In the immortal words of Buffalo Springfield, "Nobody's right if everybody's wrong." Impeccable logic out of the mouths of hippies and young rockers.

I've been watching Occupy Wall Street with something akin to nostalgia. I can't help it; I was in elementary school during the height of the Vietnam War and the Hippie movement, and this new phenomenon feels so much like childhood memories. It might help that I have experienced both strictly through the TV, given that I was too young to participate back then and too sick to participate today.

I've also been enjoying the reporting by mystified pundits who are mostly badly misunderstanding the whole thing. Unfortunately, I've been far less cheered by the ugly conversations that have sprung up around this event, especially those that start with comparisons and contrasts of OWS to the Tea Party.

The comparisons of OWS to the Tea Party are at the same time exactly on target and dead wrong.

They are on target in the sense that both groups came together and rose up with the same energy and the same frustration with the system. The thousands of people showing up at the Tea Party rallies in 2009 felt the same way the people on Wall Street feel today. When arguing against each other, those who are against OWS and those who are against the Tea Party need to recognize and admit this much, or they will just end up saying ridiculous things without any clue how ridiculous and off-base they are.

They are dead wrong because of a clear distinction that most of the main stream media, not to mention Fox, MSNBC, etc. are totally missing. Tea Party members don't like to admit it, because they want to somehow be seen as distinct from the GOP rather than as a faction within it, but thanks to their beginning right after the end of the 2008 presidential campaign, the people who were frustrated at that moment were largely those who had also voted for either McCain or Bob Barr or Ron Paul, or would have, had they gone to the polls.

Yes, these people were as mad at the establishment GOP as they were at the Dems, but they were still people who would lean Republican, so it was inevitable that they would see reforming the GOP as the path to reforming the Federal Government.

(Many Tea Partiers claim that there are ex-Dems in their ranks too, and I don't doubt them. I suspect there are fewer than there were in the past though, because I personally know a couple one-time Hillary Clinton supporters who were involved early on. They got out later when the Tea Party / GOP alignment solidified and the actual politics of the Tea Party became clearer.)

I have not only watched and read the news about OWS, I've searched out people posting, blogging and conversing who are actual participants. (Digital mobility is an amazing thing, isn't it?) I feel confident in my belief that OWS does not have a similar Democratic alignment.

Yes, there are a lot of clearly Leftist types scattered throughout, and they may be generally more inclined toward the Left than the Right as a group, but from all indications I have seen, they are far less homogenous. There are also people promoting Libertarian ideas standing next to them, as well as people promoting ideas much farther into the Socialist domain than any Democrat would be comfortable around. All in all, the occupiers have common ground only in the idea that the Government and the Financial sector are out of control , unaccountable to anyone and colluding to crush democracy and freedom.

Most significantly, contrary to the claims of right wing radio, Fox News, and many Tea Party posters, I have seen no evidence at all that what these people are demanding is a free ride and a welfare state. The two things I do see demanded more often than anything else are a) jobs and b) prosecution of those responsible for the Financial crisis.

Given the failure of the Obama administration to prosecute anyone on Wall Street and the delay in focusing on jobs, I don't really see these people being the 'Anti Tea Party', supporting Obama and opposing the GOP, the way many pundits on the Left seem to imagine, and given how peaceful they have kept the demonstrations (despite elements of the NYPD's best effort at trying to provoke them into violence), I definitely don't see them being the 'rabble' and 'human debris' that pundits on the Right have called them.

 

"I do not think it means what you think it means."

Yes, I know that this quote outs me as a hopeless Princess Bride wonk, but not only is Inigo Montoya one of my all-time favorite movie characters, his words are an appropriate place to start this article.

I suffered a severe case of face-palm damage the other day while standing in a check-out line. I nearly broke my own nose when a senior citizen behind me fussed to her companion, "Those damn Democrats better not mess with my Medicare or Social Security! They need to cut some of their d--ned entitlements instead!"

Does anyone in this country know what "Entitlements" are, anymore? Have we all come to believe that word means welfare and giving money to people so they won't work? Have the talking heads on cable news and talk radio finally convinced everyone that half this country really does mooch off the other half?

Do me a favor. Imagine what you think the average recipient of "Entitlements" is. Let's see how well your imagination matches up with reality.

While you are doing so, let me explain why the politicians and the chattering idiots on the air can get away with using that word without angering the very people who are receiving "Entitlements". It's very simple; there is no such word in the Federal Budget. There is no line item we can easily cut for "Entitlements", just as surely as there is no line item for "Fraud and Waste", or for "Earmarks". You won't find the budget for any of these things.

In the case of Entitlements, you won't even find a consensus on what it means, exactly. Different people are thinking different things. Just like a politician can support "Family Values" or "Traditional Morals" and safely let different audiences imagine different things, never explaining what he means, the same politician can rail against Entitlements and let the audience believe he is talking about cutting the same things they want cut.

Many readers, when I asked them to imagine the average recipient of "Entitlements", will have imagined a welfare mother, perhaps with some of her children born solely to expand her "paycheck". This point of view is constantly reinforced on the Right by commentators and politicians through use of the term "culture of entitlement", which the above readers will understand in a quite different way than the term is intended to mean. For them, the "culture of entitlement" is the culture of minorities in the United States, supposedly brought up to believe they are owed everything from Society in return for nothing on their own part.

Ironically, many of the people whom they are imagining this way would be shocked at the suggestion that they expected anything else from Society than a metaphorical knife in the back.

(For those who care, the term “culture of entitlement” is properly intended to describe a culture that believes certain things should be provided free of charge to everyone. What things these might be, varies by culture; arguably, the great majority of Americans who believe Education is such an Entitlement are therefore part of a culture of entitlement.)

Entitlements. You keep using that word. I do not think it means what you think it means.

As I said, there is no line item in the Federal budget that says "Entitlements". But, even if we include Welfare programs in the list of "Entitlements", the 2010 budget Entitlement items were as follows (source: http://www.usgovernmentspending.com/):

6.6 Billion Workers Compensation

108.4 Billion Veterans Benefits <- Includes VA and Pensions

119.9 Billion Federal Retirement

160.1 Billion Unemployment

330.7 Billion Medicaid and other 'welfare' healthcare programs

336.6 Billion Welfare other than Healthcare, Unemployment or Workman's Comp.

451.6 Billion Medicare

706.7 Billion Social Security (minus 77.0 Billion in employer payments)

Perhaps you are surprised to see that the two largest "Entitlements", the Entitlements that constitute more than half the total and incidentally, the ones that are expanding at the fastest rate and threatening to break the Federal budget, are the same Medicare and Social Security the nice lady didn't want the politicians touching. Furthermore, at least a third of the remainder are not 'Welfare' as most people understand it but other retirement programs and insurance policies: Workers Compensation, Unemployment Insurance, Veterans Benefits, and Federal Employee retirement.

So, cut all "entitlements" many consider "welfare", and we haven't even paid for Social Security yet. We have barely made a dent in the budget deficit.

I most certainly have an opinion as to what we should and shouldn't do to address the budget deficit, but I will withhold it here. I didn't write this article to discuss this or persuade anyone to my point of view. I simply do not believe we will solve the problems we face as a nation until far more of us begin to understand what the word "Entitlements" means. Perhaps, until our politicians and commentators stop using it to whitewash what it is they are really talking about. Right now, I do not think it means what the majority thinks it means, and that is the very source of our political problems these days.
 

Let’s talk about the real problem, shall we?

Lately, our national body politic has become largely fixated on the soaring budget deficit and what awful consequences it will have in the imminent future. I do not in any way dispute the gravity of this problem, but I almost without fail disagree with the solutions that the people on TV offer.

The reason I disagree is the other deficit, the one that gets effectively no air time at all. You may not be aware of this other deficit, because very few people seem to know it exists. The horror of it is, this other deficit is the very reason that we have the budget deficit, year by year piling more and more on to our national debt.

I'm writing about the honesty deficit. Politicos, pencil-pushers and members of the press (including those commentators who claim when caught in breaches of journalistic ethics that they are entertainers, not journalists) are collectively failing to muster sufficient honesty to back up their expenditure of claims.

It may be that you thought you knew this, but what far too many Americans believe is a badly inaccurate but similar claim: 'All of the politicos, pencil-pushers and members of the press are dishonest, except for MY guys, who are telling it like it is!'

No. Unless you are a very rare individual indeed, this is almost certainly not true. I can say this because Democrats and Republicans alike, whether moderate or radical, whether progressive or conservative or Tea Party or whatever, are all failing to honestly tell the whole story.

To illustrate, I will use the budget deficit.

If the numbers for the current fiscal year were final, as they would be in a sanely-run superpower, I could use them, but unless I am to use guesstimates, I must go back to FY 2010 (the fiscal year that ended in September of 2010.)

For the record: most of the following numbers come from a web site called http://www.usgovernmentspending.com/ and its sister site http://www.usgovernmentrevenue.com/ because they are far easier to get data out of than trying to tackle the various documents available from the OMB, the CBO and the Treasury Department. However, I've spot checked specific line items and so far I haven't found any questionable numbers.

In FY2010, the Federal government paid the following sums for these five categories:

Pension payments: $749.6B <- This is net, after all the juggling and pencil sharpening. Lion’s share is monthly SS checks. Also includes Fed Employees pensions, etc. Military pensions covered under ‘Veterans’ below.

Medicare payments: $451.6B <- (Same contortionist issues as for ‘Pensions’.)

Veterans: $108.4B <- nearly $100B is simply pensions and medical benefits.

Defense: $693.6B <- Active US Military only. No foreign military aid.

Debt Service: $196.2B <- This is the interest paid on all that debt. This is not negotiable; we pay it or our bonds default.

This is a total of $2199.4B. However, the Federal revenue is only $2162.7B (in the form of Income Tax $1090B, SS/Med taxes $864.8B, and other revenue of $207.9B) which means by the time we were done paying for these five things, we were already into deficit spending. We hadn’t yet paid for other things which cannot be dropped without courting disaster, such as:

Air Transportation: $21.4B <- Mostly the FAA, air traffic control, etc.

Water Transportation: $9.4B <- This is mostly the Coast Guard.

Federal Law Enforcement: $27.9B <- FBI, DEA, etc.

Federal Courts: $17.9B <- Judges and bailiffs don't work for free.

Federal Penitentiaries: $7.7B <- Letting Zacarias Moussaoui and Ted Kaczynski go free would be bad.

…nor had we yet paid for an IRS to collect that $2162.7B in revenue! ($12.1B. Note that I was unable to work this number out from the aforementioned web site but I found it in an old news release. It was for FY 2010 as the rest of the data.)

Now, what we have here is the ultimate lean budget (in terms of budgets that do not cut things people currently will not allow us to cut). It slashes to zero many items that few people call ‘wasteful spending’, because it includes no funds for highways, railroad safety, national medical agencies like the Centers for Disease Control, etc., not even essential national functions like the issuance of passports, the printing of federal documents, checks and bills, and the operation of US embassies abroad. Yet, even doing away with these, we are now spending $2283.3B, without paying for so much as one welfare queen, benefit-collecting illegal alien or pork-laden ‘Bridge to Nowhere’.

We also haven’t paid any salaries to Congress, nor the White House, nor to any Federal employees except those of the Defense Department, Justice Department and IRS (not sure how those Social Security checks are getting mailed out; the ‘pensions’ item didn’t include the administrative costs of social security benefits.)

The point is, we were into deficit spending before we paid one single cent for any of the items that politicians and talking heads on radio and cable news stations claim to be the reason we have a deficit! We are borrowing money long before we get to the things you thought were the problem. To be specific, we have not yet funded any of the following:

TARP and other bailouts (and ironically, in FY2010 this is a plus, not a minus, because the money paid back outnumbered the money going out by over $85B.)

Unemployment Benefits

Workman’s Compensation

Welfare (including medical and public health services)

Federal Housing

Foreign Aid

Research (all those weird federal grants?)

Education

Agriculture

Energy

Pollution Control

Housing Subsidies

Conservation

Federal Parks

And, perhaps biggest of all, so-called ‘Obamacare’, because it was not even passed into law yet in FY2010, so it does not figure into these numbers.

Yes, the cost of two wars is a significant adder, but the equivalent Defense line was $304.8B in 2001 dollars (before Afghanistan or Iraq) which is $378.3B in 2010 dollars. Even if we could magically end both wars immediately, with no transition costs (not actually possible), we would still only get back $315.3B. With this adjustment, we still have only $194.7B to pay for all the above remaining items before we begin to borrow again. Currently they add up to more than a trillion, so while we can certainly reduce the deficit by cutting every cent of Agricultural subsidy or Welfare, we cannot get rid of the deficit this way.

Get it yet? The politicians and the cable channel chatterboxes are not telling you the truth. It makes not one jot of difference whether they are on MSNBC or Fox, whether they are Tax-and-Spend Democrats or Borrow-and-Spend Republicans, First Termers or Long Termers, Beltway insiders or outsiders. Nearly every one of them to a person purposefully and unashamedly lies to you and does so without any concern for the damage their pursuit of personal power and prestige is doing to our nation and our future.

Yes, there are exceptions. No, they are far fewer than you think. And I’m sorry, but they almost certainly do not include that one particular name that came to your mind as the one person you could trust no matter how bad the others might be, because the most popular of these people on both sides of the aisle tend to be the ones who excel at the art of selling their audience a load of deception.

Does it sound like I am saying we just can't do anything, our hands are tied? Or perhaps I am being Paul Ryan, saying we can only fix this thing by taking away future Medicare from anyone currently less than 55 years old (but making them continue to pay the Medicare tax to support those 55 and up, who keep the benefit for life. Gee thanks.)

No, I am not saying this. These claims present a false choice between deficit spending or cutting entitlements. Attention, America! These are not our only options.

I said above that the Honesty Deficit caused the Budget Deficit. Look at the numbers I gave you above once again. Which number more than any other doesn't fit with the rest?

It's very simple. Our deficit does not come from Federal spending (although we certainly find ways to make it a larger deficit through foolish choices.) Our deficit comes from our failure to pay enough in taxes.

I have no doubt you believe you pay too much in taxes, and it is possible that you do. I have no doubt some people actually do pay too much. However, since it is easy to prove that our nation as a whole pays considerably less than a reasonable amount as a member of the industrialized world, I think the odds are against you.

How can I prove this? I simply compare how much we pay to how much everyone else pays.

The data I will cite comes from the Organization for Economic Cooperation and Development. This is not some obscure think-tank or front for some other entity; it is an inter-governmental agency which includes in its membership the United States and most European countries.

We measure tax load by calculating the total amount the nation's taxpayers pay as a percentage of gross domestic product. So that we are not comparing apples and oranges, the OECD's tax data for the United States includes both the revenue of the Federal government and the revenue of all state and local taxing entities, as does the data for other countries that have taxing entities besides their national governments.

Critics of this metric claim that it isn't fair because it includes capital gains tax when capital gains are not included in the GDP. This criticism is smoke and mirrors, utterly irrelevant to the question. Even if the taxing entities assessed the taxes according to one's blood pressure and the sum of all chipmunks on one's property, the only thing that matters is how much load those taxes put on the domestic economy. The GDP is the normally accepted measure of the domestic economy.

Some politicos have made crazy statements as of late, such as 'we have the highest corporate income tax rate in the world!' (I seriously doubt this is accurate; I couldn't find data to confirm or debunk it, but OECD data shows that almost all the other OECD countries raise considerably more in corporate taxes as a percentage of GDP than we do. ) These claims lead Americans to believe they are living in Taxation Hell.

To my mind, Tax Hell is actually in Denmark, where (as of 2009, the most recent year for which I could access OECD numbers while writing this) taxes totaled 48.2 percent of GDP! Compared to that, we Americans have it easy, paying a mere 24 percent of GDP.

"Yes, but Denmark is a socialist welfare state! Of course it has double our tax load!"

I agree with that statement without reservation. What I find alarming is the sheer number of other nations that appear on the list below Denmark, but ahead of the US.

Sweden, the next on the list, is no surprise, but some of the others are: Italy, Belgium, Finland, Austria, France, Norway, Hungary, Slovenia, Luxembourg, Germany, Czech Republic, United Kingdom, Iceland, Israel, Canada, New Zealand, Spain, Switzerland, Greece, Slovak Republic, Ireland, Korea, and Turkey.

Yup. I said Turkey.

Twenty five members of the OECD have higher total tax loads on their GDP than ours. Yes, several of these are also so-called 'welfare states' (see France and Canada.) But the one country that stands out the most in my eyes is Germany, with a 37 percent of GDP tax load. Germans as a group pay half again more in taxes than we pay, yet they are one of the most dynamic capitalist nations in the world. So much for raising taxes killing the economy.

Who are the countries below the US on the list, the countries already living in the tax paradise that Paul Ryan is shooting for?

Only Chile and Mexico have lower tax loads than the US. What a crowd to aspire to.

At the time I was writing this, the OECD data I was referencing did not yet include 2009 data for Portugal, Poland, The Netherlands, Japan or Australia. To include them, we go back to 2008. Thanks to our economic woes that year, we paid 26.1 percent of GDP in taxes, so we moved above Turkey. Only Mexico and Chile paid less than Turkey. Every single nation missing from 2009 is above us on the 2008 list, even Japan, although Japan, with the economy that seems to me the most similar to our own, has only a few percentage points higher tax load than us. They have a national debt worse than ours, by the way. Ours is only roughly equal to our GDP. Theirs is over double their GDP.

Because the database I consulted included a calculation for the same ratio for all members of the OECD (meaning all the countries I've mentioned above) we can see that the average tax load for 2008 is 34.8 percent. This is again much higher than what we pay. It is about a percentage point less than what the folks in the UK pay, and two and a half points less than what Germany pays.

Face it, America. We are NOT taxed too high. Perhaps some individuals are, but in the collective, we are way below the curve.

Somebody isn't paying their share. You probably already think you know who, although your answer depends upon your political leanings. One side says it's the bottom 50 percent of earners, who pay nearly no taxes. The other side says it's the top 1 percent of earners who earn as much as a quarter of all income. Considering that multiple studies have established that the bottom fifty percent of US earners earn between 12 and 15 percent of the total earnings, I personally doubt that they are at fault. Even if you could tax them at a rate of 100 percent of earnings, you would not eliminate the budget deficit.

I don't blame the rich either, except in the sense that I include them when I blame all of us. I feel fairly confident that we could all get by with tax rates ten percent higher than now (which would put us somewhere near the OECD average), while trimming off a few hundred billion from our budget. The resulting budget surplus would be the most debt-reducing, anti-inflationary, pro-Social-Security-and-Medicare-and-other-social-safety-net, fiscally responsible thing we could do. What makes me confident? The fact that so many highly successful economies are already taxing to those levels.

Yes absolutely, it would hurt in the short run. We would go through another belt-tightening period just like the so-called 'Great Recession' we now claim to be recovering from, despite still having nearly 9% unemployment. But it would hurt a lot less than letting our currency descend into hyper-inflation and our government become unable to borrow the funds to cover the deficit. That scenario, which many think we are now headed toward, would make the 'Great Recession' seem like the good old days.

Let's eliminate the real deficit starting today. Let's be honest and stop spouting crap about cutting spending when everyone who wants to cut spending would howl like a mad dog if the real budget busters were cut. We should continue to sniff out the bridges to nowhere and the corporate welfare giveaways, continue to seek more efficient ways to do things and continue to track down tax cheats, but let's be honest. Those things are not the problem. We Americans and our addiction to tax cuts and Reagan-era rhetoric are the problem.

 

I know the line is usually quoted as "The Emperor isn't wearing any clothes!" (which isn't right either) but this conjures up storybook illustrations of the monarch parading down the street in his underwear. Frankly, Mr. Andersen never mentioned tighty-whities.

Did you know that we have an emperor in America? His name is Public Opinion, and tricksters behind the throne are constantly whispering things into his ear to mislead him. No, I'm not talking about the news media. They're part of the process of course, and none of them are guiltless, even the ones that make a point of constantly telling you how unbiased they are, but much of the time, they are only guilty of acting as a mouthpiece rather than reporting. They don't delve into the facts at all, they simply present what each side claims the facts to be. In fact, far too often they give more coverage to what a particular side alleges the other side says or does than to what the other side actually said or did.

During a televised debate during the 1994 Senate campaign, incumbent Daniel Patrick Moynihan informed challenger Bernadette Castro, "You’re entitled to your own opinions. You’re not entitled to your own facts." It is no surprise that these days, this has become a very oft-quoted phrase.

When I watch both MSNBC and Fox News Channel on the same day, I discover that they have contradictory "facts" on virtually every issue. In fact, if the names of the players weren't the same, I could almost imagine they were reporting on two entirely different countries. These nations do have one thing in common; in the middle of hard times, an elitist minority in control of the government is hell-bent on defying the will of the people and making things worse. Oddly, in one nation the elitist minority holds the Presidency, while in the other it does not, and yet, somehow the two have arrived at the same impasse.

Both sides override Moynihan's Law by invoking Adam Savage's Dictum: "I reject your reality and substitute my own!" Perhaps in older days the press might have pounced on politicians who played loosely with their facts, but today news outlets focus on which side is winning, as if covering a football game rather than events impacting the lives of millions.

By reporting on each development primarily in terms of how it will effect the standings of the players rather than the fortunes of their viewers, the news media has no need for the facts either. They will go into great detail on 'facts' about what percentages of the public believe which sound byte, yet they will take little time to actually delve into even those items which they could easily research and simply present the facts on.

The reason this happens is very clear; if the big question for the reporters is "which side is winning?" then the facts simply don't matter. Only our perception of the facts matters. Once one side has caught his ear long enough to override the other, Emperor Public Opinion makes his arbitrary law heedless of Constitution or Reality.

The end game for this process is obvious. The managers of the media outlets, seeing how the two major political parties could manipulate their reporters with impunity, choose which side they want given preference and staff their organizations with the reporters who give their side preference. The public, now confronted with two neatly divided and irreconcilable bodies of fact, simply shrugs and picks which version to accept. As a consequence of this, Public Opinion now marches down the street draped in nothing but vapor and fantasy.

I doubt I will ever unearth solid, incontrovertible evidence that this has happened, but circumstantial evidence abounds, and one can easily find it. Just ask proponents on each side how they know the other side is biased, and they have evidence in volumes to present. Much of it is trivial viewed on its own, but the sheer quantity is troubling. At some point, I may try to list some of the stronger items, but today I will only present what I see as the single most eyebrow-raising item, the one that shows clearly how the manipulation can begin.

(If I am starting in on one of your heroes, please don't take offense. I am an equal opportunity iconoclast; I'll spend time on your villains soon enough. As an independent who more often than not votes for the Libertarian candidate, I don't have a dog in this fight.)

In 1996, Roger Ailes, the president of NBC's cable channel America's Talking, a short-lived venture modeled after talk radio, and past president of CNBC, left NBC to start a new cable news channel for News Corporation.

Sounds reasonable, that News Corp would choose a man with news experience to start up a news channel doesn't it? However, the great majority of his career up until then had been politics, not news. After learning the TV production trade on The Mike Douglas Show, during which he met Richard Nixon, Mr.Ailes became a 'Media Consultant' for Republicans, running the TV wings of the presidential campaigns of Nixon, Reagan and the senior Bush, as well as many Republican candidates for less offices. He announced his exit from politics in 1992, but by this time he was Executive Producer for Rush Limbaugh's television show. His first job as a member of the official new media was at the top, as the president of CNBC.

In other words, he had absolutely no experience in reporting the news at all. The little experience he had in that industry was experience at telling the reporters what to do.

If you've never heard of America's Talking, it's probably because it was very short-lived. Roger Ailes didn't so much jump ship as get pushed overboard. He went over to News Corp, taking 89 fellow NBC employees with him, after seeing the parent company ax the channel they had put a couple years of their life into building, when NBC canceled and replaced it with the new MS-NBC, originally a joint venture of NBC and Microsoft.

So now we can speculate fairly safely on how the never-ending feud between Fox News Channel and MSNBC got started. It was built in from the very start. I have a very strong suspicion that much of our current political situation began the day NBC pulled the rug out from under Roger Ailes's creation.

I know that for this introductory column, I've stated many generalizations and not very many specifics. My purpose today is not to prove anything, but simply to set my course. My goal is to spotlight the falsehoods behind a few fundamental public beliefs that are driving our political system into chaos. I'm talking not about pros and cons of political proposals or the philosophies behind them or the conspiracy theories involving some historic event or another, but the simple assumptions that public figures and newsmen depend upon us to believe so that they have a starting point upon which to work to mold our views.

It would not surprise me if the reader doesn't know what I'm talking about. Despite the greatest blossoming of information access in history, our nation may today be more misinformed than ever before. I have very little power to overcome this problem, and I do not doubt at all that I am as misinformed on as many subjects as the next American, but I would like to tilt at this windmill anyhow. The worst I can do is get smacked in the face with green energy, which would hurt nobody but myself, so I'm going for it.

If I can have any effect, then what I hope I can do is increase the number of Americans who realize that something a lot more fundamental and important is going wrong than the surface issues that most Americans are worrying about today. I don't pine for the good old days, because they never existed. Things seemed brighter and better in our youths because we ourselves were young and innocent then, not because the times were in reality any better. I pine for the future we used to have, and I want it back, for 'ourselves and our posterity' as it was once put.

I watched a man walk on the moon when I was barely old enough to stay up that late to watch it (in fact, I think that might have been the first time I was allowed to stay up to 11.) Yet the last man to walk on the moon left his last footprint on it when I was younger than my younger son is today.

It's not our space program that I am concerned about, it's the nation behind it. In those days, we went from a president making a speech to a walk on the moon in eight years and two months. Today we have a manned space program about to end after having flown for more than a decade longer than it was ever intended to fly (the Space Shuttle), with its successor program on the verge of cancellation as 'over budget, behind schedule and lacking innovation' in the President's words, and our only ability in the near future of traveling to space will be hitchhiking on Russian rockets.

The Presidential speech launching the Constellation program happened on January 14, 2004, and on Apollo's time line we would be preparing to fly our first manned mission and only two years away from walking on the moon again. Instead, all we have is one unmanned flight of the booster rocket, a few system tests and a revised schedule now promising the first manned mission (only as far as low Earth orbit) by 2015. The moon apparently can't be reached for an additional five years after that. In the same length of time after Kennedy's speech, we had done Mercury, Gemini, Apollo, and Skylab, and we had already done glide tests on a prototype Space Shuttle, with manned shuttle flights to space only a few years down the road.

What has happened to our future, or more specifically to our ability to make our future? Here's what I think: we've traded clear visions, like the need to keep our nation at the forefront and not surrender that position to the Soviets, or the need to conquer age-old wrongs like generational poverty and racism, for cloudy, dark visions painted by people whose only real desire is to hold the reigns of power.

Stay tuned, and if I can, I'll have you seeing that foolish monarch walking butt-naked down the street eventually. Maybe we can work together to get the old coot to put on a decent suit made of Reality.

 

Ulteriorly Motivated, my abortive first attempt at a political column disguised as my WDC blog page, died a slow painful death shortly after the 2008 elections. I had a half-written article about President Obama and how, despite the fact I did not vote for him (my vote went to Bob Barr) I was glad that he won. I thought it was wonderful that never again could anyone tell a young African-American that he or she could never become President of the United States.

My health was already sliding downhill during the 2008 race, and became gradually worse until it was on good days at best similar to that of my eighty-one-year-old father. By November 2008, I had to spend the little time I could do more than lay in the bed and suffer logging in to my work from home so I could continue to support my family. Most of the work I have done since then has been in bed with my laptop perched on my stomach. That article never got written, and I never added another entry to Ulteriorly Motivated.

I still think the 2008 presidential election results are a good thing, but my positive outlook in almost every other respect about the future of American Politics has been blasted into the Stone Age by the disgusting reaction of half the nation that began before President Obama even took the oath of office. I received my very first forwarded email spreading the Birther "Controversy" in my inbox the morning after the election and it hasn't slowed down since.

Forget whatever proof or evidence you might think you have on the subject; I don't want to hear it. Reality is, the 'controversy' was invented by Racists who know they can't be publicly against Obama because he is black. Instead, they invented this alternative reason he can't really be the president, citing evidence he 'never provided' with supposed proof that what he has provided wasn't sufficient.

The controversy has had many twists and turns, some of them hilariously ironic. The greatest is that President Obama won the election against someone whose legitimacy to be president really could have been legitimately challenged. Despite what you might have heard or learned as a child, it never actually has been established in court that a person born overseas on a US military base really was a 'Natural Born America', nor has it been established that someone born in a place which is no longer territory of the US (the Canal Zone) fit that description, so it wasn't necessarily clear that John McCain could actual be president.

Another irony also hailed from Arizona, where the state legislature voted to require proof that one was really born in America. They specifically allowed a number of different choices of valid proof, but specifically forbade the short form birth certificate. Apparently nobody in the legislature was aware that Arizona no longer issues the long form birth certificate! Faced with harsh ridicule on the subject, the governor was forced to veto the bill.

Where Birtherism didn't work as code for "I don't want no black president", they began claiming that Obama is a Muslim. This is also code for "not one of us" and apparently intended to make him even less legitimate, despite the Constitution specifically forbidding religious tests for office. Or they claim he didn't really attend Harvard (despite ample proof including plenty of footage of a college-age Obama in his role as president of the Harvard Law Review) or that he did this, that or the other thing in Chicago. Or that he hates his country. (How could that be possible? America is one of the few nations in the world where mixed-race people like Obama can feel at home and probably the only country where one could have been elected President!)

It gets silly from there. The idea that he is trying to establish a hard Left, soviet socialist style republic in the US is farcical; the far Left wing of his party hates him; Ralph Nader is openly trying to get someone to go after him in the Democratic Primaries. The idea that he is slavishly serving the Unions in return for their support is also ridiculous; they have been screaming for a couple years now for him to give them more than lip service. The whole Teachers Union vs. Scott Walker has passed by with him hardly setting foot in the state of Wisconsin.

And there has been the simply strange and misinformed. For example, the claim that he is the first President to bow to the Japanese Emperor in greeting. The first President to do this was Richard Nixon, not Barack Obama. Or the claim that he is not a 'natural born citizen' of the US because his father was Kenyan, making him a dual citizen. This howler of a 'rule' would disqualify not only Barack Obama but also Andrew Jackson, James Buchanan, Chester Arthur and Herbert Hoover. Some historians would also include Thomas Jefferson and Andrew Johnson.

Leaving all this aside, I have become completely despondent over any possibility the Republicans will ever come back to reality. Their divisive tactics and power-is-the-only-goal methods have become even more damaging to the US government than the worst Liberal policy ever to come out of the Democratic party. And even my favorite party, the Libertarians, have been tricked from time-to-time into repeating their nonsense.

I've been trying since the beginning of 2010 to get back into writing, and since the beginning of this year, when some changes to my medication partially reversed the decline, I've began paying more attention to my studies of politics and economics. I'm now preparing to go into much harsher treatment, with the hope it will in the end put me back in good health, at least back to the sort of health a fifty-year-old can reasonably expect. I hope I can begin writing more. I've made a few first steps with my column The Iconoclast's Review   Although I am not planning to continue Ulteriorly Motivated, I will leave the old articles here, and from now on I will repost my articles (three installments so far) in my new column. Hopefully that column will start coming out a little more regularly as my health improves. You prayers for me will be gratefully accepted.



 

I never liked the politics of David Lloyd George, the PM of England during WWI, but he left us one very astute piece of advice: "Don't be afraid to take a big step if one is indicated; you can't cross a chasm in two small jumps."

You may recall I mentioned the election as being your one chance to communicate with the world, and especially to get in contact with others who are dismayed by the current state of politics in America. That may not have made much sense to you, but it's the number one most important reason you are not 'Wasting your vote' when you vote for a 'Third Party'.

What makes the LP or any other competing party 'Third' anyway? Isn't it a little presumptuous to implicitly declare the Dems and Reps 'First' or 'Second'? They aren't, historically. The first two national parties to become significant in the Federal government under the Constitution were the Federalists and the Democratic-Republicans. Neither are with us today, at least in their original incarnations. Today's Democratic Party did evolve out of one faction of the Democratic-Republicans, but they were, from the start, a decidedly different party The Republicans sometimes try to also claim the D-Rs in their ancestry, but ultimately, neither is the party of Jefferson.

So if the Two Camps weren't the first and second big parties to come along, which would make the next big one 'Third', then the term must mean something other than order of creation.

The only other choice I can see is that the term 'Third Party' comes from an assumption. People use the term because they think of the Two Camps as a permanent institution, fundamental to our nation, and therefore any other competition is automatically no more than a distant third place.

Nobody got together and agreed to this practice. It's just a habit, born out of conventional wisdom and built into our national psyche. Still, the constant reinforcement is as effective as brainwashing, preventing voters across the country from straying out of party lines.

What does it say to people, when we talk about a 'Third Party'? If a party is 'Third', it suggests that it won't be able to do anything. It won't seat any representatives, it won't get mentioned on the news, it will be just so much wasted effort. It's the hapless bronze medal standing on the lowest platform, listening as someone else's anthem plays. The second place winner made the winner sweat, nearly won, got his attention. The third place was never in mind.

Absolute, total nonsense. At the founding of the Republican Party, it did not instantly step into second place. The Two Camps by that time were the Whigs and the Democratic Party. The Republicans were a 'Third Party' up until the decade before the Civil War, when they stepped up to fill a void left by the Whigs who were disintegrating over the slavery issue. Abraham Lincoln, sixteenth president of the US, was the first Republican to hold the office. Only five of the previous fifteen were from the Democratic party.

Remember my David Lloyd George quote? For me to quote the man, I must have had a really good reason, because I seriously don't like what he stood for. And I do have a good reason:

The Libertarian Party and other competing parties look risky to the average voter, a choice far less comfortable than the Reps and Dems. Many people out there admit that neither party represents what they would like to have for a government, but they settle for whichever party moves them a little closer to their vision of the right way.

That is their first of two small jumps. That's their quick way to the bottom of the canyon. By voting for someone who does not accurately or even closely resemble their beliefs, they effectively tell the world they want the US to do things in a way they do not in reality approve of. They appear to the world as someone who agrees with everything the candidate represents.

If you have a vision of your ideal US, you should vote for the candidate who most closely represents that vision, no matter how slight his or her chances of winning. That's the big step that gets your vision on record. The more who do so, the bigger the 'Third' party vote becomes, and the less claim the Two Camps have to being 'First' and 'Second' .

Voting for a 'First' or 'Second' who don't represent your beliefs causes you to drop out of sight into the abyss.

So who do you vote for, if you want the Federal Government to stop growing, stop soaking up tax money while simultaneously building debt? Right now, people who think it's important vote for the party that gives it more lip service, the Republicans.

But, ever since Nixon began the process of building the deficit and piling on to the National Debt, it has grown under every Republican president, and it grew more under these than under the Democratic administrations. Not saying the Dems don't share responsibility; they were in control of Congress through most of this time. But a Republican president has signed most of these budgets into law, and Democrats have not enjoyed a filibuster-proof Senate during any Republican administration in this period. Worse, when the Republicans did have control of congress, they only controlled themselves by grid-locking with a Democratic president. They were trying everything they could do to cut the tax rates instead of paying down the debt, an absolutely irrational position for any
politician supporting fiscal responsibility.

Personally, I suspect the last Republican president who actually believed in a small government was Herbert Hoover, although Eisenhower was getting there toward the end of his administration. Considering them according to their actions rather than their words, I cannot see Nixon, Reagan or either Bush as having done any more than paying lip-service to Fiscal Conservatism. The concept simply doesn't match up with their record. Ford never really had a chance to show his colors, presiding over a crippled economy and a crippled government, so I just leave him out of the discussion.

What's that? You think Lyndon Johnson is at fault for our broken borrow-and-spend system? Maybe he bears responsibility for some of the 'and-spend' part, but he left Nixon with a balanced budget. Nixon's the one that kept Johnson's programs and war alive but didn't collect sufficient taxes to pay for them. If he'd been a real fiscal conservative, he would have found a way to slow down the spending or push Congress to raise taxes to pay for their precious programs. Borrowing for any purpose other than investing the money in a profit-making enterprise is never, ever fiscal responsibility.

Frankly, I don't see the current Republican candidate showing any chance of bucking the trend and going back to true Fiscal Conservatism. I might have believed it before this campaign, but when he abandoned the middle and courted the same quasi-right voters courted by every Republican from Reagan onward, that told me that he is ready to play the same old power games rather than do the right thing.

If a politician talks about all sorts of programs that are going fix the world for you, and then tells you he's going to cut taxes too, then he is not under any rational definition of the word a Fiscal Conservative. A bona-fide Fiscal Conservative is first and foremost concerned with eliminating the deficit, preferably by eliminating spending, and then with applying the resulting surplus to paying down the debt.

Once the debt is gone, he should be concerned with abolishing it via a balanced budget amendment.

Do either of the candidates speak of this in their platforms? No. They speak of being fiscally conservative, but don't dwell on it, or even offer a definition of what they mean. And as Bill Clinton taught us all, words are very tricky things to define.

Good luck to all of us on Tuesday. Make sure to come back here and begin planning with me for 2012. We need to get work on it right now if we hope to effect a change we really do need.

 

The thing about being a Libertarian is, when someone steals your yard sign, you don't know who to blame, the Republicans or the Democrats. But it did make me feel good to think that at least one of them sees us as a threat.

I try not to brag on my kids, but they make it difficult. Anyway, it's actually on topic this time, so bear with me.

I have a couple of very talented young musicians in the house. The elder is a double bass player (who also plays piano and electric bass guitar). He is hard at work this year (as a high school senior) preparing to apply to various and sundry good music schools with an eye on getting a performance degree. We're very proud of him.

Every year, his school district holds what they call the 'String Fest', a concert featuring one or two numbers from the leading orchestras of the various schools in the district with music programs. They march through the elementary schoolers, to the middle schoolers, and finally end up with my son's orchestra, the top orchestra in the Fine Arts magnet for the district. It's a real treat if for those of us who enjoy watching kids doing their best with fine music.

I've always, from the first year my eldest began playing, enjoyed sitting through the whole concert, watching first year students fumble their way through 'Mary had a little lamb' all the way up to the Honors magnet orchestra performing pieces out of the professional repertoire. (Sadly, they start with second year students now. They used to have the beginners.) And I've always been disturbed to watch the parents of younger kids jump up and grab their kids as soon as their orchestra finished, rapidly thinning the audience so that the littlest ones played to a packed house.and the finest musicians played only to their own parents (and one or two others like me.)

Now that my son is in that top orchestra, it began irking me more. Last week, we had that concert. Watching these people leaving with their kids, I fought the urge to jump up, grab them and yell, "Sit back down! I watched your kid! Stick around and watch mine!"

And of course the thought occurred to me once again, "If it were me running this thing, their kids would be required to stay and watch the whole concert, like the oldest kids have to do! It would be good for them!"

Then it hit me. How incredibly un-Libertarian. After all, I wasn't watching their kids as a responsibility, I was doing it because I love watching the little guys doing something so well, something they've put so much effort into. I'm watching for the same reason people like watching the kids who they bring in on 'Dancing with the Stars'. It makes you feel good about the future, to know kids like these will be around to look after it.

We, every single one of us, have at some point thought "If I were in charge, things would be done right!" The 'if I ruled the world' moment is as human as it gets. Only, we almost always think of what we would make the rest of the world do.

So do the people we actually do put in charge. They think about what they're going to make the rest of us do.

I read through the Democratic and Republican party platforms last night. I try to do this once in a while, although I'm not quite sure why. It's an exercise in futility.

The Dems were crying their hearts out over the many many unfairly disadvantaged of our nation, and blaming it all on the President and his buddies. It seems an awful lot of people need to learn how to do things the right way, and an awful lot of corporations need to change their ways and do things the right way, and their solution? Tax breaks and spending and more tax breaks and more spending.

Oh, and by the way, they're going to be fiscally responsible.

The Reps were very defensive about everything they've done and ever scornful of Democratic opposition to their policies and accomplishments. They ended several of their sections with a position that, when stripped of clever language, basically promised nothing except, "We will steadfastly oppose Democratic attempts to oppose us." I wonder if they know how ironic that is.

Then they spent a very long time detailing the world, area by area, in many cases country by country, and how those people needed to do things differently, and how the United States ought to be making sure they do things differently. And then they talked about how corporations were all hamstrung by the Democrats and unable to do the right thing like they would if they only could, and how the Republicans were going to fix this.

How? Tax breaks and spending and more tax breaks and more spending.

Oh, and by the way, they're going to be fiscally responsible.

If I hadn't needed to wake up for church this morning, I think I would have broke into that bottle of tequila in the cupboard. I really needed a drink. I managed to rise above the urge, but it wasn't easy.

 

I feel a little guilty that I haven't responded to any comments on my last entry, yet I'm back with another. Sorry, but I've been a little under the weather. Same excuse for the long delay between posts. Thanks everyone who has emailed, rated, or commented. I'll reply individually as soon as I catch up some.
One of my all-time favorite political quotes is from Plato: "Those too smart to participate in politics are punished by being governed by those less intelligent than themselves."
My plan for this blog is to work my way in a logical fashion through a discussion of Libertarianism (or perhaps through my slightly altered version of it, but I intend to make sure to point out where my views don't match up with the LP platform.) I suppose my last entry logically leads me directly into a discussion of what Libertarianism is and why I think more people should take it seriously, but I think another question needs to be settled even before that:
Why should people take any third party seriously?
The whole 'wasted vote' theory is wrong. I'm talking about the idea that any vote cast for anyone other than the two major parties is the irresponsible waste of your precious voice in the Republic. To my mind, it is a deliberate lie, that I suspect was first made by a Republican during the second George H.W. Bush campaign in an attempt to dissuade Ross Perot supporters. (At least, the first time I ever heard it was in the 1992 campaign, although Dems are equally guilty; they used the same logic on Nader supporters.)
"Deliberate lie"? I assure you I am not being overly harsh. The people who circulated this idea in the first place knew good and well that they were saying something untrue and that is the very definition of a 'lie'. They understood how the American political arithmetic works, and they knew already what I'm about to tell you.
The one and only 'wasted vote' is a vote that is not cast, a voter who fails to go to the polls. A voter who casts his vote, no matter how he casts it, has made good and proper use of it.
In 1992, the Governor of Arkansas won the presidency by gaining a plurality of 43 percent of the vote. How is this possible? Because the incumbent President of the United States was unable to muster more than 37.7 percent (an appalling showing for an incumbent anything.) If we factor out all the people who 'wasted their votes' on Ross Perot, Andre Marrou, Donald Duck, or whomever, the esteemed Bill Clinton actually took 53.3 percent of the vote, which is, in these even-split days, close to a landslide.
The actual 43 percent gained by Clinton was used as an excuse by Republican opponents. I remember how one Republican of my acquaintance put it to me: "The Bill Clinton Presidency is all Ross Perot's fault!"
In his eyes, every single person who voted for Ross would have voted for George 41 if Ross hadn't run. So the 'real' results, in his eyes, were Clinton 43 percent, Bush 56.6 percent.
This is absolute nonsense, in the real world. The last time any president won by that kind of margin was a wildly-popular incumbent Ronald Reagan over a hopelessly incompetent run by Walter Mondale. The last time before that was Nixon over a similarly incompetent McGovern. There is no way that an incumbent with sagging popularity and a poorly-conducted campaign (as the 92 Bush campaign) could have pulled 56.6 percent. What we have, in this failed way of thinking, is wishful thinking combined with denial.
Now let's consider what the 1992 results actually mean. The numbers were Clinton 43 percent, Bush 37.7 percent, Perot 18.9 percent. The other 0.4 percent are mostly the Libertarian (Marrou) .
I contend that a significant number of the voters in the 1992 elections would not have voted for anyone had Ross Perot not pulled them into the process. Before the 1992 elections, the US presidential election had never had even close to 100 million votes cast. In 1992, there were 104.4 million, which exceeded the previous record by 12 million votes! Perot garnered a total of 19.7 million votes. A large chunk of those were disgruntled Republicans. I personally doubt Perot appealed much to typical Democrats, so I'm betting the remainder were the surprise 12 million newbies.
Since then, the 'newbies' have remained in the process, continued to vote once someone got them started, and more new voters have followed them. I give the credit to Mr. Perot. I believe that Mr. Obama is bringing a similar surge in, and we will again see record numbers in 2008.
Had Perot not run one of the weirdest campaigns in history (he actually withdrew from the race at one point, just when he had everything rolling forward) who knows how much of the vote he might have taken. Possibly enough to have changed the results.
It wouldn't have taken much. Let's pick out five states which had the following results: a, Clinton won and b, Perot took at least half as many votes as Clinton. In these five states, let's imagine that somehow Perot attracted twice as many votes as he did, and every other result in the union stayed the same. Or, Perot gets 24.8 million instead of 19.7 million in the popular vote.
California, Massachusetts, Minnesota, Missouri, Ohio, Wisconsin = 109 electoral votes for Perot.
Now it's only 261 votes for Clinton and 168 votes for Bush. You need 270 electoral votes to win in the Electoral College.
What would have happened after that? Very simply, the Electoral College would have hammered it out. Oh, I know that people say in the EC everyone 'has to vote for the person they were sent there to represent' but the reality is, that's nonsense. It is, at best, a tradition, although a variety of states have relatively untested laws that attempt to force the elector's hand despite what the Constitution says. By Federal law, they can vote for any damned candidate they want.
And the Perot candidates would not have voted for Clinton. Perot electors might have lobbied long and hard for Bush or Clinton supporters to switch to Perot, but my guess is, they would have gone for Bush in the end, because the Perot machine was more Republican than Democratic in philosophy and even if the voters were often independents and traditional non-voters, the electors would have come out of the machinery. Then you would have seen a flurry of attempts by state governments to push the electors this way and that, or get it thrown into the Supreme Court on the basis of various state laws of questionable constitutionality that attempt to dictate the elector's actions or mete out punishments if he or she is 'faithless' to the candidate represented. It would have made the 2000 election and the 'hanging-chad' controversy seem tame. But in my opinion, in the end Bush would have remained president.
All because 24.8 million voters didn't know their place. Didn't know they weren't allowed to draw outside the lines. A mere 5 percent increase in the national vote could have done it. I won't walk you through the numbers, but it would not have required even an additional 10 percent to actually have put Perot in office. Or to have put Clinton in by a popular majority. The balances are just that close, and the 'winner take all' system for apportioning the electoral votes of 48 out of 50 states (of 49 out of 51, since D.C. acts like a state in this case) make it possible to swing results wildly with relatively little adjustment in popular percentages.
You are absolutely not wasting your vote when you cast it for anyone else, no matter how obscure, because your vote becomes part of the percentages. Never forget that.
You cannot vote 'none of the above', except by voting for someone else. Vote for yourself. Vote for the man in the moon. But don't skip on the trip to the polls. The more disgruntled voters that actually show up at the polls, the harder the acid burns in the stomachs of the power brokers who would prefer you stay home and waste your vote.
Okay, this discussion actually has another half to it. The half that explains why, if you are voting for someone you think 'has no chance' you are still doing something our country desperately needs many more of its people to do. The other half needs to come after I discuss a couple other points, so I'm going to draw this post to a close. So just take the following point with you as you leave for the day. It's sort of a preview of the other half of this discussion:
Your vote, regardless of who it is cast for, is your one and only direct communication to the power brokers, to the politicians, to the elected officials, and more than that...
Your vote, regardless of who it is cast for, is your one and only chance to get in contact with everyone else who may, just like you, equally feel that your government is not doing things the way its people expect. If you don't cast it, you are invisible to everyone else who is equally dismayed by their choices. They may also be failing to vote because they don't know how many more like them are out there. You are 0 percent, 0 votes. If you do cast it, you are now 1 vote more. If a thousand of you cast it, you are a thousand votes more. And if a million of you cast it, you are now a subject of discussion on CNN or Fox News. You begin to be heard.
Perot supporters were beginning to be heard in 1992. If the Reform Party hadn't had a complete meltdown in the fight for power once Perot exited the scene, it might have mattered quite a bit in subsequent elections. The US military might not be tied up in Iraq, facing a crisis of international law because the UN agreement that gives them legal standing is about to expire and the government they installed has yet to authorize their presence. The international financial system might not be in total disarray because of not merely lack of regulation but effective collusion on the part of American bank regulators which allowed a financing speculation bubble to grow wildly out of hand. The world might be a dramatically different place today.
We who are dismayed by the Two Camps of America can matter again. If we start now, 20 million votes in 2012 is a real possibility. Frankly, with the right circumstances, the presidency wouldn't be impossible. Perot was closer than most people realize.

 

An old joke among pilots goes, "The key to air safety is to keep your total number of takeoffs in balance with your total number of landings." I find this nugget much the same as the wisdom ricocheting around web pages and news channels lately. Every bit of it seems to be simultaneously sound and useless advice.
At the start of the biggest world wide financial meltdown since 1929, my retirement accounts contained investments of a risk level appropriate for a man nearing fifty, and for years I have been shoveling ten percent of my income into them. I had diversity, even to the extent of managing some of it myself and leaving some of it in the hands of the professionals, and keeping some of it in domestic investments and some in ADRs so that I held foreign investments. Despite all of these things, I have less money saved for my retirement today than I had ten years ago. All of my savings and growth for an entire decade has vanished. No, I did not withdraw any of it, not a single cent. No, I did not stop saving. Simply put, I stood pat, sagely heeding those who counsel 'never sell during a downturn'. If I had transferred all my funds to an insured savings account ten years ago and then used the money I deposited since then to take expensive vacations instead, I would be farther ahead right now.
I feel like the Ant listening to the Grasshopper laugh at me as we shiver in the cold together. This is not the way the story is supposed to go.
Writing a diatribe against the several possible scapegoats would serve no purpose. As frustrating as it is to watch my hopes of retiring at the same age as my father disappear, it isn't your problem, and it isn't in any way special or unique. I brought it up to personalize the anger of the middle-aged and golden aged across this nation and doubtless many others, who are experiencing the same devastation as I. This anger, and not the financial crisis, is the real problem today.
You see, in Washington and its international counterparts, the engines of Big Government are now gearing up to capitalize on this latest surge of anger. I can't tell you what they will do, precisely, because I am not psychic, and the election year complicates the question anyhow, but I can assure you, the process is underway. We are too late to stop it this time around, but unless we want to live through this again, or perhaps even worse than this, we must begin as a nation to understand why doing all the same things we've always done in times of financial crisis will lead to the same long term result, over and over again.
The panic story, already well underway, follows a predictable path. Trouble stirs first in the form of slowing growth, for whatever reason. Inflation saps the value of savings, interest rates slow capital investment, and our leaders see an opportunity to save the day. You will hear the Federal Reserve or the President or others speak of 'levers' such as the Federal discount rate or the reserve requirements, as if the economy is a machine with controls no more complex than an automobile. The specific levers vary from decade to decade, but the result is the same. Natural economic adjustments which will inevitably occur become delayed, creating unintentional results. The effect of those unintentional results gradually accumulate, until the system breaks down and the correction the government tried to forestall happens anyway.
In 2000, toward the end of the Clinton administration, the economy slid downward, thanks to the dragging effect of a global financial crisis which had gradually blossomed overseas over the prior three years and magnified by a collapsing stock bubble. Over the next year, the crisis deepened, as the early Bush administration struggled to find a way to deal with it. Then, over the course of four months, the September 11 attacks and the Enron bankruptcy put the final touches on the collapse.
The Bush administration, even though supposedly staffed by Conservatives, became as activist about managing the economy as any of its predecessors. They decided to use the consumer as their 'lever'. If the consumers would just buy stuff, they reasoned, despite the financial crisis and the growing American military commitment, then companies would show profits, stocks would rise, and the good times would roll once more.
How would the consumers do this in the middle of a financial crisis, with their discretionary income falling and their unemployment rate increasing? By increasing their debts. Through a variety of policies, financial regulators arranged to make sure interest rates remained as low as possible, so that the consumers could borrow the money. Consumers had come out of the nineties already saddled with a serious debt, but the government believed that making it worse would be the best possible plan.
It could work as a short term solution. And they reasoned that as long as the short term wasn't too bad, the American economy would eventually pick up the ball as usual before the short term ended. Presumably, those debts would vanish when the economy hit its stride.
But when money is tight, people get more conservative about it. How could the leadership convince the country to go on a spending spree in the middle of a recession? They couldn't, before September 11, but after it, public anger was ready to channel, and in some cases it had already spilled out into the wrong things, such as attacks on American Muslims and American Sikhs (mistaken for Muslims because of the turbans they wear as a religious duty.)
Rather than let it fester, the government harnessed the patriotic situation to battle the economic situation. Echoing calls for public support during the world wars, appealing to consumers to do without, to plant victory gardens, to gather recyclables and buy war bonds, the Bush Administration told the American people that the most patriotic thing they could do was keep buying stuff. As long as they kept buying, they were supporting the boys overseas and standing proud for flag and country.
Spurred on by the Administration and enticed by ultra-low financing brought about by Federal tinkering, they bought. They purchased cars on zero-percent interest rates, they discovered 'creative' ways to get into houses with mortgages arranged such that they would never be able to pay them off (on the theory that they could sell them later for a profit, thus pocketing the profit and paying off the loan. In other words, the sellers packaged the mortgage as an investment vehicle.) And credit card balances swelled to purchase flat-panel TVs, HDTVs, laptops and more. All while we felt proud to help support American home-builders and retailers.
What a unique call to action. Your sacrifice, as patriotic Americans, shall be to sacrifice nothing.
The idea worked to a certain extent in the short term, but never really to the point of recovering the economy of the nineties. Other events, including a resource-taxing military effort in Iraq and the growth of two very large Asian economies (representing between them nearly half the people on Earth), aligned to keep US growth weak while pushing up the cost of food and fuel through increasing demand.
The short term ended without the good times between crises kicking in. Food and oil prices spiked upward and the economy stopped growing. The bad choices of lending corporations and consumers (remember those impossible-to-pay-off mortgage 'investments'?) began to catch up to them, creating a cascade of failures that has touched off a new global financial crisis. And the current presidential candidates now busy themselves trying to harness public anger over it, trying to pin the blame on each other, or each other's party, or each other's party's latest president. The President and Congress, meanwhile, hammer out a massive rechanneling of tax money into corporate hands to replace the capital lost in those bad choices.
You keep hearing the number '$700 billion'. Please help get the word out; the real size of the bailout is $1 Trillion. The '$700 Billion' is the amount greater than the $300 billion already committed a few months ago to bail out Freddie Mac and Fannie Mae for their woes created in the same crisis via the same bad choices. Where did all this money go? How could $1 Trillion just vanish? The angry consumers want to know. They shake their fist and want change, and intend to get it by voting for the same old parties they always vote for.
The $1 Trillion didn't really vanish, per se. The reality is, it never existed. I might talk more about that at some point in a later article, but let me ask you now to stop following the herd, stop shaking your fists and demanding a fix from the government, and think about something.
Ultimately, this problem had a cause called... ourselves. Perhaps not individually, but as a nation. We spent money we didn't have. When a corporation does this, it's usually good business. Most corporate debt is invested in capital or materials from which it will create a product to sell. This makes sense, and even has a saying to go with it; 'You gotta spend money to make money.' It works because the profits from the sales repay the debt.
Consumers who go into debt to buy a house are arguably still making a sound financial decision, provided they restrict themselves to a mortgage that they can pay off, and buy a house they will be able to sell. As long as these are true, they are spending money to make money, the equity increase in the house as property values rise, and thus, they are still acting responsibly.
But when you buy a car, or a flat-panel TV or a nice vacation with a loan? How much money will you be making on that?
The answer is, none. The item will depreciate until it is valueless, or mostly so. That isn't in itself a problem, though. We buy many consumables in our life, from food, to clothing and fuel and electricity... and some of these are discretionary, like a vacation or an espresso drink. That's part of being alive; if you aren't enjoying yourself once in a while, you're not likely to be enjoying your life.
The problem is, consumables disappear. You must continuously buy more of them. You will always spend a certain percentage of your income on them. But, if you spend money you have not made yet on items where, unlike the investments of corporations and landowners, the purchase will never earn any money to pay back the debt, then you have simply moved a percentage of your future discretionary income into the present. Go into the future, and you find a big hole in your resources called a credit card bill. It does not represent any investment which earns you money, it represents that big TV that just broke.
It also represents that replacement TV that you don't have the money to spend on, because you have a credit card bill to pay, the debt incurred for the original TV now broken plus interest. Of course, you could drive the debt up higher by charging it on your card. And, multiplied across the nation, it represents millions of TVs and whatever else that consumers cannot buy unless they dig a deeper hole for themselves. And that loss of discretionary income leads to an economic downturn, once they hit the point that they either cannot extend their credit farther, or have nothing at all to pay cash with, because their bill is so large.
A fiscally responsible leadership, knowing this, ought not encourage consumers to spend what they don't have, ought not ask them to rob the future to pay the present, as the saying goes. Our government is already addicted to doing the same thing for itself though, so perhaps they just couldn't see it. Or, perhaps they simply hoped some other unknown solution would appear and make up the difference. That being said, I'm still not blaming the current situation on them. They didn't hold the pen that signed the car loan or interest-only mortgage or handed over the credit card. We did.
We let our patriotic fervor be channeled as a 'lever' to control the economy. As a result, we reached the end of our credit limit as a nation, and now we watch the economy shrink. What mistake are we about to be herded into making now, as we demand solutions from the government and they channel our anger into support for whatever theory they wish to try this time around?
As I said, I'm not psychic. But I will tell you this much; if we continue to vent our anger at Washington, if we continue to expect the politicians and financial policy wizards to fix our economy and make everything better, they will continue to do as we ask, and keep experimenting on us. One of the great ironies of our times is that we vote for people who promise to 'keep government out of the way of business' and 'support free enterprise' and 'let the market drive the economy', then we scream at them to meddle and fix the economy the second it doesn't go well.
The Bush Administration did not create the problem. We did. Not by going along with the idea of buying as much as we could to support the economy (and in some way show the terrorists they weren't stopping us) but by demanding a solution from them in the first place.
I will return to the problem above, both in terms of government spending and consumer spending, in later posts. I encourage you to think about the above point, and comment on it so I can clarify anything I didn't explain well. You might call this a setup entry. Go back and read again, if you have the time, because I'm going to build and expand upon several ideas as we move on with this blog. In one way or another, most of the concepts of and reasons for Libertarianism are bundled up together in it, although some of them, mostly the social side of things, are buried pretty deep. Let's just say I want you thinking about it for now. I'll explain why, as we go along.

 

Except for this paragraph, my first post is the same as my original 'Blog Description', but I wanted to put it here as an entry so that I could replace the description with something shorter. To everyone reading, hail and well met. Welcome to my blog, and I look forward to your comments.