LC’s Commentary

Listen To The Voice of Reason

They forgot the defense budget

There were shouts of joy when the New Republicans were ushered into office in the 2010 elections. Those of the conservative persuasion felt their day had finally come and they were going to address the U.S. budget deficit problem. Sure enough, Republicans, marching to the beat of the Tea Party, came to the House with ax hand. They have been about the business with the skills of a surgeon, methodically carving up the Current year’s budget and next year’s budget as well. Of course, there are those cheering Republicans on and feel their efforts will fix what President Obama and his administration have torn up. They are very careful to make it an Obama problem-as if he has sole power over what gets in the budget.
I wonder why there is little conversation about carving up the defense budget. Why is almost every cost in the budget scrutinized, except the defense budget? What is so special, holy and untouchable about the defense budget? I guess it is because the Defense Department spends it money wisely, can account for how each dollar is spent and is not loaded down with special interest dollars-in other words, no pork at all.
People of all persuasions have questioned why the Defense Department gets a free pass during budget hearings. J. William Fulbright, Senator from Arkansas, President of the University of Arkansas, and Chairman of the powerful Senate foreign Relations Committee, and namesake of the Fulbright Educational Program made a speech titled the Myths of Foreign Policy. This speech is a must read for all who are genuinely concerned about why the US continue to pour so much money into the defense budget. Although Fulbright made the speech on April 5, 1964, his message is probably more applicable today.
J. William Fulbright hit the nail on the head when he made the following observation.
During the past 20 years, the emphasis of our public policy has been heavily weighted on the measures of common defense to the considerable neglect of the program to promote the liberty and welfare of our people. The reason for this is, of course, has been the exacting demands of two wars and an intractable cold war, which have wrought changes in the character of American life.
Of all the changes in American life brought by the cold war, the most important by far, in my opinion, has been the vast diversion of energy and resources from the creative pursuits of a civilized society to the conduct of a costly and intermediate struggle for world power.
Or to put it more precisely in our case, to negate the efforts to acquire world dominion. We have been compelled, or at least we have felt ourselves compelled, to reverse the traditional order of our national priority, relegating individual and community life to places on the scale below the expensive military and state activities that constitute our program on national security.
Senator Fulbright could very well be making the speech today. Very little has changed budget wise except the budget becomes larger almost every budget cycle. Think about the budget cuts proposed by Republicans. They are willing to sacrifice our schools, hospitals, homes, parks, and other public infrastructures vital to the happiness and welfare of US citizens, so the defense budget remains virtually unscathed.
Fulbright talked about the readiness of Americans to defer programs for their welfare and happiness in favor of costly military and extravagant space programs. He wondered what is it about the American physic that makes it so ready to sacrifice health programs, educational, programs and urban renewal programs all in the name of fully funding every need the defense department asks for.
President Eisenhower warned Americans about the dangers of the Military Industrial Complex. Fulbright had the same concerns when he made the following observation: To the extent that the American people and the Congress shrink from questioning the size and cost of our defense establishment, they are permitting military men, with their specialized viewpoint, to make political judgments of the greatest importance regarding the priorities of public policy and the allocation of public funds. The abnegation of responsibilities by the congress in this field is strikingly illustrated by debate or more actually by its non-debate on the defense budget.
In closing, Fulbright said” the first thing we must do towards raising the quality of American life is to turn some part of our thought and our creative energy away from the cold war which has engaged them for so long, back in on America itself. If we do this we may find that the most vital resources of our nation for its public happiness and security remains locked within our own frontiers, in our cities, in our countryside, in our work and in our leisure, in the hearts and minds of our people.“
What is happening today parallel what was happening when Fulbright made his speech. We are currently fighting two wars, and a cold war of a sorts-the war on terror. They are all costly endeavors and divert resources from this nation badly needed at home. It is time Americans stop letting Conservative Talk Radio, Fox News Network, slick politicians of all persuasions, defense contractors and warmongers to constantly prey on their fears. Any right-thinking people know in their hearts that there is absolutely no reason for the US to spend so much money on defense. Because of our actions toward some nations, they feel threatened; they build up their defense, which gives us excuses to spend more money for defensive purposes. It is a never-ending cycle.

March 2, 2011 Posted by | borrowing money, Economic Empowerment, Failed economic poicy, Results of war, Taxpayer bailouts, Uncategorized, World Affairs | | Leave a comment

Righting The Ship

These are extremely troublesome times. United States President Obama and his administration struggles to upright the US economic ship and at the same time set a course towards economic stability.  President Obama’s administration has opened several proactive fronts in an effort to stabilize the economy and lower the deficit.

Much of the initial costs associated with Obama’s plan is designed to right the ship. The initial TARP funds (350 billion dollars) doled out to banks in 2008 was the initial venture designed to shore up the banking industry. Congress authorized an additional 350 billion dollars available for use in 2009, if needed. Spending associated with his budgetary plans is staggering and defies most Americans ability to ascertain exactly how much money is actually involved. 

Congress, President Obama and Americans at large, struggle to make sense of the current economic quandary.  Most people are of the mindset that drastic actions must be undertaken to stave off further deterioration of our economy. The only way this nation and the world can truly fix the current economic problem is, they must define the problem in totality. Much of the conversation relating to greed, outright thievery and corruption is conspicuously missing from public discourse.  Most politicians, Republicans and Democrats continually dance around the greed, corruption and outright thievery problems facing this nation-a problem that has contributed mightily to the current situation.  One thing is perfectly clear-if this nation and the rest of the world are not willing to take on the above-mentioned problems, head-on, and untrustworthy people in positions that control our capitalistic system are not removed from the equation, the recession and possible depression will linger for the near future.

Defending President Obama’s administration current course of action without question is counter-productive and risky.  To be against everything the administration proposes-good or bad is worse-especially when most positions are carbon copies of Conservative Talk Radio.

Much of what really goes on in Washington is reserved for the privileged few.   How many of you remember when President George Bush invited Conservative Talk Radio hosts to come to the White House and have a private chat with him?  What gave them the right to information that not all American could access?  The same is true regarding the current banking system. There are the privileged few that have access to Wall Street information and data that the public will never see. This allows them to enrich themselves and their friends at the expense of other people. Access to this information allows them to make critical monetary decisions-decisions others cannot make because of denial of access to like information.

Hinton R. Helper published a book in 1857 titled the Impending crisis in the south.  In his writings, he penned the following: Never were the poorer classes of a people, and those classes so largely in the majority, and all inhabiting the same country, so basely duped, so adroitly swindled, or so damnadly outraged.  Economic Indicators suggests most Americans have been duped for a very long time.

March 26, 2009 Posted by | borrowing money, Failed economic poicy, Greed, Taxpayer bailouts | 1 Comment

Land of Plenty?

Signs of things to come

Is there hope for the hopeless? Who are the hopeless? Many people have thrown in the towel and feel there is no way out of the current economic crisis?  This hopeless feeling encompasses a wide spectrum of American society. In fact, this helpless feeling spans borders and oceans.  Many in congress are busy pointing fingers and doing little to address the current economic crisis. Entirely too many feel they are obligated to obstruct constructive dialogue and not contribute anything of substance to solving the problem. To them, everything is wrong that they do not support.

The current economic crisis produces uncertainty, suspicion and distrust, fueled by actions taken by those charged with managing Wall Street, and our banking industry. It has also produced poverty and misery. Through all of this, some have gotten rich-some riches gained by taking from others.

Many individuals, who thought they had their financial situation well in hand in 2004, now find themselves in a financial crisis. The current economic situation has a humbling affect on many people. It has brought them back to earth and made them take actions supposedly reserved for the lazy, ignorant and welfare recipients. Many have swallowed their pride and now seek social services, relief from financial obligations and outright poverty.   One only have to look at photos taken during the great depression to get a glimpse of what happens when a nation’s economic system collapse.  People in three-piece suits and nice hats in soup lines with cups in hand, trying to get a bite to eat, paints a sobering picture.  Is it possible we will see more of this in the coming months? Yes, it is possible. Fact is, soup lines are already forming in some cities.

President John F. Kennedy (1917-1963) said the following in his inaugural address: if a free society cannot help the many who are poor, it cannot save the few who are rich. President Kennedy’s remark rings loud and clear today. Many who looked down from their ivory towers and sneered at the downtrodden and less fortunate, now find themselves being one of the lowly and practically broke.  President Kennedy also made the following statement: And so, my fellow Americans, ask not what your country can do for you; ask what you can do for your country. Finally President Kennedy said: my fellow citizens of the world, ask not what America will do for you, but what we together can do for the freedom of man.  If he were alive today, he would be making the same argument. He would implore those of who have much to share with the less fortunate and down trodden. He would remind us what happens when the vast majority of a nation’s wealth is concentrated in the hands of a chosen few.  

February 13, 2009 Posted by | borrowing money, Failed economic poicy, Greed, Soup kitchens, Taxpayer bailouts, wealth redistribution | Leave a comment

Trickle down my foot

Trickle up economics

 

Who coined the following?

The essence of propaganda consists in winning over an idea so sincerely, so vitally, that in the end they succumb to it utterly and can never escape from it.

Propaganda is not an end in itself, but a means to and end. If the means achieves the end then the means is good.

Joseph Goebels, august propagandist for the Adolph Hitler regime and famed for winning over the German people with his rhetoric is the author of the remarks.  When one listens to CTR (Conservative Talk Radio) you are constantly reminded of how this nation flourished economically under the Regan administration. These talking heads constantly hammer into the heads of their avid listeners that Regan’s trickle down economics was a great success story and everyone from top to bottom gained under his administration. Great propaganda, wouldn’t you say?

CTR purposely leaves out what actually trickled down during the Regan administration. Actually something did trickle down to the middle and low income folks-misery and a widening gap between them and those that were suppose to trickle down some wealth and share some of the gains! Maybe President Regan forgot to tell the folk who were getting rich on his watch to open their pocket books and let a few dollars trickle down. As a result, the chasm between the very rich and those of the middle class and low income widened.  Little George( President George Bush II,) following in the footsteps of his father and President Regan,  not to be outdone, further loosened oversight over most agencies charged with overseeing our economic system. As a result, pandemonium in our capitalistic system has ensued. The statement, Fox guarding the henhouse comes to mind. The American people have been led to believe that the folks running our capitalistic system are good, moral and hard working folks who are just trying to make an honest living. Americans have been told that these folks need very little oversight and intervention by the government leads to unnecessary costs, bureaucracy and unnecessary meddling in private businesses.  Americans have been told about the efficiency of the private sector and how it gets things done much cheaper than the government.

My question is; if the private sector has all of the answers and everything it needs to be self-sufficient, why is it calling on the government to bail them out at taxpayers’ expense? Why can’t private businesses, needing capital, go to other private businesses and get it? The answer is simple-they want the government to stand aside and let them screw things up. They see the government as a source of capital when private entities are not willing to risk their money. 

This trickle down economics trick  might be a hard-sell to more Americans if CTR did not paint such a wonderful picture of the impact it has on this nation. The current crop of Joseph Goebels of this world (Limbaugh, Hannity, Boortz), and other talking heads have sold the American people a pig in a poke.  How in the world can they continue to paint a rosy picture of this trickle down economics way of doing business when anyone other than a blind person can see that it does not work?  CTR continues to blame organized labor for much of the ills of our economy. Never mind that there is little organize labor in the private sector. In 2007 organized labor represented only 7.5% of  the private sector workforce.   Not once have I heard them make a serious issue of greed playing a part. Greedy and unethical CEOS have made a shamble of the private sector and it appears the talking heads of CTR think what is constantly perpetrated on Americans is just fine because it is just another indication of the wealth you can amass if you work hard enough. I guess getting rich by hook and crook, including swindling people out of their life-savings is just fine as long as you work hard devising and implementing the swindle.

What we have in place now is trickle up economics. Taxpayers, footing the bill to bail out Wall Street, do not have a choice in the matter. We have been told, we are going to take your money and loan it to the banks and Wall Street. You may eventually get your money back-no assurances. Trickle up economics seems to be working just fine. The government recently trickled up 700 billions dollars taken from many have nots and passed on to many already awash in money.

February 6, 2009 Posted by | borrowing money, Conservative Talk Radio, Failed economic poicy, Greed, Hannity & Boortz, Limbaugh, Politics, Taxpayer bailouts, Trickle up economics, wealth redistribution | 1 Comment

Pay up

Sooner or later you will pay

 

I keep looking for signs indicating Obama’s election is ushering new attitudes in this nation. Sure, it is early and he has been President for less than a month. However, it is never too early to change our behavior. One thing for sure, many in the banking business, are conducting business as usual. They are still handing out large bonuses while their institutions are losing huge sums of money and asking for and getting huge sums of money from taxpayers.  Responsibility, shame and ethical behavior have been replaced with greed, insensitivity and irresponsibility.  One has to question what drives the current uncaring, insensitive and greedy behavior that is so prevalent in banking. As a matter of fact, it is prevalent in most businesses where huge amounts of money are in play. Especially discouraging and perplexing is the fact that, according to many, this nation isbuilt on a Christian foundation. This notion suggests it was built on goodness, fairness, equality and a genuine concern for one’s fellowman. As you look around can you truly say those in power in our economic system are acting as one would expect Christians to behave?  The glue that holds the foundation of this nation together is fairness. The fairness doctrine is slowly being replaced with an attitude of; I get all I can, no matter how it impacts others.

I cringe when I hear those in the banking business trying to justify handing out large bonuses while the very taxpayers they are getting bailout money from are taking cuts in pay. Of course, the talking heads on Conservative Talk Radio spend time justifying the bonuses. Why in the world do some people feel some folks deserve millions for their efforts, while other does not even deserve a livable wage?  Think about it-when a raise was proposed in the minimum wage, many on the right threw a fit. They said a raise would cause small businesses to shut their doors. What has brought on this lack of concern for those in this nation that has the least? Surely those at the top can live on a little less so those at the bottom and in the middle are not constantly squeezed out of the little they have. The latest fiasco in the banking business shows just how out of touch these folks are. Surely they did not take a minute to consider how the public feels about tax dollars being used to give them bonuses, or maybe they just didn’t give a damn about how the public feels. At some point those in the banking business will have to pay their dues. How they will pay is uncertain, but they will pay.

January 30, 2009 Posted by | borrowing money, Greed, Taxpayer bailouts, wealth redistribution | Leave a comment

Down and out

In Times Like This

In times like this, what is the right course of action? What concrete actions should be taken to get the desired results, in the shortest length of time, with the least disruptive consequences to the US economic system? What will right the economic boat? The only way to right the economic boat is to correctly ascertain what caused it to capsize in the first place.  It is difficult, if not impossible, to implement corrective actions if actions are based on false assumptions. It is akin to being off course in a plane or ship and attempting to make corrections without knowing what the correct course is in the first place.

 

It is apparent to almost anyone remotely interested in economics that our capitalistic way of doing business is in shambles. Some place a large share of the blame on the housing market meltdown and mismanagement. Others place a lot of the blame on greed and excesses in all levels of society. One thing is sure, we will never get everyone to agree what caused the problem, nor will we get everyone to agree what is the best and wisest way to fix the nation’s economic problems.

 

If we expect our way of doing business to survive, we must fix it. Propping it up is not the same as fixing it. There are signs indicating this is exactly what is happening. Some aspects of our financial system are being propped up so a segment of society will not lose a lot of their investments.  Keep in mind, much of this is being financed with borrowed money, which means debt. 

 

It is amusing to hear financial analysts lamenting about the credit market drying up, while at the same time suggesting too much credit, gotten too easily, is the root of our economic woes. People with limited knowledge of our economic system are getting a mixed message. If you go into most banks, the first thing they steer you to is some kind of borrowing program. Banks are also in the saving business and should encourage their customers to save before borrowing. Currently lending institutions are giving very low returns on their savings products. As a result, many people are reluctant to invest at such a low rate.

 

As the job market dries up and the unemployment roles grow at a staggering pace, people are going to have to make some hard decisions. Which bills will have to be neglected? What will the family sacrifice as it attempts to stay afloat until the job market improves? Will the cell phone, cable television, satellite disc, and Ipods have to go in favor of keeping a roof over their heads and food on the table?  Will college have to be put off until things get better? Will children have to be taken out of private schools and re-enrolled in public schools? Will the car have to be driven a few more years before it is traded in? There are many questions that must be asked and answered before one can truly ascertain how to go about the business of dealing with the current economic meltdown.

Some people say they are praying about it and leaving it in the hands of the Lord. I strongly suggest taking actions on your own as you pray. Prayer certainly works. However, doing something on your own works, too. In times like this, one must take advantage of every legal mean to keep the family afloat until those in charge of our economic ship uprights it.

January 25, 2009 Posted by | borrowing money, Failed economic poicy, Politics | 1 Comment

Where do we go from here

 

 

The debate continues over which businesses deserves bailouts utilizing federal tax dollars.  On the surface, it appears most of the approved bailout money is dedicated to the financial industry.  I listen with great interest to the debate over whether the American automotive industry should get an infusion of tax dollars. Thus far, automobile industry executives have not made a convincing argument before congress that garners widespread support for a bailout. The automotive industry is asking for an initial infusion of 25 billion dollars to forestall what amounts to a collapse of the industry in the United States. Will they need more bailout cash in the future-probably? However, 25 billion out of the 700 billion seems small potatoes in the whole scheme of things.  It is difficult, if not impossible to ascertain what the total negative impact of closing American automotive assembly plants will be. Declaring bankruptcy and restructuring the whole industry is not out of the question.  Automotive industry executives testified before congress and threw out some massive direct layoff numbers, along with layoffs and business losses that support assembly plants. Were automobile executives numbers skewered to present a worst-case scenario?   It is reasonable to assume they were.  Union officials are starting to talk about the issue. They are probably more concerned about the survival of the industry than the average citizen. Without a doubt, they are looking for ways to insure the survival of the US automotive industry and jobs for the workers they represent.  

What would be wrong with setting aside 10 percent of the 700 billion dollars already committed to propping up US industries who are having financial problems? What is wrong with allocating a certain amount of the money towards putting people back to work? All I hear is make the money available so people can borrow it. Is it prudent to emphasize borrowing money while ignoring the very thing that allows people to repay loans-jobs?   Without a doubt, our lending institutions need to be stabilized. However, if the job market is not given adequate and prompt attention, the US economy will continue to spiral out of control into a recession and a depression is not out of the question.

The 700 billion dollars must be allocated where it has the best and most lasting positive impact on a majority of Americans. Putting the bulk of it into financial institutes is questionable. Why? They are the very ones that created the problem. Can they be trusted to do the right thing with the 700 billion tossed into their coffers?

How often do you hear the argument that Americans do not save enough? They buy too many things on credit. Many US citizens have now lost both borrowing and repaying power. A few financial sages got their heads together and decided it was in the best interest of the banking industry to make it easier to borrow and go into debt.  To make this possible, the very people who bankers want to continue to borrow and go in debt are the very people the banking industry are borrowing the money from-taxpayers!    When will some of the sages of finances begin to speak of less risky ways to make and save money? When will they inform people of ways to save money besides risking it in the volatile and topsy-turvy stock market?   

December 2, 2008 Posted by | borrowing money, Failed economic poicy, Taxpayer bailouts, wealth redistribution | 1 Comment

Automotive Industry Bailout

HELP!

 

I view with great interest the dispute over whether taxpayers money should be used to bail out US auto manufactures.  There are two trains of thoughts that must be considered.  If you listen to and believe what conservative talk show mouth pieces have to say, contracts between automotive assembly plants and its union workers is the problem.  It is easy to blame the assembly line workers because they do make very livable wages and have benefits unavailable to many workers in other areas. If union contracts led to the financial mess the automobile manufactures find themselves in, then shops devoid of unions should be doing just fine. If one makes the argument that unions are contributing to the demise of US manufacturing jobs, then unions loss of representation of workers should be offset by an increase in jobs remaining in, and returning to the US. Statistics does not support this logic. The business model many US businesses are following is what is causing the loss of many jobs in the US.

According to the US Bureau of Labor Statistics, in 2007, Union members accounted for 12.1 percent of employed wage and salary workers, essentially unchanged from 12.0 percent in 2006.  In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent. If my math is correct, workers with union representation has dropped by 8 percent since 1983.  

You may be surprised to know that most union workers are in the public sector, not in the private sector.  The union membership rate for public sector workers (35.9 percent) was substantially higher than for private industry workers (7.5 percent).Within the public sector; local government workers had the highest union membership rate, 41.8 percent.  This group includes many workers in several heavily unionized occupations, such as teachers, police officers, and firefighters.  Private sector industries with high unionization rates include Transportation and utilities (22.1 percent), telecommunications (19.7 per-cent), and construction (13.9 percent).  In 2007, unionization rates were relatively low in agriculture and related industries (1.5 percent) and in financial activities (2.0 percent). Private sector jobs, the ones less represented by unions are the ones going overseas. Thus the argument that unions with their outrageous wage and benefit packages are bankrupting this country and forcing companies to move their manufacturing base overseas is unfounded. Organized labor must take a realistic approach to this thing called fair and livable wages.  It makes little sense to demand high wages and suddenly find yourself or fellow-workers unemployed. An old adage say; I would rather be working for 10 dollars an hour, than be worth 15 dollars an hour unemployed. Management certainly bears a lot of the blame. The mere fact that top management is paid such huge salaries and has unimaginable perks makes it very difficult to persuade workers that companies cannot continue to pay what workers are earning.

The second very important thing this nation must consider is the impact of not having strong, dependable and viable vehicle manufacturing capabilities in the United States. Let us not forget we are currently fighting two wars. Surely these automotive companies are building things for the military. Are we to depend on China, Japan, Mexico and other lesser known countries to supply our military ground transport needs? Are we to depend on other nations to manufacture and provide vehicles necessary to deliver products in America? One must not forget we have approximately 500,000 troops abroad, including sailors at sea, and stationed on 750 plus overseas bases.

November 21, 2008 Posted by | borrowing money, Taxpayer bailouts, Uncategorized, wealth redistribution | Leave a comment

Going down with the ship

Are you one of the unlucky ones

 

The mortgage crisis continues to deepen. It ensnares more people on a daily basis.  Talking heads are busy trying to place the blame on several factors. Some see borrowers as the prime reason we are in this mess.  Others see lenders, speculators and others trying to make a quick buck as the prime perpetrators.  Borrowers certainly share some of the blame by borrowing beyond their capacity to pay. Lenders are to blame for letting people have loans who were not financially able to repay.  Mortgage companies and others that underwrite loans are to blame for the constant barrage of literature and media blitz promoting the availability of easy credit and creative ways of qualifying for a loan.  

Now that we are in this mess, people of all walks of life need to step back and assess the way they are spending their money. People need to understand that things will not get better for a very long time. How long is anyone’s guess. Do not believe for one minute that talking heads on television and radio have a clue when things will get better. These folks make a good living making predictions and are usually optimistic about the future of our economy. Less than six months ago some were bragging about how great the economy was and the number of new jobs being created.  The head of the Federal Reserve was before a senate hearing last week and he did not have a clue of when this thing would right itself. If he, the head of the Federal Reserve, with a staff of seasoned financial thinkers do not have a clue when things will get better, why think for one minute that Limbaugh and Hannity know what they are talking about.

What can individuals do to soften the blow of the downturn in our economy and the impact of the housing market meltdown? For starters, people can rethink what they have to have. They need to assess how much nice to have, but unnecessary things cost. For instance-how much does a cell phone cost? How much does a wide screen LCD television cost? How much does a cable and satellite television subscription cost?  How much do 22 inch tires and rims add to the cost of an Escalade? How much does a trip to the casino cost?

Once these costs are verified, one needs to decide which ones are not essential and do away with them.

One must also pay attention to how much the cost of essential (must have commodities) are increasing. The huge increase in the cost of petroleum products is having a huge negative impact on many families. Most of us have to have them to get to work, cook our food and warm and cool our homes. Do not forget the impact it is having on airline, bus and train travel. Public Works and Public Safety infrastructures have seen large increases in their fuel bills. School systems have not been exempt from large increases in their fuel bills. Who will pay for these increases? Local tax payers will pay for them. Many feel they are already overtaxed and are reluctant to accept tax increases for any purpose.   

Folks, I am telling you, you had better reprioritize your spending. Stay away from the casinos. Stop playing so many Scratch Offs and daily and weekly lotteries. Drive your car a few years longer. Do what ever you can to keep more of your hard earned money. Go back to your roots and plant a small vegetables patch if you have the space. The price of food has gone through the roof and will only go higher. While you are at it, impress on our children the need to moderate their demand on you for unnecessary electronic toys and expensive clothing. Although the economic storm is raging, we have no choice but to ride it out.

April 16, 2008 Posted by | borrowing money, Failed economic poicy, wealth redistribution | Leave a comment