equity protection, if the American manufacturers had been making superior products, they would not be necessary. Maybe the era of planned obsolescence and making the big money in parts and repairs is coming to an end, hopefully.

And don’t get me started on the repair con jobs. I went to my foreign car dealer to get my door fixed and found out the guy wanted me to sign on the dotted line to just look at the problem (minimum half hour labor) and at the same time he is telling me that they likely would not be able to fix it. I refused to sign, so he looked at it for free and told me he could not fix it. I took it to a body shop and they fixed it in five minutes for free (I had done business with them previously). I’m no mechanic, to say the least, but I was a truck driver and knew from experience that adjusting a door that won’t open and close properly is usually about a five-minute job (unless there has been major damage). What I am trying to say here is that most of us go into auto repair places and get ripped off because we have little idea of what they are doing (to us).

But even though I have a negative attitude toward the car business – oh and one more story: many years ago I haggled with a car salesman who claimed he was going to give me a super deal on my trade in that no one else was willing to give. But when I suggested that he was simply tacking more dollars on to the other end of my contract he sheepishly admitted to it.

However, back to the auto business itself: it is important and I have no doubt it will survive. I think it could have done so without government help. It might mean different people running it, but where there is a demand for a product, certainly there is a viable business opportunity. As I have written previously, one of the big mistakes of the domestic manufacturers was to not be flexible enough to meet changing demands in the market place.

….Just read a blog by a respected economist – Pulitzer Prize winning one – who said what I and so many others have suggested. The bank bailouts are not working because the bankers have been just taking the money and paying themselves. I am referring to the big banks that took the bailouts. Okay, you want a source for that. I’ll break here and look it back up. Here it is: American economist Joseph Stiglitz, interviewed by the German magazine Der Spiegel. Just Google Der Spiegel and you can get the English language version.

Treasury secretary Timothy Geithner and many others contend that simply letting the major institutions go bankrupt would have been a disaster. On the other hand, many, many economists differ, saying that bankruptcy would be the answer.

My contention would be that governments should stay out of directly funding and/or running businesses, although providing some incentives might be wise. Where governments must act is in protecting the welfare of the population on an emergency basis, and businesses should support that. To do otherwise will risk chaos, in which everyone loses.


Make your bonus, just don’t use my money…

March 27, 2009

 Does anyone agree with me on this point?

I don’t care how much in bonus money anyone makes. It is not my business – except it becomes my business if that bonus comes directly and/or is made possible by taxpayer money that funds bailouts to the companies paying the bonuses.

In addition, so many top economists contend that private enterprises no matter how big they are need to be allowed to go bankrupt. And then finally the market can take over.

And from now on out we need to make sure than no business is so big that everyone is afraid to let it fail lest the whole world goes down with it.

And for the life of me I cannot figure out why the Obama administration is dancing to the tune of the investment bankers, except they bought him (and pardon the unintentional historical slavery overtones) and he has stayed bought.

Would John McCain have been brave enough and principled enough to simply say enough is enough and failing institutions must be allowed to fail in order to preserve the rules of capitalism and to demand that reforms be enacted to return banking and business back to a tough, but honest game?

And as one pundit said on my TV news, the difference between the way it has been on Wall Street and the way it needs to be from now on out is the difference between a barroom brawl where everything gets torn apart and a prize fight where there are rules (never mind that prize fights have often been fixed – that ruins the analogy).

(Copyright 2009)


I don’t understand the bank program, but who does?

February 10, 2009

(Copyright 2009)

When I first read over the internet news stories on Treasury Secretary Timothy Geithner’s new plan to help banks I was completely dumbfounded. Too deep or dense for me – beyond my understanding.

I felt better about my own inability to understand after reading the following quote out of a Bloomberg News story: “The initial aspects of it are convoluted, and it’s still a work in progress,” said Walter “Bucky” Hellwig, who helps oversee $30 billion in assets for Morgan Asset Management in Birmingham, Ala. Noting that the stock market took a dive after the news, he commented that “investors voted with their feet”.

And with my limited understanding of the science of economics, this is where I should stop, but I won’t.

It seems to me that in all this economic stimulus stuff the emphasis has to be on job creation. People have to have money to buy things for business to prosper – I know it’s kind of a chicken and egg thing – what comes first? Business to provide employment or employment to provide wages so folks can patronize business. But the structures for business are already in place, so the easiest way is to increase jobs and get those dollars flowing.

It does seem as if the so-called toxic mortgage assets have to be dealt with in order for anything to get off the ground, for the lack of a known value for those assets seems to be what is stalling the investment of capital, most of which seems to be tied up in the complicated mortgage derivatives.

I’m confused and way out of my league here – but does anyone else have the answer?

One idea: the federal government buys up a substantial portion of those toxic assets at current market value (as determined by what homes are actually selling for now) and then at some point attempts to sell those mortgages to investors. Along with this could be a program that allows people occupying homes delinquent on mortgages to remain for a time by paying some amount of rent, with an option to repurchase at the current and much lower value and lower interest rates.

But the more I read and hear about trillions of dollars simply being thrown at banks and the continuing evidence that no one (but the recipients) knows what is being done with the money, the more I am tempted (only tempted) to move from a moderate to a conservative (but not a neocon or fascist type).

I am impressed, nonetheless, in President Obama’s reasonableness and openness in discussing our economic problems and his seemingly more sincere show of concern for all elements of society over that conveyed by the previous administration (I know they simply wanted everyone to have a chance to get rich, as if everyone could be rich. Rich is a state of being opposite of being poor. How can you be rich without someone else being poor?).

At the same time, I fear that if we move too far to the left, we will in our desperation wind up with some entrenched form of socialism, complete with the old Soviet style five-year plans, which always failed.

Social programs are needed, but socialism is not. Socialism simply has not worked as an economic policy. The Soviet Union dissolved. China retains its communist government but has had to move heavily into capitalism to prosper and Vietnam has followed that path. Cuba still struggles under the yoke of socialism (communism), and is moving toward a freer market system.

And like a stuck record, I say again in this space that re-industrialization that will turn the United States back into a maker of things as opposed to simply a consumer of things, is a large part of the answer to our economic malaise.

P.s. And here’s a question from an economic simpleton (me): if the government is being required to prop up the banks, why does it have to go through them as a middleman. Why doesn’t the government be the bank? (And of course then we would be into socialism, but that seems the way we are going.)

P.s. P.s.  Some say that FDR’s New Deal (complete with government make work programs) did not pull us out of the Great Depression – World War II did. On the other hand, countless survivors of that period of time are appreciative of the helping hand they got. Lesson: government does have a place in offering emergency aid to its citizens. Private enterprise gets the privilege of reaping the rewards of its own investments in prosperous times, but along with that privilege comes a responsibility to the public – not a responsibility in law, perhaps, but certainly a moral one. Those who continue their jet setting ways while taking taxpayer dollars lack morals and patriotism. Statutory law, probably, cannot correct this. Continued public pressure (politics) can.


Mulling over the libertarian option…

February 6, 2009

(Copyright 2009)

During our recent presidential election we chose between the two major parties, but there was a third way, libertarianism. Maybe we should have elected Ron Paul president, but of course we would not have done that because as most libertarians he came across as kind of cranky and he has that kind of whiny and raspy voice and he’s totally out of the mainstream.

What made me think about this is an article I read a few hours ago by libertarian economist Jeffrey Miron of Harvard University.

I was also mulling over an opinion piece written by President Obama and published in the Washington Post. And I caught a few minutes of Republican right wing radio.

As we know, Obama wants to push through an ever-expanding “stimulus” bill – it started out at $800 billion the first time I heard about it and now the new reports put it at $900 Billion. It has been heavily criticized for containing all kinds of pet projects, often called “pork”, to include things that seemingly have nothing or nothing directly to do with immediately stimulating the economy, such as family planning and health care.

The Republicans are calling for more tax cuts, their idea being that the economy can be stimulated better by cutting taxes than increasing government spending. By a little legerdemain, Obama proposes to increase taxes and cut spending (by borrowing money).

Obama wrote in his opinion piece that cutting taxes alone as an approach to stimulate the economy is part of the “failed theories” from the previous administration that have been resoundingly rejected by the electorate.

My view of what the traditional Democrats and Republicans want is unchanged. Despite what they claim, they are basically both in support of huge, overbearing government because it is the status quo with which they are accustom.

The Democrats want that big government to use its resources to do all kinds of things for a wide range of people. The Republicans want to use the resources of government to help the business class (there may be somewhat of a split between Wall Street and Main Street).

So anyway, even though I mentioned Ron Paul, I’m really thinking of what Mr. Miron wrote.

I don’t necessarily agree with all of what he wrote, but I think he made some good points. So I thought I might list some of them and give my response:

REPEAL THE CORPORATE INCOME TAX: I’m rather sure the Republicans would agree with this one. Miron thinks this would free up more money for more corporate investment, thus stimulating the economy. Also some argue that corporate income taxes are double taxation since shareholders must also pay income taxes on their dividends. I think this is worth consideration (taxes do have to be collected somewhere, though, and corporations benefit from the services and protections government affords).

INCREASE CARBON TAXES WHILE LOWERING MARGINAL TAX RATES: Miron opines that upping carbon taxes would be a more efficient way of going green because it would give industry an incentive to clean up its act without risking the likely boondoggles of so-called government green programs. It would also reduce the nation’s dependence on foreign oil. I like it.  As far as lowering tax rates, I don’t know. Everyone wants to have their own tax rate cut, but someone has to pay the bills. Perhaps a flat tax or a consumption tax is a better way to go. A lot of resources are wasted and and a lot of taxable income is hidden under the present hodgepodge.

MODERATE GROWTH OF ENTITLEMENTS: Our libertarian friend suggests raising the retirement age and putting a hold on increases in various social programs. For my part, I am sure those who have no need for the entitlements (and I don’t like that term) programs don’t mind cutting back. Social Security does need a stable and equitable funding system that is secure from raiding for other uses. Unlike libertarians and Republicans, I think government ought to be able to provide the citizenry with some protections as long as we all pay for it on an equitable basis. But it is true that while all industrialized nations provide social protections, they all face the problem of ever increasing costs. So entitlement spending does have to be kept in check. It could indeed bankrupt the nation. And I want to add that I don’t think raising the Social Security retirement age again is a good idea. We already have too big of a labor pool with too few jobs, and why do we want to work all of our life?

ELIMINATE WASTEFUL SPENDING: And who could argue with this? Problem is that one person’s wasteful spending is another’s much needed project. But included in Mr. Miron’s examples of wasteful spending are fixing levees in New Orleans, thus encouraging folks to live below sea level, farm subsidies, Amtrak, when, according to Miron, buses are more efficient, and the U.S. Postal Service when Fed Ex is more efficient (and I would add e-mail). I could actually write in defense of some farm subsidies because of the stability in agriculture that benefits all, but the problem is that a large portion of those subsidies unfairly go to the super rich (who are super rich due primarily to the subsidies) and also to people not involved in farming. As to the other examples, truly food for thought.

WITHDRAW FROM IRAQ AND AFGHANISTAN: And this is true libertarian doctrine. To my knowledge libertarians believe in using our military for direct defense of our country only. During the Cold War era, which included some hot wars (Korea and Vietnam, for example) we were locked into a military spending competition with the Soviet Union. The Soviet Union finally and essentially went bankrupt. What we do about our present engagements in the Middle East is a question. But I for one would hope we resist being suckered into war here and there and everywhere. Our present military adventures are a major drain on our failing economy and threaten the immediate defense of our own country by stretching us too thin. And then there are the moral considerations.

LIMIT UNION POWER: The big issue nowadays is card check. It is a system that circumvents the secret ballots workers use to vote a union in. Under card check, union organizers can bully workers into signing cards (and there is no protection of secrecy) in order to push through a union. I am against card check. I am neutral on unions themselves. But workers should not be required to belong to unions. In some cases businesses might find it advantageous to employ workers who belong to unions that stress professionalism. In my own working experience I have witnessed both the good and bad of unionism. The good: excellent wages and benefits and job security (except possibly in this economy). The bad: Work slow downs, refusals to work at a related job when the help is needed, indifference to the needs of the employer. (My experience primarily is from working as a non-union truck driver, who at one point did nonetheless benefit from a wage scale related to union contracts).

People who are paid well indeed help the economy.

EXPANDING LEGAL IMMIGRATION: The libertarian here calls for making it even easier for employers to hire foreign workers with specialized skills. I am not against this if it can be proved that U.S. citizens with the needed skills are not available, but I am against companies using the special visa program to undercut wages, and I think it is highly unpatriotic for them to do so. If we do have a dearth of skilled workers, industry should sponsor education programs to rectify the situation. And needed skill training should get more attention in public education as well.

RENEW OUR COMMITMENT TO FREE TRADE: This is a tricky one. We know from experience that during the Great Depression (the last one) raising tariffs brought on reprisals from other countries and exacerbated the economic woes. Right now, like it or not, we are a consumer nation and our whole economy is structured around free trade. While I think it might not be a good idea to raise tariffs or otherwise officially discourage imports, I do think we need to expand or rebuild our own industry and become more competitive on the world market.

STOP BAILING OUT BUSINESSES THAT TOOK ON TOO MUCH RISK: Nothing more I can say on this other than I agree. As the bailout billions (to become trillions) multiply and the nation goes deeper and deeper into debt and as the economy spirals downwards it may become all too apparent that bankruptcy was the answer the whole time. Bailouts, which have been done in times past, send the message to the marketplace that risk can be hedged at the cost of the taxpayers – wrong message.

Separate from all of the preceding, and of libertarian thought, I personally suggest an expansion of or creation of federal job corps type programs that put people to work doing things that the private sector never gets around to doing but are needed nonetheless.

Also, reinstating the military draft could help relieve our stressed armed forces and provide relief in the ever-shrinking job sector. It would also make our presidents and the electorate itself become more circumspect in ordering or supporting military interventions. Just an idea.


No business is too big to fail; void will be filled

January 30, 2009

(Copyright 2009)

The idea that a financial institution should seek and receive a government/taxpayer-funded bailout because it is failing, but too big to fail (in other words failure would ruin our whole economy) and then turn around and reward its top executives with huge bonuses seems absurd on its face. And yet this is happening.

Wall Street institutions paid out more than $18 billion in bonuses last year (while the taxpayers are being robbed of billions to be handed out to these “poor” institutions supposedly to keep them from failing).

Of course it is not happening without complaint. The public is outraged. President Obama says he is outraged. He calls it “shameful”. And he promises there will be safeguards from now on to make sure things like this don’t happen (we’ve heard that before, but that was from the prior administration, but we have heard it before).

At least one senator said the government should take back that bonus money (we’ve heard that one before as well).

Yes, I think the government should do just that on the grounds that the financial institutions claiming to be in danger of failing defrauded the government. Any company that can afford to lavish bonuses does not need government help (and if they can’t afford it and are doing it anyway, that has to be malfeasance and out and out theft). There is an argument that bonuses are just part of the compensation package. Then why are they called “bonuses”? And besides, perhaps the “compensation” is too lavish for “failing” institutions (and the logic behind it is key to why they are failing).

This situation reminds me of the D. H. Lawrence short story “The Rocking-Horse Winner”. An upper middle class English family was in a desperate financial bind because the husband gambled and the wife overspent. She had to go to her brother to bail the family out. When her brother told her they would have to cut back, she refused to accept that. I think the Wall Street types are not accepting that either. In this case, the rich uncle is Uncle Sam, but Uncle Sam is not a person, he’s just the symbol of all the taxpayers.

Probably the rich uncle in the D.H. Lawrence story should not have bailed his sister out with her attitude. And I am beginning to think that Uncle Sam should not have bailed out any of the financial institutions (and you may recall I did not tend to support the bailout thing from the beginning).

The very idea that any business is too big to fail seems flawed to me. Are there not bankruptcy courts? (Kind of sounds like Scrooge: “are there not poor houses?”)

I have read speculation that the government may have to nationalize the banking system.

But if we are to maintain free enterprise (and I support that) and an essentially private banking system (and I support that, with regulation), then we have to allow institutions to fail.

When any business fails, eventually the void that it leaves, if any, is filled by another entity.

No one wants to see the major institutions fail and then the whole economy be wrecked. But to an extent it is already happening, even with bailouts.

Unless the government takes over the money institutions (and other businesses – auto makers?), it will have a hard to impossible task of telling them how to use their funds — and does the government really want to take them over?

Back to the bonus question. Some argue that there is logic in a failing institution paying bonuses because that is the custom in the business (and I don’t understand that one – paying bonuses for losing money) and the money used for bonuses is not the same that was received from the government bailout funding. Nonsense! Money is money and money is fungible.

Such shenanigans would not fly in a federal bankruptcy court if the average citizen was involved.

This nation is likely to fare better from the pain that will be caused by major institutions going bankrupt than by the mountain of debt that the government is now absorbing from failing institutions and the amount of debt it is incurring from future bailout plans.

I am more for our government stepping in and helping citizens in times of crisis (we are the force behind government; we are helping ourselves or each other) and only on an emergency and needs-tested basis.

P.s.  And finally, I say to any business: pay your executives as much as you want, just not with taxpayer money!


Public should e-mail over bailout abuse…

December 24, 2008

(Copyright 2008)

The Wall Street investment firms who got the billions of public dollars in the bailout are refusing to say what they are doing with all the money even though the public was promised that the government would not just hand out the money with no strings attached and that there would be transparency.

And, to add insult to injury, they are paying out billions of dollars in bonuses, which of course are made possible by bailout money, to pay those who lost the money in the first place.

They argue that they have to pay top people top money, but the bonuses they pay are way beyond the pale (at least to the vast majority of citizens of planet Earth) and if these people were so talented those entities would not have needed the bailouts.

(I did read that some executives are getting paid in those questionable securities that have taken so much blame for this economic mess, rather than cash this year. But before you feel too good about that, that is that they got what’s coming to them, I also understand that some think those securities actually might be worth something some day.)

I was so hot about this that in my first blog draft (unpublished) I said now is the time for the revolution, whoops, there I said it, but I don’t mean it. But I do find it galling that the average citizen is forced to fund the extravagance of the Wall Street set.

But rather than taking any drastic steps as citizens ourselves, we should e-mail all of our legislators and let them know of our feelings.

While I see no justification in paying bonuses, I find myself having to be somewhat circumspect about whether the banks are improperly using the bailout money by not doling it out in loans. As one commentator put it, they may be having a hard time finding a prudent investment in this economically uncertain climate. Recklessly loaning out money is part of what got everyone into trouble in the first place. I read that some banks have invested in bonds (which are essentially loans). I would think, though, that the government needs to demand more transparency and control over the use of taxpayer money. I’m not even sure why the government has to funnel this printed up money through the banks.

On the subject of the bailout for the American auto makers I have said that they should not get the money – I know, too late, Bush decided to give them a bailout (and now I hear on the nightly news that the Big Three American automakers are expected to go bankrupt anyway). I wrote that foreign auto makers are producing cars here and they’re not going out of business. Well Toyota is posting its first operating loss ever due to depressed auto sales. I also wrote that maybe there is not a good market for new autos. And that seems to be the case (although I did hear a report today that suggested low gas prices might result in a new demand for gas guzzling SUVs – crazy, I know). The current poor demand for autos is partly the result of the spike in fuel prices a few months ago, although followed by a current downward spiral (caused by people not driving because of the high price of gas), and a lack of credit to buy cars, and the bad economy and a ballooning unemployment rate. Whatever, there’s a lack of demand right now.

But, if people decide they need or want new cars, car makers, be they American owned or foreign owned, might think about lowering prices.

But back to the abuse of the bailout. First there was strong resistance among the public and lawmakers to the original bailout. Then folks were cowed into supporting it when they saw their 401K fortunes vanishing with a tanking stock market.

But the stock market makes no sense. It has gone way up one day and way down the next and way up again – although the trend certainly is down.

But the stock market has always been a gamble and sometimes it’s a fixed game. Yes the experts will tell you that story that over the long haul people who stick with the market have made money. The truth is a lot of people who stuck with it have lost their life savings and may not have enough years left to get it back. And then there is the undeniable fact that there is manipulation in the stock market. It is not a level playing field. Just read an article in Forbes online that said electronic trading programs think and act much quicker than humans can and that the systems take advantage of those investors who are unsophisticated and not marketwise.

While I don’t believe in lockstep government control of the economy, I do believe that people need a transparent and regulated system that offers relatively safe ways of investing, and at least a level playing field for those up to gambling on the markets (CDs at guaranteed interest over a term, are an example of a safer way of investing).

Gambling pits that they are, the stock and the commodities markets need strict controls. After hours trading and gimmicks such as short selling should not be allowed. Even for those who do not participate in the trading markets there need to be safeguards, because we are all dependent upon the economy which is dependent upon these markets, as we have all found out in this current economic upheaval.

But I would urge everyone to e-mail their lawmakers and let them know we do not intend to continue to be extorted by sending our tax dollars to fund the wealthy set.

Most of us have hope that President-Elect Barack Obama will set things on the right course once he takes over. I would hope that he does not intend to hand out more money unaccounted for.

But I would say, don’t look to the Democrats or the Republicans to get us out of this mess. Look to yourselves.

P.s. I recently suggested in a blog that while I don’t want us to have to go to war to get us out of what looks like the second Great Depression, maybe we should build up the military. Now I read in the Wall Street Journal in an opinion piece by Martin Feldstein that defense spending should be increased now (we’d need to do it sooner or later anyway) and that there ought to be increased recruitment into the military, perhaps by offering two-year enlistments. I had suggested a military draft. Feldstein was an economic advisor to President Reagan (and by the way, I am not now nor have I ever been a fan of the late President Reagan, but I’ll let history judge how good a president he was).

P.s. Ps. MERRY CHRISTMAS!!!


The socialization of America; a war loss…

October 14, 2008

(Copyright 2008)

The WALTHER REPORT

By Tony Walther

I think our economy is fundamentally unsound and what we are doing now, the bailouts and what amounts to a partial nationalization or socialization of the economy by our government, will only act as a band-aid or a pill that at best will temporarily mask the symptoms of what ails us.

Admittedly I know little of economics, but like most of us, it has been so much in the news these past several weeks and in so much detail, I feel like after all these years I really do understand some of the fundamentals.

Before I go any further, I would suggest reading a piece by Harvard lecturer and economist and Libertarian Jeffrey Miron, now posted on CNN Politics.com. While I have never thoroughly bought into libertarianism, I think that they seem to be the only true conservatives (and they are liberal on social issues, although not government involvement in social issues).

Back to my thoughts: I will wander here, as I sometimes do. But last night while I was trying to read a novel, I had the TV on low and caught a portion of some finance commentators from Britain, I believe. They read an e-mail from someone who complained about the bailouts and also noted that he began his career as a gofer for some financial firm in 1969 at $129 (American) per week. “Now these guys come out of college and think they should start at $200,000 per year.”

Wandering still: I note that Barack Obama has the political guts or maybe savvy to concede in his stump speech that although a lot of our problems are caused by greed and malfeasance on Wall Street, there is also blame to those on Main Street, so to speak, who knew they were getting in over their heads and did it anyway. I think he is being honest there and is also trying to appeal to the centrists, much as I believe Bill Clinton often did. I recall that at one time during his presidency Clinton was referred to as a centrist or maybe even a slightly conservative or “new” Democrat.

Whatever, he supposedly balanced the budget and left office with a surplus. Actually I think that is a lot of accounting trickery that both the major parties engage in, such as when they propose new spending, then cut that proposed new spending slightly and claim they have reduced government spending. This charade is aided and abetted by the news media, which in some cases does not understand what is going on and in others just settles for it because to do otherwise takes too many paragraphs of explanation.

All that aside, Clinton was aided by a robust economy, the Dot Com bubble, as I recall, was a big part of it. But under Clinton the federal budget was balanced (in governmentspeak anyway) and Welfare reform was enacted, something you would have expected Republicans to do.

Bush came into office promising to keep taxes low (especially for folks who could most afford to pay them in the first place) and to loosen government control on free enterprise. He now prepares to leave office while presiding over the biggest socialization of government since Franklin Delano Roosevelt (maybe bigger).

It seems that a lot of the laissez faire free enterprise folks, to include George W., don’t have the courage of their convictions. To be sure, this bailout and nationalization stuff has caused a split in the GOP, which will in part to be blamed for John McCain losing the election, as he at this time seems destined to do. I still think he could win if the stock market were to stay up and gasoline prices kept falling, and if there were to be some attack on the nation or if as I read in another blog that the Bush Administration is able to announce that Osama Bin Laden has been caught. Now this does not make sense. But the voting record of the American electorate is often driven by fear and emotion. This time around it does seem,though, that folks – the Palin contingent aside – seem to be looking at things more thoughtfully and more people are taking part.

What I meant to say in this blog and did not get around to, is that our economy is fundamentally unsound because we (as a nation) have spent too much time consuming and not enough time making. When we get back to the making, which we are quite capable of doing, conditions will improve greatly, I feel. When we get back to investing in our own nation and not industry elsewhere and not in nation building in the Middle East, things will turn around.

Still wandering, but I fear that all of this government infusion into the economy is going to lead to wild inflation. I just heard an economic pundit on TV say that he thinks we are in danger of going into something worse than the Great Depression. We’ll have high unemployment but unlike the Great Depression, we’ll also have inflation.

Wouldn’t it have been better to let the investment banks and other banks fail and be replaced by new bankers who would operate like the bankers of old, prudently?

And finally, I want to jump to the subject of war. In all of this economic upheaval we have forgotten about the wars we are fighting.

Unlike Vietnam (something a couple of generations now have no memory of), there is no draft and the numbers of casualties and troops involved are much smaller (but no less important). But people are dying and being gravely wounded and none of us really know what for, beyond the jingoistic phrases of “fighting terror” or “fighting for freedom”, that have no thought behind them.

I want to mention this because I was thinking about a boyhood acquaintance that dates back to first through fifth grade. He had a stutter, and beyond that I can only describe him as the typical all-American boy. He probably did not do well in school (I don’t know. Our family moved after fifth grade). I recall going over to his house and a bunch of us kids playing on the slip and slide he had just got. I often think back to those kids because it was a time when we were all so happy, free and easy, with no responsibilities (at least I didn’t have any).

I had just got through entertaining my youngest daughter with my memories of that kid who stuttered (not about his stutter, just the fun) and went back into the house to go on the computer. Quite by chance I ran across his name. He died as a Marine in Vietnam from enemy fire.

None of us knew what that war was all about either, except something about fighting for the cause of freedom, and yet no one was freed, except from life on earth.