The Republican Party: An American Train Wreck?

Take a look at the map of states that were won by John McCain and those won by Barack Obama in the 2008 election. It’s pretty clear that Obama won the northeast part of the country and he also won the west coast.  McCain pretty much won the south and the west, except for the coast.  Besides looking at this as just a map of red and blue states, we can also inquire about the nature of these states.  Is there something about the blue states that would inherently indicate that they would lean Democratic while the red states would lean Republican? I think so; it’s the population.

The northeast and the west coast are the most densely populated areas of this country, while the south and the west are farm and ranching areas – generally.  Of course there are exceptions like the cities of Dallas and Phoenix.  However, I think there is something to be inferred from this distribution of red and blue states that spells disaster for the Republican Party down the road.  It’s just like watching an out of control train as it speeds downhill toward a 90 degree turn.  You already know what the result will be.

Today, the population of the United States is a little over 307 million people. The majority of these people live in the heavily populated areas of the country, i.e. the northeast and the west coast, and these areas are growing.  So why are these areas also the most Democratic parts of the country? And why are the more sparsely populated areas primarily Republican? I think it’s because of the underlying philosophical differences between the two parties.  In general the Democratic Party stands for social programs, i.e. people helping people or government helping people.  The people who live in our great cities all know one thing: they are interdependent.  People in these areas are specialized.  They work as doctors or lawyers or breadmakers or car salesmen. Very few, perhaps none of them, can be called self-sufficient and they know it. They know that a complex society can only be successful when all parts of the social system function efficiently. If one part of the system, let’s say the dentists, fall on hard times it will only be a matter of time before a lot of people begin to suffer from tooth aches. Similar problems arise if the bus drivers or the rubbish collectors or the school teachers encounter severe problems – the society needs all of these to function efficiently – and the Democratic Party is oriented towards helping social groups to succeed.

On the other hand, the Republican Party has chosen to make itself the party of the rugged individualist. The rancher, the farmer, the business owner, people who have to be self-sufficient or nearly so are the targets of the Republican Party. People who live far from the centers of society and have no opportunity to partake of the social programs in the cities are drawn to the Republican message of self-sufficiency.  One of the problems the Republican’s face is that this group naturally also contains the lunatic fringe, the self-absorbed, the isolationists, and the paranoid.  It also contains the misanthropes, the extremely greedy, and the ultra-wealthy, self-absorbed, self-appointed aristocracy of America who have little use for the common people or the laws of the land, which are clearly written for the peons to follow and not them.  The Republican Party has become an odd group of followers of  Limbaugh and Beck, O’Reilly and Palin, McCain and Bachmann. But what is their message? Is there anything that this menagerie actually stands for?  Or is it just the Party of “NO!”?

Clearly, the “NO” aspect of the Party is easy to see.  It seems they are routinely against anything the Democrats propose – sight unseen. If it’s a Democratic proposal they don’t want it – period. OK.  So what are they for? It seems that what they want is less government control of everything.  They want to be left alone. They can take care of themselves and they don’t want their taxes raised – they want them lowered, preferably to zero.  The rugged individualists of the Republican Party just want to be left alone.  This, of course, is especially true of those rugged financial individualists who contrived with George Bush (and by the way Bill Clinton bears responsibility for this too) for the dismantling of the financial controls that had been in place since the Great Depression. This great dismantling was a direct contributor to the screaming nose dive our economy took under President Bush.

Today, and day after day, we hear the Republicans say, over and over again, “NO!”  They are against everything President Obama wants to do.  The thing is this: the demographics of this country are changing. Fewer and fewer people are living independently on farms and ranches. Not everyone can own a small business.  Not everyone can be a stock market tycoon or a brain surgeon or a doctor.  Most people are average (by definition, I suppose) and they get average jobs and live in average places – which has become the northeast and the west coast.  In other words, the Republican base is shrinking and will continue to shrink, and as it shrinks it will become more shrill and thus the Republican message will become more shrill – but this shrill message can’t attract converts from the Democratic Party.  There lies the problem. The Republican train is headed for a wreck – anyone can see it if they just open their eyes.  Their message of “leave me alone” appeals to fewer and fewer as our population grows and becomes more and more interdependent.  The real problem for the Republicans is that the Republican train is currently being driven by some very odd people who have no business driving trains and who have no idea they are headed for a glorious wreck.

The crash is coming.  It’s just a matter of time. It’ll be a huge train wreck, just wait and see.

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Earmarks: An Essential Part of Our System

As the budget makes its way through Congress we now hear the annual outcry from certain politicians about the great evil of Congressional earmarks.  Senator John McCain could probably be called the champion of the crusade to eliminate earmarks.  Hey John, I have an idea.  Why don’t we just eliminate the Senate? Or even better, maybe just eliminate the Senate seats from Arizona? Would that work for you?

The earmark is an old tradition in our governmental process and it serves a good purpose: it represents the voice of the people via their elected representatives in Congress.  Each year our government needs to create a budget for the following year.  Guess who has that responsibility? The President  – not the Congress. But the President doesn’t actually draw up the budget, neither do his White House staff.  They don’t have the time or resources for that.  The initial cut at a budget is delegated to the army of civil servants that work in our many governmental agencies. Basically a request goes out from the President for inputs into the next year’s budget. The request goes to the Department of Defense then to the Departments of the Army, Navy, and Air Force.  The request goes to the Department of Agriculture, the Department of Commerce, and on and on.  Every department gets to send in their wish list to the President for both continuing and new funding.  This is all done by the employees of these departments who are all civil servants, i.e. government employees.  If you ask any one of these government employees who they work for they will immediately say they work for the President – and they do.  Some will tell you that they are the government.  No, really, some of them actually think like that.  Some of these people don’t know the difference between being a government employee and being the government itself.  Does all this sound a little inbred?  You bet it does.

Here’s where Congress comes in.  They get to approve and modify the budget. John McCain, a staunch supporter of the military “chain of command” school of thinking, believes that the only appropriate action for Congress to take is to approve or disapprove the President’s budget. He doesn’t go for that modification thing at all.  After all, John McCain, old soldier that he is, knows full well that the President is the Commander in Chief – so why should anyone else have a say in the budget?  Because we are not a dictatorship, John; that’s why.  Our elected Representatives and Senators are sent to Congress to listen to our local needs and to represent those local needs in Congress – if they don’t do that then who needs them?  That is how our government works and any senator worth his salary should know that.

One way our representatives represent us is by adding items to the budget that the President’s civil servants neglected to include.  These additions that correct the errors and omissions of the President’s budget are called earmarks.  Senataor McCain wants them all banned forever and ever.

For example, Senator McCain recently ridiculed an earmark for North Carolina for “beaver management”. McCain sent out a tweet to his followers (McCain actually knows how to send a tweet? He knows about computers and text messages?) saying, “How does one manage a beaver?”  I can just hear him chuckling now.  Pretty funny – like herding cats, I guess.  Right, Johnny. In actuality, if you bothered to check, Johnny, you would find that you manage them by trapping them and by blowing up their dams.  Why? Because if you don’t you get severe flooding of rivers and streams that causes lots of property damage and the loss of millions and millions of dollars, because the beaver population tends to get too large.  That’s why.  And that’s why earmarks are a necessary part of the process.  The civil servants of this country do not represent us or our interests.  They don’t even know about our needs or interests, and neither, it seems, does John McCain.

The real problem with the earmark process, if John McCain would like to know, is when lobbyists get involved in the process.  Then money starts to change hands and unnecessary earmarks make their way into the budget and a few select companies make a lot of money doing senseless things.  However, this is really a problem with lobbying, not earmarks.  The real problem is that lobbying also affects the President’s budget too.  You know all those civil servants who write up the budget inputs? Lobbyists talk to them.  They also talk to the generals and the admirals. They talk to anyone who has the power to control spending. The result is that the President’s budget is as equally likely to be contaminated with foolish projects as are the Congressional earmarks.  The real problem is not earmarks.  The real problem, which no one seems to complain about, is the lobbyists.  Funny thing though, you never hear McCain complain about lobbyists, do you?  Hmmm, I wonder why?

If you want to learn more about McCain’s relationship with lobbyists, click here.

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Barack Obama: The New FDR?

There are a couple of interesting sayings about history. One of them is: “History repeats itself”.  Another one, closely related and penned by George Santayana,  is: “Those who do not learn from history are doomed to repeat it.” The economic history of the United States is now in one such process of repetition as our economy and stock market continue to melt.  Ben Bernanke, a student of the Great Depression and Chairman of the Federal Reserve, has taken significant steps to try to avert a repetition of the Great Depression that followed in the wake of the stock market crash of 1929.  He has already drastically reduced interest rates. With rates now close to zero, this is little more that he can do.  Treasury Secretary Paulson has also advocated taking major economic actions and has quickly acted to save the investment banks (which are now bank holding companies). It seems that he has also learned something from history, although probably not nearly enough.

If there is one person who history has blamed for the depression it is the Republican President at the time, Herbert Hoover.  Hoover is blamed, not so much for what he did, but for what he did not do. He sat back and watched as the stock market slid and the banks collapsed, over a period of about three years.  The stock market fell to an eventual value less than 10% of what it had been at its peak, and over 10,000 banks failed.  Unemployment went up to 25%.  Many businesses ceased to exist.  Unemployed people were standing in bread lines to get food.  Hoover did nothing because he believed that the capital markets were self-regulating and that no-rules capitalism would always correct itself.  Despite his own record in his earlier years of being a government interventionist, when he became President he had come to believe that a hands-off policy would be the best for the economy.  History has shown him to tragically wrong, and by the time he left office the United States was deeply mired in economic chaos and hardship.

We are at a point now in our economic history that, in many ways, is similar to where we were in 1931- our stock market is now about halfway to the bottom. We have an ineffectual, conservative, government, steeped in the Republican, feudalistic philosophy of trickle down economics. Our government believes that if we can just repair the damage to our big businesses and banks then everything will be OK.  George Bush and his wealthy advisers stubbornly cling to their self-serving, failed, economic beliefs and have no effective plan to restart the economy that for the past several years had been surviving only by the economic churning of a real estate Ponzi scheme.

Despite the catastrophic failure of Republican feudalism,  John McCain still deeply believes that the correct order of things is for the United States to have a small, ultra-wealthy class from which all things trickle down to the ordinary man (should I say peasant?).  He is a man who, if elected to be President, would do absolutely nothing to correct the imbalance of our tax system that so greatly, and catastrophically, favors the ultra-rich.  He is fundamentally a stingy man who would cut taxes even more for the rich if he could. He would tax the health care benefits of the middle class, and he would drastically cut Medicare which provides the sole source of medical insurance for many of America’s elderly.  A cold and uncaring man, given more to fighting wars than reaching out and helping people in need, he is certainly the Herbert Hoover of today.

On the other hand, Barack Obama has come forward with a new vision – a New Deal, so to speak. He will spend massive amounts of money to create a high technology effort to produce modern forms of energy that will make us self reliant and in the process he will create millions of new jobs for the middle class.  He will provide better health insurance for all and work toward greatly improving our schools – a critical step if America is ever to succeed in today’s economiy. He will pay for this by revising our tax code so that the wealthy and the ultra-wealthy will once again pay their fair share of taxes. He will eliminate wasteful and corrupt spending, (like the Iraq War), and he will impose new regulations on Wall Street that will prevent the greediest of the greedy from ever again recreating a state of economic deregulation such as we have had, that, in the past, resulted in the stock market crash of 1929 and now has resulted in the stock market crash of 2008. Barack Obama is essentially the Franklin Delano Roosevelt of our day.

It now up to us to choose who shall lead this country out of this economic quagmire.  Will we learn history’s harsh economic lesson or ignore it?  Will we choose the ghost of Herbert Hoover or the spirit of FDR to lead us out of economic ruin?  History has already clearly shown which of these is the right man for the task – all we have to do now is vote.

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The Redistribution of Wealth – McCain Style

John McCain is fond of saying that Barack Obama wants to “share the wealth”. By this he means that Barack’s tax plan is unfair and that it will result in taking money from the wealthiest people in America (like John McCain) and giving it to the less wealthy (like you and me).  He and Sarah Hockey Puck then go on to rant about Socialism and Europeans, etc.  There is little doubt that one of the fundamental causes of the current economic meltdown is “no rules” Capitalism – the sort that John McCain, George Bush, Ronald Reagan, and Alan Greenspan have advocated over the past thirty years.  There is, however, a deeper underlying factor that has led to the financial horrors that many Americans are now facing: it is the 401(k) plans that so many of us have come to depend upon.

The term 401 (k) refers to a particular section of the U.S. Internal Revenue Service code.  The groundwork for our present 401 (k) system was initiated in 1978 when the IRS allowed employees to not pay tax on deferred income.  However, it was not until 1981 when Ronald Reagan was President, that the IRS allowed salary deductions to go directly into a 401(k) account without any tax being paid on the contribution. This was the beginning of a massive injection of new funds into the U.S. stock market – investments that were being made by ordinary U.S. citizens, i.e. amateur investors. If you look at a chart of the Dow Jones average for the past hundred years you will see many interesting features. One of these is the spectacular climb in the Dow between 1925 and 1929 – probably something Alan Greenspan would call irrational exuberance. You might also notice that after the stock market crash in 1929 that the Dow did not return to its peak of 380.330 until 1954, twenty five years after the crash.  A strong period of growth begins in the middle of World War II as U.S. factories supply arms to most of the world. This growth continues throughout the recovery period after the war until about 1966.  We then enter an ocillatory period of about fifteen years of essentially no growth in the Dow. Then we come to 1982 and some companies begin providing 401 (k) options to their employees instead of defined benefit pension plans (in defined benefit plans the company guarantees you a specific retirement income, and the company assumes all the risk of providing your pension).  By 1984 there was almost $94 billion in 401(k) funds invested in the stock market. By 1990 there is almost $385 billion of 401 (k) money in the stock market. By 1996 there is about $1.06 trillion of 401 (k) money in the market. In 1998 there is $1.54 trillion. By 2002 there is $1.8 trillion. By 2003 there is $1.9 trillion.  Based upon these numbers we might expect the total value of 401 (k) contributions invested in the stock market today to be about $4 trillion dollars. If we look at the total loss in the U.S. stock market capitalization since the market peaked almost exactly a year ago we see that the market has lost about $7 trillion dollars in value.

This is another way of saying that your 401 (k) wealth has been shared – probably in a way that John McCain approves of.  A lot of the experienced investors bailed a year ago when they saw the meltdown coming. These experienced investors are mostly the wealthy or the analysts who work for the wealthy. They have sold at the top, or near the top, and have pocketed an amount equal to a bit more than the total amount of 401 (k) investments in the market.

Wanna play “share the wealth again”? John McCain has another great idea for you: how about instead of the government providing you a “defined benefit pension plan” i.e. Social Security, you just invest all your Social Security contributions in the stock market – just like a 401 (k)? Pretty good idea, huh?

If you look back at the chart that shows the performance of the Dow for the past hundred years you can see that beginning about 1998 the growth in the market – probably due largely to the injection of funds from 401(k) accounts – has slowed down and we get into a “double bubble” economy. First we have the tech bubble, then the housing bubble as people chase temporary increases in stock value. It looks like the 401 (k) accounts are no longer a big enough annual contribution to continue to automatically propel the economy upward – which of course explains why John McCain wants to put your Social Security money in the stock market and provide another great injection of funds into an otherwise tired stock market. It’s all part of Johnny’s plan for sharing the wealth.

The thing is that neither Johnny nor George Bush give a hoot about why Social Security exists in the first place.  It was created during the Great Depression after people got wiped out in the stock market crash of 1929 and then found that when they reached retirement age they had absolutely no income.  Social Security is there to protect the average person from the avariciousness of the wealthy who would try to entice the innocent worker to gamble their life savings on the stock market. These scrooges have already been successful in doing this with the creation of the 401 (k) plans and now they want to do more of this by privatizing Social Security. John McCain and the rest of his wealthy cronies are not against wealth redistribution, in fact he and they have always been very active proponents of it -it’s just that it is your wealth that they want to share, not theirs.

Come to think of it, they’ve been pretty successful at it too, haven’t they?

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The Sun Sets on the American Empire

You can see it in the controlled rage of John McCain during the debate with Barack Obama. You can hear it in the desperate rantings of Sarah Palin as she frantically appeals for the drunken support of Joe Six Pack and his redneck friends.  You can sense it in the uncertain voice of George Bush as he tells a very small crowd of supporters that all will be well.  Around the world the stock markets are crashing, governments are desperately trying to shore up their economies, and ordinary citizens sit bewildered, knowing that their life savings have suddenly evaporated as their banks collapse.

It is as America’s poet laureate, Bob Dylan, wrote, “The old order is rapidly fadin’.”

Through many years of Republican rule in the United States, tax laws were passed that always favored the wealthy and burdened the poor.  The outrageous use of our military might was used to raid the wealth of other nations. U.S. multinational corporations exploited of billions of poor workers in foreign countries, even at the expense of our own people’s jobs.  With a blind eye towards those who are suffering – even our own drowning citizens of New Orleans- George Bush and his cohorts implemented a cruel and distorted vision that attempted to take us back centuries in time and create a worldwide feudal empire. His was a vision where a small number of ultra-wealthy businessmen ruled everything, supported by an “undeserving” peasant class in America and abroad.  It was only their extraordinary greed that brought them down as they believed in their own malignant lie that a worldwide “trickle-down” economy could be self sustaining.

This worldwide American Empire – really more of a financial empire than a physical empire of nations, was the ideological successor to the British Empire.  Both fell for the same reason: excessive and unsustainable greed and an unfailing, but wildly errant, belief that there truly is a class of “elect” people in the world who are destined to rule the peasant masses.

George Bush made one of his famous  idiotic gaffes , while he addressed Queen Elizabeth.  He later said that, “She gave me a look that only a mother could give a child.”  I suppose, somewhere in his brain, George Bush somehow really does feel that the Queen of England is, in some sense, his mother and that he is, in some mystical way, a part of the royal family.  Or maybe he just wants it to be so.  I wonder what Freud would say?

Last night’s debate was the end for John McCain, although he may not yet realize it.  His days are over; the people have decided; the voting on November 4th will only be an anticlimax. It is now up to Barack Obama to right the wrongs of the predatory past.  Just as the Republicans pushed through tax legislation that crucified the lower and middle class while giving enormous benefits to the wealthy, the Obama administration must dismantle the old tax codes that embraced the myth of “trickle down economics” and replace them with truly fair taxation.

Barack Obama will need to take steps to rapidly reinvigorate our country by establishing a new engine for our economy. This engine must be based upon technology development because the old manufacturing economy has been outsourced to China, and it’s not coming back.  Barack Obama needs to follow through with his vision that health care is a “right” for all.  This is a right that has been too long neglected by the Republican feudalists.  He also needs to have a vision that a high quality, university-level education is also a “right” for all – it is also a need for our country if we are to compete in the global economy.

There is much work to be done. There is much debris left to clean up from the economic collapse due to the corruption and greed of the Republican feudalists. We have an economy that must be put on track again; we have a military that must come home from its foreign expeditions; we need to regain our country’s preeminence in scientific research and education; and we need to once again become a true champion for human rights in the world.  It is time for the feudalists to realize that their time is over and to step aside.

As Dylan said long ago, “Your old road is rapidly agin’.  Please get out of the new one, if you can’t lend your hand.  For the times they are a-changin”.

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