It’s just the first bite of the apple

My goodness, you would've thought that the deal that was made to prevent us from going over the fiscal cliff was the last chance at legislating.  This morning Joe Scarborough was ranting and raving because for the first time in over 20 years, Republicans raised taxes.  According to Grover Norquist, Republicans lowered taxes but try convincing those who make over $450,000 next year when they get their  tax bill.  Joe went on and on about Paul Ryan voting for a bill (without tax cuts) that will add $4 trillion over the next decade. He was so mad that he said Ryan voted for the $7 trillion Medicare prescription bill a few years ago, so he stripped him of his deficit hawk title.  Joe Scarborough is one of those libertarians / conservatives who think republicans should just be reforming the entitlements and reducing the size of government; nothing else.

For the average Americans, they get to keep their credits for the next five years, so they can plan accordingly.  Economists have told us that business wants certainty, this bill gives them that, so hopefully we will stabilize the markets and increase consumer confidence. American workers will see a 2% reduction in their paychecks because the Social Security payroll deduction rate went back to 6.2%. Two million unemployed Americans got a one year extension of unemployment benefits.Neither party got all they wanted but that's what compromise is all about.

Ricci Ware, radio host for San Antonio's KTSA radio, said liberals were walking around with their chest out because they stuck it to the rich man. He also said that we were headed for a socialist agenda. The libertarian / conservatives are angry because they lost the argument about tax cuts paying for themselves and the hideous thought of ever raising taxes. That small group cannot win national elections on two goals: reducing government and reforming entitlements. We do have to reform entitlements and reduce government, but we have to take a balance approach, and the goal should be efficiency because it's obvious people do not want to give up Social Security and Medicare.

There are two big battles just around the corner: raising the debt limit and the sequester cuts. The president said that he won't partake in a battle to raise the debt limit to pay the bills' Congress agreed to make.  I guess that he could veto the bill and make the Congress pass it with a 2/3 vote, which is virtually impossible.  The leverage on the debt ceiling belongs to the GOP because they have proven that our credit rating and an unstable world financial condition takes a back seat to lowering our deficit and debt. The GOP will hold up other projects President Obama wants to undertake like illegal immigration comprehensive reform, infrastructure, energy policies, gun control and unemployment.

There's only one way to avoid the unnecessary 11th-hour  decisions our Congress is undertaking.  We need a grand bargain to reform the entitlements' minus Social Security because the latter does not increase the deficit, and it's in pretty good shape for right now.  That could be a standalone bipartisan commission fix.  We mustn't forget defense department waste, and we shouldn't get fixated on today's numbers because that will change once our economy starts to pick up.  We also have to factor in us leaving Afghanistan.  We can also cut out several loopholes but keep our progressive tax system.

Stalemate

We’ll begin 2013 like we ended 2012; I think it now that Joe Biden has entered the picture, and we’ll do just enough to keep us from going over the fiscal cliff. The gun issue will be forgotten by the time Joe Biden’s Commission makes its report to the president because that’s the way we roll these days.

I feel sorry for Speaker Boehner, especially after listening to Amy Kremer, chairperson of the Tea Party Express. She said the Tea Party she represents will NEVER vote for a tax increase because we have a spending problem. She cited the numbers we all know by heart, yearly deficits over a trillion dollars and a 16 trillion-dollar debt. The host stunned her when he said allowing the Bush tax cuts to expire will fix the deficit because she obviously didn’t know that extra revenue or spending cuts will reduce the deficit. Amy Kremer then said that states with higher taxes have a higher unemployment rate. That’s true for right down but who thinks that Alabama will outdo California when the economy takes off? Growth, education, infrastructure repair, defense spending or energy investment is of no concern to the Tea Party. The word compromise is not in their vocabulary. After all, of the 234 GOP house seats, President Obama only won 15 of those districts. It will remain that way for least 10 more years because the 30 Republican governors have aligned their congressional district to favor their party. It will remain that way until the next census, which is seven years away.

It’s upsetting (although true) that a deal on January 4 will not affect the markets that much because they have built in an expectation of a non-adaptive government. If Congress does not pass the Farm bill, milk might go up to $7.00 a gallon, the payroll tax is gone, people will not get their unemployment checks, and new markets will finally be convinced that America has a dysfunctional government with no hope in sight. It’s funny how the GOP doesn’t think that allowing the payroll tax to expire is increasing taxes. Raising the Social Security (FICA) to its original 6.2% from the current 4.2% amounts to $1000 for those families making $50,000. I’m glad it expired because we need that extra revenue to fund Social Security during this time of high unemployment.

We’ll have to wait another 10 hours or so but is not as simple as “they knew all this seven months ago and chose not to do anything about it.” They ran into a human nature problem, both political parties that thought they were going to win the White House, so “why buy the cow when you think you can get the milk for free.”

Our hometown newspaper is trying to conjure up a discussion about having armed guards at our schools. I’m not totally against have an armed guard, but I don’t want armed teachers. How will we ever measure the effectiveness of an armed guard? How can you measure the effectiveness of protection against a random mass shooting? This morning’s paper gave an example of an armed teacher averting a potential school shooting, but we also know that Columbine and Virginia Tech had armed guards.

The pro- gun advocates are trying to divert the attention away from guns and put it all on video games, movies and mental illness. I think mental illness funding is a separate issue but I can’t help but think that gun manufacturers love seeing their guns being displayed in video games and movies. I think this issue is about high-capacity ammo clips and the ownership and the registration of semiautomatic weapons. I still think we can do something about 40% of the weapons that are sold without an instant background check.

I hate repeating the same-old topics, and I wish we were like the people in that scene from the movie “We bought a Zoo.” A big tree blew down overnight preventing people from entering the zoo in their cars. The owners of the zoo and its caretakers helped the people climb over the felled tree, thus doing what needed to be done for them to have a successful opening.

Happy New Year everyone.

Let the women negotiate a deal

Senators Claire McCaskill and Susan Collins said if we had more women in Congress, we would have a deal right now, because women know how to compromise. I believe that. What we have now is a battle of male egos trotting out their same old talking points hoping that this time, they will stick. The media encourages it because they think that Obama has to give John Boehner enough for him to hang his head high; regardless of what it does to our economy. I'm sorry but elections have consequences and to the “victor goes the spoils” because that's what the American people voted for. We didn't have that in 2009, so the president had to suffer the consequences of obstruction.

I saw a couple letters this morning describing the fiscal cliff as being an easy fix. Nothing could be further from the truth because of the time restraints and the elephant in room that no one wants to discuss. That elephant in the room is the impending debt ceiling crisis. The White House doesn't want to make a deal to get us through this year but then have to fight the opposition again in February over something that is much more crucial; paying our bills that we have already incurred. The two letters centered on taxes and spending but, unless we have some incentives for growth, education, infrastructure, jobs and innovation; we're just spinning our wheels. Republicans want to forget that the Democrats gave in to one trillion dollars in spending cuts in the last fight over increasing the debt ceiling. There's not a lot more that can be had in non-defense discretionary spending. The president said he's not going to have that fight anymore and I don't blame him because the world markets think that we're ridiculous for having that fight. The GOP forgets that they are responsible for some of that debt that we have to pay. That's not to say that they can't fight to cut spending during the budget battles.

It's my opinion with exceptions of course; women are much more honest when it comes to negotiating. They're much more adept in calling a “spade a spade” than men are. At the same time, they don't think having compassion is a weakness. I saw an example of this when Mica Brzezinski practically called Governor Rick Snyder of Michigan a liar ,when he said that the bill he recently signed was not anti- union but more pro worker. It gave the panel more room to call out the governor for trying to sugarcoat his actions. The governor said that the bill would lead to more jobs in Michigan but the 23 states that have right- to -work laws do not prove that. He cited the neighboring state of Indiana, who passed a bill similar to his right- to- work law and that state saw an increase in 30 companies coming to their state. He doesn't see the animosity it will create between the “free riders” and those who pay their union dues. The governor conveniently left out the fact that people like the Koch brothers love non- union states. The people for “Americans for Prosperity” were not out in full force to defend workers' rights.

I can't see why people want us to win the “race to the bottom” that began the year we started outsourcing. I don't think that we have to continue lowering wages and benefits just to keep companies in America but we'll never know unless we have access to all their financial records. Major League Baseball and the NFL were grossly underpaying their players. It seems to me "If owners make representations that they're losing money or that they can't afford a certain term in the collective bargaining agreement, then they're obligated to prove their assertion. “We applaud world-class companies like Caterpillar coming into our community bringing in $12.00 an hour jobs. We're part of the corporations union busting tactics but we're willing accomplices because we need the jobs. There's no easy answer but I still can't see why government should be able to stick its nose in the private sector's labor negotiations.

The Art of Negotiating

Yesterday I watched Joe Scarborough of “Morning Joe” throw a hissy fit because the president's first offer to the republicans was a nonstarter. This morning he called John Boehner's counteroffer ridiculous but he left it at that. The panel kept reminiscing about the glory days of negotiations between Tip O'Neill and Ronald Reagan. Joe Scarborough wants President Obama and John Boehner to lock themselves in a room at Camp David and hammer out a deal. He discounts the fact that the president tried that method but came out on the losing end of the deal. The president wants to use his strength and take his case to the American people where he's winning public opinion, even though it doesn't necessarily get him the 218 votes he needs to pass a bill.


Political posturing is called “sausage making” because it doesn't look pretty but it's a necessary step to get the job done. Republicans are calling for the president to step up and lead in the negotiations but that is just a way of them saying that this president does not have any leadership skills. The president's plan was put on the public airways and it's on the White House web site, so the starting point has been established. It's fairly certain that the president will be front and center when the serious negotiations start.



It was mentioned that the republicans might let the 98% of Americans tax plan to pass without their help. They will vote “present” and allow the democrats to pass it thinking it will keep their hands clean because the marginal rate for the top 2% will be raised. That way they could tell their constituents that they allowed the bill to pass under protest. There's that other plan that Nancy Pelosi might use to get a bill to the floor if she can garner the necessary 218 votes. Either plan would get John Boehner off the hook with his more conservative caucus because it will be seen as being out of his hands.

There is strong talk that a deal may be made by the 23^rd because it would look bad if Congress went on Christmas vacation while the fiscal cliff crisis loomed ahead. Some think it John Boehner will hold out to last possible minute (Dec. 31^st) before surrendering the marginal rates saying he chose country over party loyalty. That might get him through the day but everyone knows he wants to be the speaker of the 213th Congress but he won't get if he is seen as caving in to President Obama too soon.. His base can read the tea leaves but they want him to fight to the end.

You might ask why it has to be so difficult and the answer is polarization. The final vote tally is in and the president will end up winning by 4.6 million votes. The president only won 23 counties, the red states got redder, so at the current pace that means that the gerrymandered districts will always favor a GOP controlled house but the democrats will have the senate and the presidency, unless there's a dramatic shift. I don't see any changes anytime soon and it might get worse before it gets better. For example, the runner up to Mitt Romney, Rick Santorum, will now write articles for the extreme right wing conspiratorial website WorldNetDaily (WND). Then there is the Grover Norquist threat of a Tea Party 2.0 if the president gets what he wants. Grover is one on those people who thinks he is winning no matters how many times he loses. He reminds me of a spoiled brat.

It’s more of the same but it’s being repackaged

The fiscal cliff continues to overshadow a problem that would remain with us even if we get a bipartisan agreement to start getting our fiscal house in order. If we don't start to do something about income inequality; we will continue to have fiscal cliffs.



The corporate philosophy during the post-war era was to produce enough income to be able to share a sizable share of the wealth with their employees. Company loyalty was a plus and much of their gains were used build new plants, invest in the newest technology and hiring new employees. Today, those same corporations only allegiance is to their shareholders. Corporate CEOs are driven to increase the bottom line to make their shareholders wealthy. In turn, they are given lucrative stock options and benefit packages.



The nation's largest private employer is Walmart but it also continues to be the worst company to work for, when you compare their worker's pay and benefits to the company's profits. They're not ashamed of the negative publicity and they proved it this Thanksgiving, by taking away a holiday from their employees just to hear the ringing of the cash registers. It's not that Walmart had to take those measures to remain profitable because Costco continues to pay their employees more than $20.00 an hour and provides them with good benefits and health care. Costco still has the post-war era corporate philosophy because to them; employee turnovers are costly and unnecessary.

The politicians in Washington are fiddling around the edges in trying to come up with a plan that will not hurt their reelection prospects. It shouldn't be a secret that eliminating loopholes and capping deductions for the wealthy will not get you close to $800 billion, so marginal tax rates will have to be raised on the rich. I think a deal could be made by raising the marginal rates by 3% and increasing the capital gains rate by 5% for now. The entitlement cuts will be a little more difficult because I can't see how you would cut spending on the beneficiaries. There's talked of rising the Medicare requirement age to 67 but I would only be for that only after the Affordable Care Act makes it a seamless transition. I don't think it makes sense to have 65 year old go two years without health insurance. I think it's wise to give waivers to those who work in the more labor intensive jobs.

I'm not that impressed that seven republicans have vowed to break the Grover Norquist pledge of never raising taxes, to keep from going over the fiscal cliff. The senate already has a bipartisan bill that retains the Bush tax cuts for 98% of the people. The challenge will be in the House of Representatives where the GOP currently has a 50 seat margin. The 88 Tea Party members think they have a mandate not to raise taxes or the debt ceiling. We have to remember that not raising taxes is a core principle belief for most republicans. Let's just say that 100 republicans will not vote for a tax increase under any conditions; that leaves 141 republicans to get the 27 votes from (if all the 191 democrats vote yes) to pass a bill. Nearly all of the 141 republicans will not be challenged by democrat but they will be challenged by a more conservative republican.

I'm hoping the marginal rate for those making more than $250,000 gets raised to 39% and hedge fund managers get taxed at ordinary rates rather than the capital gains rate. I don't want to punish wealth but the wealthy will still go out and work just as hard for a 70% profit as they did for an 85% profit. It's been proven that higher tax rates will make the wealthy will keep more money in their companies to make it more profitable rather than buying more expensive toys.

We are a consumer driven economy, so we will remain stagnant unless employees have more money to spend.Oh yes, higher wages will be passed onto other consumers but according to a study I saw, that would only be about $171 yearly. If you believe we are all in this together, then it's well worth the extra cost when you consider the alternative.

My sympathies don't lie with corporations because they are doing quite well and they have most of America fooled. The corporations have gotten out of costly pensions; they weren't fully funding anyway and have gone 401ks. The average worker today will never retire if we don't do something about income inequality. It’s been proven that workers aren’t good investors, so they will never accumulate the funds necessary to retire in comfort. There is so much I could tell you about 401ks but it would take another blog. For example, it worked for me but we were in a bubble when I made all my gains and by a streak of good luck, I converted those gains to IRAs before the bubble burst.

If we don't want any form of socialism, then we need to do something about plutocracy. I'm all for market based solutions but if three million people have 99% of the wealth, that system alone is unsustainable. Redistribution is not a bad word if it's used in proper context.

I feel much better now, because writing this blog allows me to release all the frustration I held over Thanksgiving weekend. I wanted to write about the housing crisis but I’ll save it for another time but when someone tells me that all our problems are because of President Obama, welfare or undocumented workers; don’t be surprised if I unload the rest of my frustration.

It’s been 3 weeks now

It's going on three weeks now but I can't remember a time in my life when I've seen as much resentment to the results of a presidential election from the losing side. I've seen petitions for sessions filed in all 50 states, I also heard of a woman who tried to run over husband because he didn't vote for Romney, a Montana lawmaker (Ron Paul fan) asking to be paid in gold because he lost faith in our currency and then there were those students at the University of Mississippi who burned Obama signs. I can't remember democrats doing any of those things when our candidate lost.

We've gotten to the point to where we consider the protest nonsense a common occurrence and the talk shows hardly mention them. The talk shows are more interested in the future of the new GOP, the fiscal cliff and who knew what and when, in the Petraeus and Benghazi incidents.

The subjects that I mentioned and were all discussed without any general consensus.

This morning David Gregory came up with theory about Benghazi which I haven't heard before but I believe it has a lot of truth to it. I believe senators Lindsey Graham and John McCain hate the administration's policy of having a small footprint in Libya. They wanted a larger military presence in North Africa, Iraq and Afghanistan. "There was already bad blood between U.N. Secretary Susan Rice and John McCain over us leaving Iraq. She also mocked McCain's trip to Iraq ("strolling around the market in a flak jacket"), called his policies "reckless" and said "his tendency is to shoot first and ask questions later. It's dangerous."Today John McCain is the highest-ranking Republican on the Senate Armed Services Committee, but he will no longer hold that position after January because he has been termed out. That's why he wants a brand new Watergate style committee but his colleagues don't see a need for that. I also believe that the CIA was involved in illegal activities and the terrorist attack in Benghazi blew their cover. I don't agree with Senator Graham's point about the administration doctoring the talking points to give the president a political edge. I believe anybody that can read a newspaper knew that the raid on the consulate in Benghazi was a terrorist attack and selective talking points from the White House were not going to change anyone's minds. Again, anyone with a brain knows that elements of Al Qaeda will be around for a long time despite the president's efforts to kill more of their leaders. The American people are not as gullible as some try to make them out to be. If the president withdraws the nomination of Susan Rice to be the next secretary of state; this issue will go away.

The panel on "Morning Joe" tried to make Nancy Pelosi's reluctance to give an inch on and raising the tax on the top 2% as part of the problem. Even Glenn Hubbard, Mitt Romney's top economic adviser, now says the wealthy need to pay more in taxes as part of a budget settlement. Raising the top rates 3or 4% for the top 2% will raise the necessary revenues for a short term fix. The market's just want to see the framework for a solution that doesn't send us back into a recession. The legislators will not have time to tackle a tax reform plan in the lame duck session. The emphasis still needs to be on jobs and growth and reforming Medicaid and Medicare. Once the economy comes back, the American people will have to decide how to pay for the goodies we want. Taxes will inevitably have to be raised on the middle class as part of the solution but not right now.

The trickle down supply side economic theory has run its course and so has the" makers and takers" mantra. I don't think it's going to be easy to convince the GOP constituencies that 47% of American citizens are not lazy or do not want to be productive. There's too many people like Representative Paul Ryan who preach “if you do all the right things, you too can be successful like me" not knowing all the barriers that face the most vulnerable in our society. I was surprised to hear an entrepreneur of a multimillion dollar company say that he needed government resources to pay for job training or else he would have to shut down. I can remember when corporations paid for job training, benefits and still offered a pension.

I'm fairly confident that a bargain will be struck between the political parties to avert our current fiscal cliff but it will be eventually replaced with a brand new one.

I’m reading a good book which I received for my recent birthday called “Who Stole the American Dream?" By Hedrick Smith. The book is about the steps big businesses took to take the reins of economic prosperity away from the middle class. Big businesses got together to form strong lobbyist groups to counter the strong worker unions of the 1970s. They lined the pockets of the politicians who would go out and try to convince us that there was such a thing as " clean coal" and energy efficient corn ethanol. Meanwhile they got out of their union contracts with new lenient bankruptcy laws. They then replaced, pensions with 401K's and made their employees pay more for their health insurance and benefits. Today's businesses do not see the value of higher compensation, which reduces turnover costs, increases employee consumption and productivity. We have so many resources that we will always be an economic giant but, unless we raise the minimum wage substantially, we will constantly see the high unemployment figures and slow economic growth. Yes, a tight market usually demands higher wages but the it's a known fact that we need to change our current economic model to one that suits the world we are living in.

Happy Thanksgiving

Secession!..Are you kidding me?

I was willing to allow the Republicans to sulk for while but the media keeps bomb boarding me with stories of a new kinder, gentler GOP who's now willing to compromise. I don't believe a national party can do a 180°in a week's time. It's still the same people in office, and they're still not willing to raise the tax rates on the millionaires and billionaires. They think because they kept the House of Representatives,it  means that people do not want to raise taxes. I'll get back to that later.

Here in Texas, we have a lot of whiners who are acting like spoiled children over the election results. They (about 85, 000) have petitioned the White House for secession, even though our constitution doesn't allow secession. These low information citizens haven't the foggiest idea of what it would mean if they got their way. What they really are saying is that they don't want to live in a country unless a white republican is president. The White House is required to respond to the petitioners who gathered 25,000 signers, so I hope they use some low-level staffer for that purpose.

The GOP wants to ignore the exit poll where 68% said we should raise taxes on the top 2% as part of the plan to avoid going over the fiscal cliff. I still don't think the president has a mandate, but he does have a lot of leverage this time around. I do like the approach he is taking by negotiating from a position of strength. The president has requested $1.6 trillion in tax increases, which is twice the amount of the grand bargain he originally proposed. He would probably settle for $1.2 trillion in tax increases, which is in the middle. The GOP does not want to raise tax rates on the top 2%, even though we would see immediate results if that were to happen. They would rather talk about eliminating loopholes and deductions, which would have to be negotiated over a longer period of time. It's still about the arithmetic because eliminating loopholes will not get to $1.2 trillion of tax increases over 10 years. The extra revenue would have to come from eliminating the home-mortgage deduction and charitable contributions which will in turn hurt the middle class and slow the recent growth of the housing market. If nothing else, the Democrats put taxes back in the conversation because Republicans were trying to make a case that spending was the only problem. I think once we get over the tax increase barrier, it's going to be easier to talk about creating jobs and avoiding the fight over the debt ceiling.

Louisiana governor, Bobby Jindal, said the GOP needs to stop being the “stupid party" and should stop catering to Wall Street and the rich. You can find similar statement from Newt Gingrich and other GOP surrogates, but the fact remains they were the ones leading the march to stupid. Bobbie Jindal pushed creationism on Louisiana schools, and Newt called President Obama “the food stamp president" who had a 'Kenyan, anti-colonial' world view." Paul Ryan said President Obama won because of a lot of urban votes. What's that supposed to mean? It's a known fact that people that live in the big cities outnumber those who live in rural areas. Then again, Paul Ryan says that the GOP has a mandate because they were reelected. I guess that he discounts the fact that the Democrats picked up at least eight seats (and they're still counting in Arizona) and that was against Republicans in gerrymandered districts. Democrats received more than 500,000 more votes than their republican opponents.

The GOP doesn't have a choice but to change because the days of saying, “I’m for smaller government, lower taxes and liberty" will no longer win elections. Voters want more than partisan talking points. The GOP can't just throw out Marco Rubio and expect to get the Latino vote because it's much more than immigration. The GOP lost the Asian vote by a lot, and they're usually conservative and have a high medium income. They also lost the young voter, the Catholic and the moderate voter. Election results are temporary because it was only two years ago that we thought that the Tea Party had a lot of political influence. We also thought that we couldn't beat all the big money for special-interest groups.

We mustn't lose sight that big money did win in downhill elections. It's said that Karl Rove only got his donors, a 1.29% margin on their investment, but that's only in the senate and presidential election. We didn't discuss global warming  at all or Afghanistan much, so we will continue not having a national discussion on those matters for a while. That suits the defense contractors and those who do not want t curb their greenhouse emissions.

Rand Paul's immigration proposals are to the left of any Democrat because he's insisting on a path to citizenship (with conditions) for the 12, million undocumented people who are already here. As a true libertarian, Senator Paul wants legislation to decriminalize marijuana use. He thinks he will get something done because no one questions his conservative credentials. We'll see.

The local Republicans are pretty quiet, but that's understandable because that's what I did after the 2000 election. The only difference is that I had to accept my minority status in this county, so I lost interest in the local and state issues (if I ever had any) and devoted all my attention on national issues. I accepted the saying that “the pendulum swings both ways" but our local conservatives will never accept that saying. Several local Republicans think that all they have to do is use the word “liberal" in the pejorative and say that they are conservative. That may work in this county but enjoy it while you can because being superior is always subjective.

On a lighter note,it will be interesting to hear from those who went to the see the movie "2016: Obama's America"  and were gullible enough to believe the theme.  Nah,like the Fox viewers they will continue to believe because it's easier than saying " I was wrong."