Tag Archives: economy

            Blogs are very democratic.  They are a way of giving and getting opinions faster than ever beforein real time and raw delivery.  Do you think Nancy Pelosi sucks?  You can get on the Web and say so.  Do you think I suck?  You can reply to this post and get in my biznazz.  Sure, the Internet is a virtual playground for rabid partisanship, anonymous ad hominem attacks, and enticing but unsubstantiated pieces of news, but isn’t that how we like our informationreactionary and with a built-in bias?

            That is certainly what we receive from most modern forms of communication.  Talking heads on CNN are actually quoting from websites and from Twitteras if what Joe Sixpack.blogspot.com says about energy policy has equal weight as Secretary Stephen Chu’s remarks on the matter.  Not to mention that shouting matches, visible disgust, and partisan hackery are the staples of cable news commentary.  That’s why I loathe cable newsit’s not news at all.  Everyone has an agenda, and those who don’t simply seek to aggrandize themselves at the expense of truly investigative journalism.  There is a disheartening cycle taking place in the mainstream media: anchors tell us what they think, then report on what we think they think.

            Call me old fashioned, but if I want accurate news reporting that’s not sneered at or otherwise agenda-driven, I still turn to the dying breed that is the American newspaper.  Bloggers could not function without newspapersthey provide the research and the analysis to which we react.  They station reporters in state capitals and in city council meeting rooms to ask questions and pore through documents that my staff of one has neither the time nor the credibility to access.

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            Some journalists are bloggers, but most bloggers are by no means journalists.  What we do is essentially creative writing that seeks to persuade, mock, or champion.  I write about government policy, but I doubt that I could get the mayor of my town to provide his analysis for this website, much less a member of the United States Congress.  Newspapers provide the institutional memory and the ability to work through the backchannels of power to investigate the claims of those in charge and seek rebuttals from those who aren’t.

            Unfortunately, the newspaper business model is suffering.  Ad revenue is drying up because news and opinions can be found for free on the Internet.  Which is a shame, because print reporters have a long legacy of uncovering wrongdoing from the Bush administration all the way back to the Revolution, when pamphleteers spread the news of British retribution on the troublesome colonies and mobilized a confederation of Americans into action.

            Television and blogs are great for the up-to-the-date scorecard reporting that dominates political discussion: Who’s ahead?  What are the Republicans saying?  How are Obama’s poll numbers?  Don’t get me wrong: on television, many an influential guest can reveal their true self under direct pressure.  And there certainly exist witty, intelligent bloggers who want to share their professional knowledge among a wide audience.

            However, there are types of information that a laptop-toting citizen journalist or a camera-lugging television crew cannot access.  Until I can hire a cadre of editors, fact checkers, and muckrakers, I will continue to rely on the newspaper and know that the people behind these stories aren’t yearning for face time on TV or anonymously assailing an ideological opponent online.  Rather, they are letting us know what is wrong with our society and leaving us to debate on how to fix it.

            In 1787 Thomas Jefferson responded to Shays’s Rebelliona revolt of small farmers in Massachusetts from heavy taxationby writing, “I hold it that a little rebellion now and then is a good thing,” and that “The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”  More than half a century later, Karl Marx reacted to the rise of industry and the gulf between the wealth of capitalists and the wealth of workers by noting that the bourgeois class has “resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedomFree Trade.  In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation” of the working class.

            Fortunately, a full scale revolt of the working class has never occurred in the United States, but that is not necessarily a sign that all is well.  Exhibit A is the outrage over $165 billion worth of bonuses and “retention pay” that is being awarded to AIG Financial Services employees, the people who were at the heart of the global credit collapse.  Congress is apoplectic, people are sending death threats and staging protests, and President Obama has the unenviable job of trying to calm nerves on both sides.

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            What Americans are beginning to realize is that the belief that “what is good for business is good for the country” is a complete myth.  Loosely regulated financial institutions with complex derivatives trading?  Salmonella in peanut butter products?  Drug companies believing they are not subject to state protections laws?  Twenty percent of Americans holding 84 percent of the country’s wealth?  CEOs making 344 times the pay of the average worker?  Whenever politicians (usually Republicans) argue against policies that would tax carbon emissions, or allow workers to unionize, or protect consumers, they say that any additional burdens on corporations would be bad for business.

            Why should we care what’s bad for business?  I want to know what’s good for the employee, the consumer, the ordinary citizen.  We have a capitalist culture that is only concerned about quarterly profits, the ups and downs of the stock market, and short-term gratification.  And it is not just business managers: every American is concerned with the here-and-now in a world of instant communication, easy credit, and globalized consumption.  What is needed in this country is an attitude shift: consumers ought not to spend money they lack on goods that are superfluous.  And corporations should invest their profits into their labor force (creating generous benefits and a sense of personal worth) and ensure that their products and production processes leave as positive an impact on society as possible.

            Now, regarding the bonuses of AIG employees: the CEO claims that the company needs to retain those employees who created the derivatives in order to unwind the complex deals to avoid further catastrophe.  The concern is that “talented” leadership would be drawn elsewhere in the corporate sector if bonuses were not awarded.  Furthermore, $400 million were negotiated in 2008 for Financial Products employees, and the Treasury Secretary acknowledges that AIG would face lawsuits if they did not deliver those payments. 

            How on earth could you call an executive “talented” when the government now owns an 80 percent stake in AIG and the world economy is just beginning to spot the road signs for Depressionville?  I was under the impression that salaries are performance-based; these bonuses should only be awarded when the economy rebounds in the years ahead (that should apply to Congress as well).  You know, there are probably some countries in which any person who made this large of an error would be chained to a desk with a gun pointed to his head, being forced to work until the problem was corrected; the taxpayers would not put up ransom to “retain” them.

            The rule of law is paramount in a republic, but the American people have been complacent too long in a system that is against social responsibility and against the welfare of workers.  Our society does not punish via executions or beheadings; I think asking for the taxpayers’ money back is a civilized and symbolic compromise.

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            The nearly thirteen-figure stimulus bill is not perfect, but since the pragmatists in the Senate (all four of them) took to streamlining it over the weekend, it is the best option for fixing what never should have happened in the first place.

            The package should not consist of all tax cuts, since it is doubtful that people will actually spend the money in favor of hoarding it in to weather the recession.  It should not consist of all Keynesian spending, although there should be a hefty chunk going to states to stop the hemorrhaging of funds to social services, Medicaid, transportation, education, and law enforcement.  And it should not consist solely of Democratic agenda items—like funding family planning and computerizing health records—mostly for political purposes, but also because those important issues should be considered on their own merit during regular appropriations process.

            There is some danger in allowing states to distribute funds to “shovel-ready” projects.  In a rush to create jobs by building new roads and completing McMansions and office buildings, there will be no way to ensure that those projects are part of the sustainable paradigm that Obama has pledged in other sectors.  He has talked about the importance of weatherizing homes and modernizing our energy grid, but will more roads do anything to wean us off oil or promote mass transit?   Paying for more Amtrak service is more well-suited to being environmentally-sound than paying for another lane on an interstate.  And how are we going to correct our trade deficit if we do not start pouring money into an area in which we should have a comparative advantage: research and development of renewable energy on a large scale?  Hopefully, the money to save our universities and aging infrastructure will translate into a fresh way of doing business that will create new industries and prop up exports again.

            Anyway, I am sure that the stimulus will pass despite the behavior of some Democrats and Republicans.  It seems that change, like our economic policy for the past eight years, is still a trickle-down process.  While Obama was wining, dining, pleading, convincing, cajoling and compromising with dozens of Republicans, Democrats in the House had sufficiently shut their opposition out of the process to the point of provoking a solid “nay” vote on the bill.  Meanwhile, Barbara Boxer on the Senate floor blamed Lindsey Graham (R-S.C.) and John Thune (R-S.D.) for helping George W. Bush to run the country into the ground.  Not that the Republicans behaved any better: Pete Sessions’s (R-TX) comment about learning from the Taliban how to conduct an insurgency infers that the minority party takes some pleasure in being the radical obstructionists, rather than being open-minded.

            Let’s hope that our leaders stop feigning indignation and realize that this plan is going to be carried out no matter what—and the least they could do is voice their opinions respectfully and with minimal grandstanding.

        I wonder what would it take for Virginia’s Republicans to raise the cigarette tax. It’s obvious that an increased risk for lung cancer in smokers and for heart disease among those who breathe secondhand smoke is not reason enough. Nor are the increased health care costs associated with such ailments. Maybe if cigarettes were linked to homosexuality or atheism, legislators from the Grand Old Party would put their foot down. But as it is, they are resisting the governor’s attempt to target cigarettes for a new source of revenue.
        Tobacco in Virginia dates back to the days of the Jamestown colony. And it was in 2004 that Altria Group (which owns Philip Morris) moved its headquarters from New York to Richmond, where over 6,000 are employed in the cigarette plant making Marlboros and Virginia Slims for domestic distribution.  By 2010 Richmond will be Philip Morris’s only domestic producer of cigarettes.  Consequently, Virginia has the fourth-lowest cigarette tax in the country at 30 cents, well below the national average of $1.19. Speaking of dollars and cents, it may be worth noting the that Republican gubernatorial candidate, Attorney General Robert McDonnell, has already received $15,000 from Altria; two state legislators competing for the Democratic nomination have each received $5,000. Furthermore, last year Altria gave $93,000 to Republicans (including the chairmen of the committees on finance and health in the House of Delegates) and $65,000 to Democrats in Virginia (an 18% difference).

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        Republicans say that it is unfair to single out one industry for tax increases and that jobs could be in jeopardy if cigarettes became more expensive. So let me get this straight: the governor can cut thousands of jobs in transportation, social services, the prison system, and force counties to eliminate positions or freeze salaries, but heaven forbid that the demand for cigarettes be in any way inhibited? Raising the tax by thirty cents would generate $150 million per year, which does not come close to the projected $3 billion deficit; however, it will dissuade people from smoking and reduce the state’s health care expenditures.
        And higher taxes on cigarettes are not unfair targeting, they are just another form of regulation. Carmakers must include airbags and seatbelts; gun shops must do some sort of background check. At this point, denying that secondhand smoke is not harmful is like denying that carbon emissions do no damage. We can limit where people smoke but can only attempt to regulate how much they smoke by making smoking more costly than quitting.
        It may not be fair that smokers will have to pay a little bit more, but they are disadvantaged by choice. The state has a duty to ensure the health and welfare of its citizens, and smokers are putting themselves and others at risk through their behavior. By proposing a tax raise, Governor Tim Kaine (D) is allowing the legislature to show their hand in an economic hard place: what is more important, cheap cigarettes or healthcare and education for our children?
        The Republicans may try to deny that dichotomy, but it is real. Even for a party that is appalled at the idea of any tax increase whatsoever, forcing smokers to cut down on their consumption is a lot more palatable than budget cuts to worthwhile programs statewide.

In the coming months, the individuals in thousands of governor’s offices, on county council and school boards, in the state legislatures, in Congress, and in government agencies across the country will be forced to inflict devastating cuts on their operations to close budget shortfalls, the result of a downward-spiraling economy.  Most of the cuts will not be made to “pork projects,” which the Republican ticket made sound like the magic key to balancing deficits.  While there will undoubtedly be instances of research on harbor seals and the like being put off, there will also be school systems, social agencies, infrastructure maintenance, and emergency services that will take the hit.  

But these programs are vital to the health of communities everywhere and should not be endangered for the following reason:

            In an opinion piece for The Washington Post entitled “Callousness Against Hope in D.C.”, Bryan Weaver tells of the night that a young black man was gunned down in an affluent part of the District.  Reaction to the incident ranged from the casual, “shootings happen all the time in D.C.”; to the symbolic, with officials promising to increase patrols.  But aside from spikes of indignation, the attitude of those in power for the majority of the time is probably closer to casual.  After all, Weaver notes, reports of shootings near schools got no response.  And the city is able to spend money to open roads and ease automobile congestion, but it cuts funding from recreation centers.  The comments and letters to the Post’s editor criticize Weaver for casting the issue as one of “black community” versus “white community”, but that is not the lesson at all.  He is trying to illustrate how leaders manage to avoid social reform as long as there is no outcry from affluent constituents.

            The reason, I think, lies in human nature.  We want to look at a problem and see the cause and the effects.  Then, in devising a solution, we find a way to either remove the cause or repress the effects.  The presence of traffic is caused by many people trying to travel through a particular path.  The effects include noise, car accidents, and emission of unhealthful gases.  It is relatively simple to attack this problem from both sides.  A wall could be built between residences and the road to minimize negative effects; or a subway line or extra lane could be built to give people another path on which to travel.

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            Crime is a bit more complex.  The effects of crime are easy to point out: people are killed, neighbors become uneasy, damage to property occurs, families move out of the neighborhood.  But what causes it?  The presence of bad people.  Okay, but what then causes people to be bad?  Are they born that way, or is it social?  We must think there is a certain curable element to it, or else we would not have established services like drug treatment, psychological evaluation, and parole.

            The familiar unilateral solution tries to stamp out the bad effects: citizens ask for more police.  If police are roaming, the criminals disappear; in the traffic analogy, this would be like opening a subway line and having all of those nasty car-drivers go underground.  But the world will always have criminals.  There will always be the impoverished man who needs to steal to pay his bills; the young man who needs to kill to prove himself to the gang; the teenage girl who sells crack at school to have spending money.  Affluent people need to realize that their neighborhoods are not safe because of the presence of police, but because of an absence of the desperation and lack of structure that enable criminality.

            To that end, we cannot view important institutions in troubled areas (or any area, for that matter) as mere line items when they are really investments on a safer future.  Don’t cut after-school programs that leave children free to roam the streets after the last bell.  Don’t eliminate social services workers who ensure that families are on the right track.  Don’t stall “housing first” initiatives to move homeless people into affordable housing and off the streets where they can become the victims or the perpetrators of crime.  Don’t stop giving scholarships to urban and rural students who want to have a shot at a college education.

            We cannot blame Americans for liking simple solutions, but just as drilling for more oil is not the answer to energy security, there are many steps that must be undertaken to ensure the long-run welfare of not just the needy people in our society, but of everyone who cares to notice that some people never can come close to being on top, no matter how much they try.