OK, let's face it. There are probably a million and one reasons why I won't vote for Tim Pawlenty. But the number one reason rises above politics and above personality. That reason is Jeremy Giefer.
Jeremy Giefer was convicted in Minnesota of statutory rape. When Giefer was 19 he impregnated his 14 year-old girlfriend. Now, I know there are a lot of you who will say that this is not the type of crime that deserves the type of shame and lifelong stigma that comes with a child sex conviction (actually I'm hoping that there are more of you who think that this is the type of crime that deserves this), especially since he ended up marrying the "victim" of this crime and they went on to have a family together and are still married.
Certainly Tim Pawlenty thought that this was not the sort of crime that deserved this type of punishment under these circumstances. That's because Tim Pawlenty pardoned Jeremy Giefer. Now, the fact that Pawlenty made such a decision alone may not persuade you that he is not fit for the highest office in the land. Governors pardon people all the time and usually these go without any negative repercussions down the road.
However, in this case, there are serious repurcussions. You see, recently Jeremy Giefer was indicted on charges that he repeatedly raped his daughter, the daughter who was "State's Exhibit Number One" in the statutory rape case for which Giefer was convicted. He raped her starting when she was age 9 and continued to rape her until she was 16. Giefer has yet to face trial on these charges. Of course when he is tried, evidence of the prior rape will not come in because he was pardoned for it. Oh, and of course if he is convicted he will receive a lighter sentence having officially never been convicted of a previous child sex crime.
Still, you say, how could Governor Pawlenty have foreseen this? I mean, it's not like he has a crystal ball. And even if he could have foreseen it, the Governor's action didn't let Giefer out of jail. Nothing in the pardon would have prevented Giefer from committing these heinous acts against his daughter. This, anyway, was the line of defense coming from Pawlenty's camp when news of the charges against Giefer hit the press.
But, there is one other part of the story that is the real reason that I feel this incident shows that Pawlenty simply doesn't have the decision making capability necessary to be President. You see, when Giefer made his application to the Board of Pardons, he listed as a reason for needing the pardon that he and his wife wanted to open a day care in their home and the fact that Giefer was a registered child sex offender prevented them from being able to do this. Apparently, this didn't raise any red flags in Pawlenty's mind, nor in the mind of the rest of the board.
Child rape is a crime of opportunity. This is why we don't let convicted sex offenders live near schools, or playgrounds, or be teachers, or drive school buses, or have day cares in their home. Giefer is a perfect example of this. He initially fed his evil by befriending and raping a girl too young to give consent, legally or otherwise. He got away with this crime until he impregnated the girl and was thus charged with a crime. The criminal justice system gave him his next opportunity by giving him a paltry jail sentence of 45 days. Society gave him his next opportunity by allowing him to marry his victim, thereby giving him the opportunity to raise and groom his next victim, his own daughter.
But Pawlenty gave him an opportunity that is beyond belief. Because Pawlenty's pardon of Giefer gave him the opportunity to have parents from around his neighborhood send their children into the lion's den of their home. Of course, responsible parents would never send their children to be cared for by someone who is a registered child sex offender. But, they never would know this thanks to the pardon that Pawlenty gave Giefer so that he could have the witless parents send their children to his home.
To date, there have been no reports of Giefer raping or otherwise molesting the children that were in his and his wife/victim's care. Hopefully there weren't any. However, experience and logic would both argue against this hope, as child sex offenders don't get better and they don't give up opportunities to re-offend -- don't believe me, just ask Giefer's daughter.
It is my hope that Pawlenty is faced with the picture of Jeremy Giefer, pardoned child rapist, over and over throughout his campaign for President. I hope that his Republican opponents don't miss an opportunity to make all of America become very familiar with Jeremy Giefer. If, for some reason Pawlenty ends up getting the GOP nomination, I hope that the DNC, the Obama campaign and any other wealthy citizen with money to blow on issue-oriented television commercials goes all Willie Horton on Pawlenty's ass, repeatedly showing Jeremy Giefer welcoming children into his lair.
Look, Tim Pawlenty wants a job that has responsibilities that dwarf any other job in the world. If he is too stupid or too careless to see that pardoning a convicted child rapist so he can open a day care is a bad idea, then I sure as hell don't want him in a position to decide whether to send in bombers or not.
Tuesday, May 24, 2011
Sunday, May 22, 2011
Perfect Songs
Many of you reading this probably do not know that I fancy myself a songwriter. Or at least I used to. I have written hundreds of songs over the years, most of which are lost to the sands of time. However, I haven't written any (or at least completed any) in probably about 7 or 8 years.
When I was young, songs would come to me completed in my mind. As I wrote them down, it was more that I was taking dictation from some other force than making up words and lyrics from my mind. Anything I did, any experience I had, any issue that concerned me, was quickly translated into a song. As I grew older, the songs came less frequently and usually involved more work on my part -- working out chord changes, coming up with lyrics in a more fashioned way. Sometimes this would take hours, sometimes it would take days or weeks. But the songs still came.
The last complete song that I wrote came to me almost in the same way that songs used to. I remember going through the song and writing down the lyrics as I watched the movie "American Splendor". Not only was it the last song that I wrote, but it also was probably the best.
As I have grown older, my experiences translated less and less into music. Perhaps this is due to me becoming more mature. Perhaps it is just the pressures of life and work taking a toll on creativity. Perhaps my feelings as a middle aged man simply don't lend themselves to song lyrics as my feelings as a teenager or young adult did. In any event, the music doesn't flow any longer and I have come to accept this as time marched on.
However, as someone who has experienced the creativity and power of songwriting, I have come to greatly admire those who write songs for a living. There are many songs I have heard that inspire a feeling of tremendous admiration and just a little bit of envy as I listen to them and think to myself, "Man, I wish I had written that song." These are not necessarily my favorite songs in all instances, but they are songs that for some reason have touched me somehow in a deeply personal way. I refer to them as "Perfect Songs." Many of them you probably have never heard. Many of them are extremely popular. But in every instance, for one reason or another, I consider these songs to be a step above all others I have heard.
Here is a list of some of them in no particular order:
"I Need Love" by Sam Phillips. Sam Phillips has one of the most magical and intriguing voices of any female singer/songwriter I've heard. Her mature lyrics and unique voice transfix listeners as they are drawn into her songs. Her album "Martinis and Bikinis" holds the greatest treasure of Phillips's work. Her single "I Need Love" catches your attention immediately with the first line of the song "I left my conscience like a crying child". The lyrics speak of almost a desperate longing that comes only from years of experiencing life's repeated disappointments. This is definitely a love song but much deeper than your ordinary Top 40 pop fare. Phillips transitions to the chorus describing herself as "broken like a window, I see my blindness now." She then triumphantly proclaims "I need love, not some sentimental prison/I need God, not the political church/I need fire, to melt this frozen sea inside me/I need love."
"Will the Wolf Survive" by Los Lobos. Los Lobos is most famous for their covers of Richie Valens's hits in the movie La Bamba. But, they are a whole lot more than that. Los Lobos is one of the deepest and most creative bands in popular music still to this day. Their music draws deeply on their Mexican-American heritage, but also owes much to traditional folk music, blues, rockabilly and good plain old rock and roll. "Will the Wolf Survive" was their second single off of their first major label release "How Will the Wolf Survive." This deeply emotional song tells the tale of young working class Mexicans in Los Angeles, unable to reach their dreams and desires. Although the members of the band at the time of its release were all in their early 20s this song shows a maturity well beyond their years that still continues to carry this great band through today.
"When Doves Cry" by Prince and the Revolution. This is probably the best known song in my list. In fact, it was the number one selling song of 1984. From the soundtrack to his loosely biographical movie "Purple Rain" Prince goes beyond the usual dirty sexy songwriting that formed the basis of his early career (and much since -- hey, Prince sings better about sex than any person I've ever heard, so if you're good at something do it). When this song and album were released, I really couldn't comprehend the dark beauty of the song, or its incredibly detailed musicality. Only as I grew older did I comprehend that this song tells a tale of deep pain very rare in popular music. The heaviness of the song is more akin songs of bluesmen like Robert Johnson rather than what was on the charts in the early 80s. I now see Prince as rightfully among the best songwriters of his generation. He has penned many great songs, this being the best of them.
"Hold On, Hold On" by Neko Case. It is no secret that Neko Case is my favorite singer. Her rich, expressive voice moves me like no other in existence. This song from her incredible release from a few years back "Fox Confessor Brings the Flood" was one of the first of her songs that I heard. It is also still my favorite. "Fox Confessor" diverged from her earlier more country tinged releases to create a dark, ethereal, foreboding collection of songs. "Hold On, Hold On" fits perfectly into this collection with its darkly comical and deeply self-critical lyrics ("I leave the party at 3 a.m., alone thank God, with a Valium from the bride, it's the devil I love") combined with a pulsating, building guitar line that drives the song from its soft beginning "The most tender place in my heart is for a stranger," quickly into the more confessional "Compared to some I've been around/But I've really tried so hard/That echo chorus lied to me with its hold on hold on hold on hold on" to its emotional climax "And its the devil I love, and it's as funny as real love, and it's as real as true love." Written with the Canadian alt-country band The Sadies, this song still inspires me every time I hear it.
"Bad Reputation" by Freedy Johnston. Freedy Johnston had one hell of a bad breakup. Fortunately because of this he also had one hell of a great album. "This Perfect World" is chock full of pain as Johnston details the end of a relationship that was emotionally crushing. "Bad Reputation" is the greatest song on this great album. It starts out with his confession "I know I've got a bad reputation, and it isn't just talk, talk, talk". He then goes through to describe the torment that has plagued him for seven years since the loss of his relationship. His lyrics are obsessive as he sees his lost love everywhere "Suddenly I'm on the street/Seven years disappear below my feet/Been breaking down/Do you want me now? Do you want me now?" Although the raw emotion of the song tends to border on the psychotic, the emotions are easily understood by anyone who has ever gone through a painful breakup that leaves your heart so shattered that you think you can never put it back together again.
"Heroes" by Jill Sobule. OK, now for something a little lighter. Jill Sobule is best known for her quirky hit "I Kissed a Girl" from the mid 1990s (unlike Katy Perry's song of the same name, Jill meant it and kept doing it). Sobule has continued writing songs ever since continually turning out some of the funniest and most inventive lyrics in modern popular music, although never reaching the commercial success of her first single. "Heroes" is seriously one of the funniest songs I've ever heard, as Sobule lists her heroes foibles and imperfections. "Why are all our heroes so imperfect/Why do they always let us down". Among those listed "William Faulkner drunk and depressed, Dorothy Parker mean, drunk and depressed." Also "T.S. Eliot hated the Jews, FDR couldn't save the Jews, All the French joined the resistance after the war," and "Paul McCartney jealous of John, even more so now that he's gone, and Bob Dylan was so mean to Donovan in that movie." This gem is a three minute laugh riot that ends with Sobule listing several more of her heroes who were "drunk and depressed," causing her to conclude "why don't I just get drunk and depressed."
"England 2, Colombia 0" by Kirsty MacColl. "Tropical Brainstorm" was such a thoroughly enjoyable and inventive album, that it would no doubt be on my list of cd's to have on a deserted island. Posthumously released following her tragic death in a boating collision, this album drew heavily on the English singer's infatuation and immersion in Latin music, especially that of Cuba. It also showed MacColl to be almost as good at writing unabashedly about sex as Prince. This song, one of the many great ones on the collection, tells the story of MacColl being propositioned at a bar by a man who she later learns is married, all of this while watching a soccer game on television between England and Columbia. The soccer game serves as the structure around which the song is built. "You shouldn't have kissed me, you started a fire, but I soon found out you're a serial liar." Driven by Latin horns and rhythms the song continues to build as the flirty conversation builds to more and then is dashed when the man passes out and his friend tells the storyteller that he is married, all while continuing to return to its base of the soccer game. "You lied about your status, you lied about your life, You never mentioned your three children, or the fact you have a wife, and it's England 2, Colombia nil and I know just how those Colombians feel."
"Side of the Road" by Lucinda Williams. I would be proud to have written anything half as good as anything that Lucinda Williams has put out during her entire career. Her album "Car Wheels on a Gravel Road" may very well be as close to a perfect album a I've ever heard. But for her "perfect song" you have to go back to her first self-titled album. Every once in a while a song captures such stripped down emotion that it almost takes one aback. "Side of the Road" is one of those songs. This tale of self discovery and independence is so raw and naked that it has brought a tear to my eye on more than one occasion. It starts out "You wait in the car, by the side of the road, let me go and stand a while, I want to know you're there, but I want to be alone. If only for a minute or two, I want to know how it feels to be without you, to know the touch of my own skin, against the sun, against the wind." Like most of Williams's songs, there is no great crescendo or emotional bridge. The beauty is in its simplicity and the emotion is shown through the honesty with which the song is delivered. At once the song shows both great love and devotion along with loneliness and longing. "If I stray too far away from you, don't try and find me/It doesn't mean I don't love you, it doesn't mean that I don't want to lay beside you/It only means I need a little time to follow that unbroken line." All I can say, is "Damn, that is good!"
"Ohio" by Neil Young. Usually when one sets out to write a "protest song" it comes one one of two ways both of which are bad. It is either corny or it is preachy. "Ohio" is neither. This song about the murders of unarmed college students at Kent State University by National Guardsmen assigned to patrol Vietnam protests on campus is three minutes of angry perfection. Young wrote the song immediately upon hearing the news of the killings. The song was completed within hours of the incident and was recorded and released as a single within the week. It is the rawness of Young's emotion that comes through and makes this perhaps the perfect protest song of all time. "Tin soldiers and Nixon coming/We're finally on our own/This summer I hear the drumming/Four dead in Ohio." If Young had taken the time to collect his thoughts or emotions, this would not have been near the song it is. Even more than 40 years removed from the incident, listening to the song today, you understand completely the feeling of the nation on that day. Incredible stuff.
"A Change is Gonna Come" by Sam Cooke. I am constantly amazed by just how many hit songs Sam Cooke wrote and sang is his all too brief life. I really love almost all of Cooke's songs, but let's face it -- most of them are simple throw-away pop songs. "Everybody Wants to Cha-Cha-Cha", "Working on the Chain Gang," "Darling You Thrill Me" even "Cupid." All of them great songs, but none of them would predict the immensity of his thrilling emotional epic "A Change Is Gonna Come". From its very first line "I was born by the river, in a little tent, and just like the river I've been running, ever since." the listener is treated to such emotional longing and pain that one can't help but be moved. Cooke never lets up at any point during the classic. Picturing the singer recording the song, I have always seen someone twisted in pain with tears streaming down his eyes, almost begging the listener to believe that change is indeed going to come. "It's been a long, a long time coming, but I know, a Change is gonna come, Oh yes it will." I simply can't write anything that good. In fact, I'm not sure that anyone else can either.
There's lots of other songs that would make this list. It's far from exhaustive. If you haven't heard some of these songs, I encourage you to check them out on Amazon or iTunes. Also feel free to add your own selections in the comments section.
Maybe I'll be back to my angry diatribes on the economy and that banksters next week. Or maybe I'll continue on the musical kick. I have something percolating in the back of my mind on all of the reasons I hate Rod Stewart that might be interesting.
When I was young, songs would come to me completed in my mind. As I wrote them down, it was more that I was taking dictation from some other force than making up words and lyrics from my mind. Anything I did, any experience I had, any issue that concerned me, was quickly translated into a song. As I grew older, the songs came less frequently and usually involved more work on my part -- working out chord changes, coming up with lyrics in a more fashioned way. Sometimes this would take hours, sometimes it would take days or weeks. But the songs still came.
The last complete song that I wrote came to me almost in the same way that songs used to. I remember going through the song and writing down the lyrics as I watched the movie "American Splendor". Not only was it the last song that I wrote, but it also was probably the best.
As I have grown older, my experiences translated less and less into music. Perhaps this is due to me becoming more mature. Perhaps it is just the pressures of life and work taking a toll on creativity. Perhaps my feelings as a middle aged man simply don't lend themselves to song lyrics as my feelings as a teenager or young adult did. In any event, the music doesn't flow any longer and I have come to accept this as time marched on.
However, as someone who has experienced the creativity and power of songwriting, I have come to greatly admire those who write songs for a living. There are many songs I have heard that inspire a feeling of tremendous admiration and just a little bit of envy as I listen to them and think to myself, "Man, I wish I had written that song." These are not necessarily my favorite songs in all instances, but they are songs that for some reason have touched me somehow in a deeply personal way. I refer to them as "Perfect Songs." Many of them you probably have never heard. Many of them are extremely popular. But in every instance, for one reason or another, I consider these songs to be a step above all others I have heard.
Here is a list of some of them in no particular order:
"I Need Love" by Sam Phillips. Sam Phillips has one of the most magical and intriguing voices of any female singer/songwriter I've heard. Her mature lyrics and unique voice transfix listeners as they are drawn into her songs. Her album "Martinis and Bikinis" holds the greatest treasure of Phillips's work. Her single "I Need Love" catches your attention immediately with the first line of the song "I left my conscience like a crying child". The lyrics speak of almost a desperate longing that comes only from years of experiencing life's repeated disappointments. This is definitely a love song but much deeper than your ordinary Top 40 pop fare. Phillips transitions to the chorus describing herself as "broken like a window, I see my blindness now." She then triumphantly proclaims "I need love, not some sentimental prison/I need God, not the political church/I need fire, to melt this frozen sea inside me/I need love."
"Will the Wolf Survive" by Los Lobos. Los Lobos is most famous for their covers of Richie Valens's hits in the movie La Bamba. But, they are a whole lot more than that. Los Lobos is one of the deepest and most creative bands in popular music still to this day. Their music draws deeply on their Mexican-American heritage, but also owes much to traditional folk music, blues, rockabilly and good plain old rock and roll. "Will the Wolf Survive" was their second single off of their first major label release "How Will the Wolf Survive." This deeply emotional song tells the tale of young working class Mexicans in Los Angeles, unable to reach their dreams and desires. Although the members of the band at the time of its release were all in their early 20s this song shows a maturity well beyond their years that still continues to carry this great band through today.
"When Doves Cry" by Prince and the Revolution. This is probably the best known song in my list. In fact, it was the number one selling song of 1984. From the soundtrack to his loosely biographical movie "Purple Rain" Prince goes beyond the usual dirty sexy songwriting that formed the basis of his early career (and much since -- hey, Prince sings better about sex than any person I've ever heard, so if you're good at something do it). When this song and album were released, I really couldn't comprehend the dark beauty of the song, or its incredibly detailed musicality. Only as I grew older did I comprehend that this song tells a tale of deep pain very rare in popular music. The heaviness of the song is more akin songs of bluesmen like Robert Johnson rather than what was on the charts in the early 80s. I now see Prince as rightfully among the best songwriters of his generation. He has penned many great songs, this being the best of them.
"Hold On, Hold On" by Neko Case. It is no secret that Neko Case is my favorite singer. Her rich, expressive voice moves me like no other in existence. This song from her incredible release from a few years back "Fox Confessor Brings the Flood" was one of the first of her songs that I heard. It is also still my favorite. "Fox Confessor" diverged from her earlier more country tinged releases to create a dark, ethereal, foreboding collection of songs. "Hold On, Hold On" fits perfectly into this collection with its darkly comical and deeply self-critical lyrics ("I leave the party at 3 a.m., alone thank God, with a Valium from the bride, it's the devil I love") combined with a pulsating, building guitar line that drives the song from its soft beginning "The most tender place in my heart is for a stranger," quickly into the more confessional "Compared to some I've been around/But I've really tried so hard/That echo chorus lied to me with its hold on hold on hold on hold on" to its emotional climax "And its the devil I love, and it's as funny as real love, and it's as real as true love." Written with the Canadian alt-country band The Sadies, this song still inspires me every time I hear it.
"Bad Reputation" by Freedy Johnston. Freedy Johnston had one hell of a bad breakup. Fortunately because of this he also had one hell of a great album. "This Perfect World" is chock full of pain as Johnston details the end of a relationship that was emotionally crushing. "Bad Reputation" is the greatest song on this great album. It starts out with his confession "I know I've got a bad reputation, and it isn't just talk, talk, talk". He then goes through to describe the torment that has plagued him for seven years since the loss of his relationship. His lyrics are obsessive as he sees his lost love everywhere "Suddenly I'm on the street/Seven years disappear below my feet/Been breaking down/Do you want me now? Do you want me now?" Although the raw emotion of the song tends to border on the psychotic, the emotions are easily understood by anyone who has ever gone through a painful breakup that leaves your heart so shattered that you think you can never put it back together again.
"Heroes" by Jill Sobule. OK, now for something a little lighter. Jill Sobule is best known for her quirky hit "I Kissed a Girl" from the mid 1990s (unlike Katy Perry's song of the same name, Jill meant it and kept doing it). Sobule has continued writing songs ever since continually turning out some of the funniest and most inventive lyrics in modern popular music, although never reaching the commercial success of her first single. "Heroes" is seriously one of the funniest songs I've ever heard, as Sobule lists her heroes foibles and imperfections. "Why are all our heroes so imperfect/Why do they always let us down". Among those listed "William Faulkner drunk and depressed, Dorothy Parker mean, drunk and depressed." Also "T.S. Eliot hated the Jews, FDR couldn't save the Jews, All the French joined the resistance after the war," and "Paul McCartney jealous of John, even more so now that he's gone, and Bob Dylan was so mean to Donovan in that movie." This gem is a three minute laugh riot that ends with Sobule listing several more of her heroes who were "drunk and depressed," causing her to conclude "why don't I just get drunk and depressed."
"England 2, Colombia 0" by Kirsty MacColl. "Tropical Brainstorm" was such a thoroughly enjoyable and inventive album, that it would no doubt be on my list of cd's to have on a deserted island. Posthumously released following her tragic death in a boating collision, this album drew heavily on the English singer's infatuation and immersion in Latin music, especially that of Cuba. It also showed MacColl to be almost as good at writing unabashedly about sex as Prince. This song, one of the many great ones on the collection, tells the story of MacColl being propositioned at a bar by a man who she later learns is married, all of this while watching a soccer game on television between England and Columbia. The soccer game serves as the structure around which the song is built. "You shouldn't have kissed me, you started a fire, but I soon found out you're a serial liar." Driven by Latin horns and rhythms the song continues to build as the flirty conversation builds to more and then is dashed when the man passes out and his friend tells the storyteller that he is married, all while continuing to return to its base of the soccer game. "You lied about your status, you lied about your life, You never mentioned your three children, or the fact you have a wife, and it's England 2, Colombia nil and I know just how those Colombians feel."
"Side of the Road" by Lucinda Williams. I would be proud to have written anything half as good as anything that Lucinda Williams has put out during her entire career. Her album "Car Wheels on a Gravel Road" may very well be as close to a perfect album a I've ever heard. But for her "perfect song" you have to go back to her first self-titled album. Every once in a while a song captures such stripped down emotion that it almost takes one aback. "Side of the Road" is one of those songs. This tale of self discovery and independence is so raw and naked that it has brought a tear to my eye on more than one occasion. It starts out "You wait in the car, by the side of the road, let me go and stand a while, I want to know you're there, but I want to be alone. If only for a minute or two, I want to know how it feels to be without you, to know the touch of my own skin, against the sun, against the wind." Like most of Williams's songs, there is no great crescendo or emotional bridge. The beauty is in its simplicity and the emotion is shown through the honesty with which the song is delivered. At once the song shows both great love and devotion along with loneliness and longing. "If I stray too far away from you, don't try and find me/It doesn't mean I don't love you, it doesn't mean that I don't want to lay beside you/It only means I need a little time to follow that unbroken line." All I can say, is "Damn, that is good!"
"Ohio" by Neil Young. Usually when one sets out to write a "protest song" it comes one one of two ways both of which are bad. It is either corny or it is preachy. "Ohio" is neither. This song about the murders of unarmed college students at Kent State University by National Guardsmen assigned to patrol Vietnam protests on campus is three minutes of angry perfection. Young wrote the song immediately upon hearing the news of the killings. The song was completed within hours of the incident and was recorded and released as a single within the week. It is the rawness of Young's emotion that comes through and makes this perhaps the perfect protest song of all time. "Tin soldiers and Nixon coming/We're finally on our own/This summer I hear the drumming/Four dead in Ohio." If Young had taken the time to collect his thoughts or emotions, this would not have been near the song it is. Even more than 40 years removed from the incident, listening to the song today, you understand completely the feeling of the nation on that day. Incredible stuff.
"A Change is Gonna Come" by Sam Cooke. I am constantly amazed by just how many hit songs Sam Cooke wrote and sang is his all too brief life. I really love almost all of Cooke's songs, but let's face it -- most of them are simple throw-away pop songs. "Everybody Wants to Cha-Cha-Cha", "Working on the Chain Gang," "Darling You Thrill Me" even "Cupid." All of them great songs, but none of them would predict the immensity of his thrilling emotional epic "A Change Is Gonna Come". From its very first line "I was born by the river, in a little tent, and just like the river I've been running, ever since." the listener is treated to such emotional longing and pain that one can't help but be moved. Cooke never lets up at any point during the classic. Picturing the singer recording the song, I have always seen someone twisted in pain with tears streaming down his eyes, almost begging the listener to believe that change is indeed going to come. "It's been a long, a long time coming, but I know, a Change is gonna come, Oh yes it will." I simply can't write anything that good. In fact, I'm not sure that anyone else can either.
There's lots of other songs that would make this list. It's far from exhaustive. If you haven't heard some of these songs, I encourage you to check them out on Amazon or iTunes. Also feel free to add your own selections in the comments section.
Maybe I'll be back to my angry diatribes on the economy and that banksters next week. Or maybe I'll continue on the musical kick. I have something percolating in the back of my mind on all of the reasons I hate Rod Stewart that might be interesting.
Wednesday, May 18, 2011
Who Is John Galt? Well, He Sure As Hell Isn't You!
Let me preface this outright attack on Ayn Rand and all the mouth breathing lemmings who spout her pseudo-philosophical garbage by making a confession. I actually really like Ms. Rand's books. Really. Not joking. I think both Atlas Shrugged and The Fountainhead and to a lesser extent We The Living are great works of fiction (although Anthem is just self-congratulatory horseshit). But, that is the point. They are FICTION. They are not relevant at all to the real world much less the basis of a political and social philosophy.
There was a lot of excitement, especially among the Tea Party set when the movie version of Rand's epic novel Atlas Shrugged was released in theaters. The thought was that the movie version of the 1200+ page novel would introduce Rand's unique world view to a whole new and expanded audience. I thought it a bit ironic that a philosophy that holds intellectualism and reason as its highest aim would need a movie to indoctrinate those too lazy to read a freaking novel. Any of the Tea Party fascists who start quoting Rand's work now after seeing the movie remind me of the assholes in high school who were too lazy to read a novel for the book report and then were shocked when they received a failing grade because they didn't realize that the movie version of the Scarlett Letter didn't end the same way as the novel.
But the excitement surrounding the movie made me think about the amazing fact that such a morally bankrupt and priggish philosophy as Objectivism had managed to not only survive so long, but that it had gained a new following among the least likely people to identify with its ideals -- the Tea Party. I can understand a bunch of Wall Street investment bank bastards using Rand's writings to justify their systemic destruction of the middle class through fraud and deceit, but when the same individuals who are being destroyed by these same bastards start adopting the same philosophy as their own, something has to be wrong.
Then it hit me. Rand's novels are so well constructed and her writing so persuasive that the reader inevitably identifies with the protagonists in an incredibly strong fashion. One might even think that the book is talking about them. Of course for any rational person this feeling is fleeting as they quickly remember that this is indeed a work of fiction and that the real world is not that which Rand has created. But, if you have such a demented sense of self-importance as many of those involved in the Tea Party movement seem to have, this becomes an actual part of your warped sense of reality.
So, in other words, Michelle Bachmann actually thinks that she is Dagny Taggart. Donald Trump actually thinks that he is John Galt. Hell, even that angry old fart at the Congressional town hall sitting in his Hoverround yelling through his oxygen tank to keep your damn government hands off of my Medicaid actually thinks that he is Hank Reardon. Forget about the fact that you don't know that the Revolutionary War started in Massachusetts not New Hampshire. Forget about the fact that you've declared bankruptcy multiple times to keep from paying your debts. Forget about the fact that you are too stupid to understand that the very chair you are sitting in was paid for with taxpayer money. You are a Creator and all of those "others" are the Looters keeping you from fulfilling your dreams. If they would just get off of your back, all the riches in the world would be yours. They are the ones that have been holding you back.
In a way, they aren't that different from Rand herself. Ayn Rand was born Alisa Rosenbaum in Russia 10 years prior to the Bolshevik Revolution that ushered in an era of communism and decades of despotic rule in the Soviet Union. After her family suffered great deprivation at the hands of communist rulers, they fled to the United States. Rand's early childhood experiences under communism grew into a lifetime hatred of anything that had even a hint of communism and a zealous championing of its opposite economic philosophy of capitalism. The fervor with which Rand professed the ideals of capitalism remind me of many of the people with whom I attended college. She's very much like the upper middle class girl whose parents belonged to the local country club, who dated the quarterback and was prom and homecoming queen who on a whim takes a Womens' Studies class the second semester of her Freshman year and suddenly stops shaving her legs, smells of patchouli and constantly rants that I am part of the white, male, corporate, bourgeois establishment that must be destroyed by any means necessary. Rand was just the Bizzarro World version.
Rand, like her modern tea party contemporaries fell very much short of the ideals that the characters in her novels presented. Of course, you would never know that if you met her. Rand saw herself as the leader of a movement that was going to save the world from the destructive forces of governments which she saw as standing in the way of business and creation by means of taxation, regulation and redistribution of wealth. Her philosophy can be best summed up as "sharing is bad." Although her philosophy is still used by many in power as a basis for their various policies, especially those on the right, Rand was never as successful or influential in her life as she herself believed.
But, Objectivism somehow keeps its hold in our society. You can hear echoes of John Galt's seemingly endless speech which served as the climax of Atlas Shrugged everytime you see some jackass executive from Goldman-Sachs or J.P. Morgan going on about how government regulation stifles their ability to create innovative new financial vehicles that diversify risk and create efficiencies in the market (translation: they keep us from screwing the consumer repeatedly by fraudulently cooking the books and inflating our bottom line) or everytime you see a right wing politician going on about how the government is attacking your freedom with this or that law (translation: trying to protect the consumer from being repeatedly screwed by the jackass executives at Goldman-Sachs or J.P. Morgan).
I encourage you, though, to read Rand's books. They are quite entertaining. Or, if you must, watch the movie (it's in three parts, so it might actually be more painful than reading the book). Just remember -- this is the real world and you aren't John Galt.
There was a lot of excitement, especially among the Tea Party set when the movie version of Rand's epic novel Atlas Shrugged was released in theaters. The thought was that the movie version of the 1200+ page novel would introduce Rand's unique world view to a whole new and expanded audience. I thought it a bit ironic that a philosophy that holds intellectualism and reason as its highest aim would need a movie to indoctrinate those too lazy to read a freaking novel. Any of the Tea Party fascists who start quoting Rand's work now after seeing the movie remind me of the assholes in high school who were too lazy to read a novel for the book report and then were shocked when they received a failing grade because they didn't realize that the movie version of the Scarlett Letter didn't end the same way as the novel.
But the excitement surrounding the movie made me think about the amazing fact that such a morally bankrupt and priggish philosophy as Objectivism had managed to not only survive so long, but that it had gained a new following among the least likely people to identify with its ideals -- the Tea Party. I can understand a bunch of Wall Street investment bank bastards using Rand's writings to justify their systemic destruction of the middle class through fraud and deceit, but when the same individuals who are being destroyed by these same bastards start adopting the same philosophy as their own, something has to be wrong.
Then it hit me. Rand's novels are so well constructed and her writing so persuasive that the reader inevitably identifies with the protagonists in an incredibly strong fashion. One might even think that the book is talking about them. Of course for any rational person this feeling is fleeting as they quickly remember that this is indeed a work of fiction and that the real world is not that which Rand has created. But, if you have such a demented sense of self-importance as many of those involved in the Tea Party movement seem to have, this becomes an actual part of your warped sense of reality.
So, in other words, Michelle Bachmann actually thinks that she is Dagny Taggart. Donald Trump actually thinks that he is John Galt. Hell, even that angry old fart at the Congressional town hall sitting in his Hoverround yelling through his oxygen tank to keep your damn government hands off of my Medicaid actually thinks that he is Hank Reardon. Forget about the fact that you don't know that the Revolutionary War started in Massachusetts not New Hampshire. Forget about the fact that you've declared bankruptcy multiple times to keep from paying your debts. Forget about the fact that you are too stupid to understand that the very chair you are sitting in was paid for with taxpayer money. You are a Creator and all of those "others" are the Looters keeping you from fulfilling your dreams. If they would just get off of your back, all the riches in the world would be yours. They are the ones that have been holding you back.
In a way, they aren't that different from Rand herself. Ayn Rand was born Alisa Rosenbaum in Russia 10 years prior to the Bolshevik Revolution that ushered in an era of communism and decades of despotic rule in the Soviet Union. After her family suffered great deprivation at the hands of communist rulers, they fled to the United States. Rand's early childhood experiences under communism grew into a lifetime hatred of anything that had even a hint of communism and a zealous championing of its opposite economic philosophy of capitalism. The fervor with which Rand professed the ideals of capitalism remind me of many of the people with whom I attended college. She's very much like the upper middle class girl whose parents belonged to the local country club, who dated the quarterback and was prom and homecoming queen who on a whim takes a Womens' Studies class the second semester of her Freshman year and suddenly stops shaving her legs, smells of patchouli and constantly rants that I am part of the white, male, corporate, bourgeois establishment that must be destroyed by any means necessary. Rand was just the Bizzarro World version.
Rand, like her modern tea party contemporaries fell very much short of the ideals that the characters in her novels presented. Of course, you would never know that if you met her. Rand saw herself as the leader of a movement that was going to save the world from the destructive forces of governments which she saw as standing in the way of business and creation by means of taxation, regulation and redistribution of wealth. Her philosophy can be best summed up as "sharing is bad." Although her philosophy is still used by many in power as a basis for their various policies, especially those on the right, Rand was never as successful or influential in her life as she herself believed.
But, Objectivism somehow keeps its hold in our society. You can hear echoes of John Galt's seemingly endless speech which served as the climax of Atlas Shrugged everytime you see some jackass executive from Goldman-Sachs or J.P. Morgan going on about how government regulation stifles their ability to create innovative new financial vehicles that diversify risk and create efficiencies in the market (translation: they keep us from screwing the consumer repeatedly by fraudulently cooking the books and inflating our bottom line) or everytime you see a right wing politician going on about how the government is attacking your freedom with this or that law (translation: trying to protect the consumer from being repeatedly screwed by the jackass executives at Goldman-Sachs or J.P. Morgan).
I encourage you, though, to read Rand's books. They are quite entertaining. Or, if you must, watch the movie (it's in three parts, so it might actually be more painful than reading the book). Just remember -- this is the real world and you aren't John Galt.
Wednesday, May 4, 2011
What the Hell Is Up With Gas Prices?
As any of you who drive already know, gas prices are ludicrously high. Driving across my state of North Carolina this weekend, I saw prices ranging from $3.75 a gallon up to $3.89. In many places across the country, gas is already far beyond the $4.00 mark, something we haven't seen since 2008. So, what exactly is causing prices to skyrocket and what can be done about it?
If you listen to the reports in the media, you usually get some combination of increased demand worldwide, especially China, or unrest in the Middle East. These are not responsible for the increases you are seeing now. If you follow politics you would believe that it is either a lack of production, especially domestic production (if you are a Republican) or vast greed upon the part of oil companies who are systematically driving up prices to fatten their dividends (if you are a Democrat). Neither of these are the reason, either.
In my attempt to understand this predicament as well as the causes behind the world wide economic catastrophe that we have experienced over the last several years, I have concluded that there are three main causes for the current spike in oil prices. One of these is mentioned in the media regularly, one occasionally, and one pretty much is never mentioned.
1. Turmoil in the Middle East
The recent unrest in the Middle East, from Tunisia to Egypt to Libya is often cited as a main contributor to the rise in oil prices worldwide. This is especially the case for those who look at the normal processes of supply and demand as a root cause for the increased price of oil.
There is no doubt that there are some systemic costs that are caused by the unrest in Libya and other oil producing countries which have had a slight contribution to the price of oil. For instance, oil companies need to pay for additional security to insure that their ships are not attacked by one side or the other. This probably contributes a dollar or two to the total price of oil, but is not responsible for the more than 100% rise in oil prices over the past several months.
A larger role played by turmoil in the Middle East is its psychological effect on the markets, especially futures markets as we will explore in more detail under number 2. As stability decreases in the oil producing regions, there is an obvious unease among investors in oil and other commodities as the fear of the unknown would lead many to expect the worst. This undoubtedly contributes to the rise in prices.
However, the most often referenced reason that the unrest in the Middle East has contributed to increased oil prices is that of supply and demand. It is argued that along with the increased demand by emerging economies, especially China, the ongoing political turmoil has led to a decrease in supply. This is simply rubbish. I have been unable to find one singular instance of any decrease in supply coming from the Middle East or anywhere else. There have been no disruptions in the supply network, not a single tanker bombed or captured, not a single oil field torched.
So why is it that this is the most often cited reason for the increase in prices? The only reason I can fathom for this is that it is the long entrenched belief by economists and market analysts that our markets are rational and therefore they look for a rational explanation for the increase in prices. But even a cursory look at the actual supply and demand worldwide would prove this assumption incorrect in this case. Even with the increased demand in China and other emerging economies, the worldwide demand for oil is stable, if not falling. That combined with the fact we have already discussed that supply is also stable would lead one to believe that costs of oil should be stable or decreasing. Perhaps a slight increase due to increased expense would be believable. But rational factors are not the cause of this spike, so there must be other reasons for prices to be quickly approaching their all time high of $149 a barrel in late Summer 2008.
2. Speculation
In 2008 when oil prices reached their all-time high of $149 a barrel and gas prices were more than $4.50 a gallon all across the U.S., there was eventually much talk about the role that speculators played in the process. While many investment houses like Goldman-Sachs and JP Morgan were downplaying the role that speculators were playing in the oil bubble that was becoming an economic monster, later studies of the commodities market confirmed that speculation in oil futures was the largest contributor to the sharp spike in prices that were seen in the second half of 2008.
It is necessary to understand the role of a speculator in commodities markets and how this role has changed over recent years in order to understand the effect these players had and continue to have in the oil market (as well as other commodities). Commodities markets provide a platform in which producers and buyers of raw goods that are essential for consumers can buy and sell their goods. Farmers, for instance, sell their grain on the commodities markets and say makers of cereal buy the grain from the farmers in the same market. Speculators traditionally provide an important, albeit limited role in the commodities exchanges. Essentially speculators provide fluidity to the markets by contracting to purchase or sell goods at a certain price in the future. This guarantees that even if there are no buyers or sellers that there will still be a market because the farmer will be able to sell to the speculator even if it is at a reduced price if the cereal company is not buying when he is selling.
As long as everyone kept to their role, everything was peachy-keen. So, you ask, how did speculators end up skyrocketing the price of oil (along with lots of other commodities to boot)?
Well, speculators have been allowed to expand their participation in the commodities markets with disastrous effects. During the first Bush administration several investment banks applied to the Commodities and Futures Trade Commission for an exemption which would allow them to trade on commodities exchanges as if they were themselves producers and purchasers of the commodities. The CFTC bought their argument, and issued 16 letters to large speculators owned by investment banks granting them this exception. The problem with this is that unlike producers and purchasers of the commodities themselves, speculators do not have a vested interest in the market for these goods, their only interest is to make as much money off of the deals that they can.
This exemption was amplified at the very end of Clinton's presidency with the passage of both the Gramm-Leach-Bliley Act and more so the Commodity Futures Modernization Act. Gramm-Leach-Bliley was passed in 1999 by a Republican Congress, but with the overwhelming encouragement of Bill Clinton's financial team, most encouraging among them Robert Rubin (this act was referred to by some as the Citigroup Authorization Act since Citigroup could not exist without its passage; Rubin would go on to become one of the highest executives at Citigroup reaping tens of millions of dollars in compensation). Gramm-Leach-Bliley did away with the depression era Glass-Steagall Act which mandated the separation of commercial banks and investment banks.
More important to this discussion is the passage of the Commodity Futures Modernization Act, which insured that all derivative trading would be free from any government regulation. This led directly to every economic disaster that we have seen since, most notably the collapse of Enron (both bills were spearheaded by Sen. Phil Gramm, whose wife Wendy Gramm was head of the CFTC under the first President Bush and was a board member of Enron who benefitted most immediately from the provisions of the act), the real estate bubble of the late 2000s and the ensuing collapse of the credit markets when the real estate bubble burst leading to the bailout of the entire investment banking sector.
In addition to all of these monumental economic disasters caused by the Commodity Futures Modernization Act, it also led to the enormous increase in oil prices in 2008. This is because banks such as Goldman-Sachs and JP Morgan, newly emboldened by the complete deregulation of derivative investments combined with their newly expanded role in the commodities market, developed new derivative investments called commodities index funds. What these derivative investments did was allow investors to invest their money in broad ranges of commodities, sort of the same way that a mutual fund or a 401(k) invests in a broad range of stocks and bonds.
The problem with this is that an investor in this type of fund is going to be in it for the long haul. Because of this, their only position is "long" -- that is, they are betting that the price of these commodities will go up. And up they did. With this amount of money being invested into the commodities markets, the only place for prices to go was up. Matt Taibbi in his book Griftopia gives an example of a person going to a car dealership and saying "Give me $500,000 worth of cars." Since the person doesn't care about the kind of car or the amount of cars, just the price, eventually someone is going to sell him a $500,000 car, and the average car buyer is going to be priced out of the market. The same thing happened with oil. With this many people betting on the cost of oil to go up, and the vast amounts of money that were fueling this bet, the skyrocketing of oil prices became a self-fulfilling prophecy.
Eventually, the bubble burst and prices returned to their pre-bubble levels. So, what has been done since this debacle to prevent this from happening again? Absolutely nothing. Since Congress balked at any serious reform in the Dodd-Frank bill passed late last year, and did nothing to return the role of speculators to their previous limited status on commodities exchanges, or to regulate derivatives into open, transparent exchanges, or to re-establish the necessary separation of commercial and investment banks done away with in 1999, the exact same thing is happening again.
Investment banks are still shilling these disastrous financial products to their customers, "long only" speculators are still driving up the price of commodities to unsustainable and non-realistic levels and we are paying for it at the gas pump.
But this time it will be even worse.
3. The Weak Dollar and Inflation
Last week, Ben Bernanke held a press conference and stated (with a straight face, mind you) that he was leaving the Fed's prime interest rate at 0% because he felt that there had not been significant increases in inflation to warrant an increase in the lending rate and that the dollar was strong and stable. Anyone who has put gas into their car or shopped at a grocery store over the past few months would have to greet such a statement with disbelief. It almost seemed that Bernanke was living in an alternate world.
Well, in a way he was.
The United States judges inflation by the use of the Consumer Price Index (CPI) which is essentially an economic snapshot of prices throughout the economy at any particular time. The CPI, however, due to the findings of the Boskin commission in 1995, doesn't really look at everything. The Boskin commission studied the CPI and through some rather questionable mathematical tricks, decided that inflation had been overestimated by 1.1% over the years. To do this, they implemented among other things "hedonic adjustments" which said that things aren't really more expensive, they are just better and the increased quality of the product cancels out any increase in price; and "substitution adjustments" which said that as prices for products such as say steak increase, consumers substitute less expensive chicken and therefore pay the same price -- the economic equivalent of "let them eat cake." So, in effect, inflation as reported is less than inflation actually.
But, the Fed actually has an even smaller view of what inflation is. The Fed in order to judge inflation uses the Core CPI, which I guess they believe is a more accurate view of inflation to consumers. How, I don't know. The Core CPI excludes energy costs and food. Huh? Yup, that's right, the Fed bases their decisions about the economy on a view of inflation that excludes the two highest expenditures for most consumers.
During the 2008 oil bubble, the U.S. dollar was weak. This was mostly because of the policies of the Federal Reserve. In order to spur growth and encourage investment, the Fed initially under Alan Greenspan and subsequently under Ben Bernanke embarked on an economic Kamikaze mission to continually cut interest rates. This was for the most part loved by Wall Street since it meant they could borrow money very cheaply and then invest it in increasingly risky exotic derivatives and make boatloads of money. However, the other effect that the race to the bottom on interest rates was that the market was flooded with dollars, and the dollar was weakened substantially.
In 2008 the prime Fed interest rate started out at 3.00%. It was lowered throughout the year, and during the height of the oil bubble, the interest rate was about 2.25%. After the collapse of Wall Street investment banks that year, it was lowered again to 2.00% in October and by the end of the year had gone to 0.0% where it has remained ever since. This is unprecedented in the history of the Federal Reserve. It is also reckless.
By the time interest rates were taken down to their current levels at the end of 2008, the oil bubble had long since burst and levels had gone back to their pre-bubble levels. However, there is no doubt that the weak dollar contributed to the increase in gas prices. Since the dollar is still accepted as the world's most common reserve currency, oil is traded world wide in U.S. Dollars. As the U.S. dollar is weakened, the price of oil inevitably increases, as a dollar simply cannot buy as much oil as it had in its former stronger levels.
With interest rates staying at 0% for 2 1/2 years with Bernanke saying there is no plan to adjust the Fed rate upward any time soon, the dollar is far weaker than it was in 2008. When you add to the low interest rates the fact that the Fed has pumped trillions of dollars into the economy in the form of bailouts for failed financial institutions, the dollar is even weaker. The effect this is going to have on price levels being spurred on by speculators is going to be one of magnification. The price of oil is likely to be higher than its previous high of $149. Furthermore, even when the new speculative bubble that we are now seeing bursts, the chances that prices will return to their post-2008 bubble levels is unlikely.
In essence, this means that I would not be surprised if gas reaches in excess of $5.00 per gallon, possibly even eclipsing the $6.00 a gallon level by the end of the Summer. Furthermore, after the bubble bursts (which it inevitably will), we will probably not see gasoline for under $3.00 a gallon for a very long time. This of course will increase costs for food, milk, and other necessities as well, and yes, people around the world will starve. But don't worry, Ben Bernanke says these things don't really matter, so stop whining.
If you listen to the reports in the media, you usually get some combination of increased demand worldwide, especially China, or unrest in the Middle East. These are not responsible for the increases you are seeing now. If you follow politics you would believe that it is either a lack of production, especially domestic production (if you are a Republican) or vast greed upon the part of oil companies who are systematically driving up prices to fatten their dividends (if you are a Democrat). Neither of these are the reason, either.
In my attempt to understand this predicament as well as the causes behind the world wide economic catastrophe that we have experienced over the last several years, I have concluded that there are three main causes for the current spike in oil prices. One of these is mentioned in the media regularly, one occasionally, and one pretty much is never mentioned.
1. Turmoil in the Middle East
The recent unrest in the Middle East, from Tunisia to Egypt to Libya is often cited as a main contributor to the rise in oil prices worldwide. This is especially the case for those who look at the normal processes of supply and demand as a root cause for the increased price of oil.
There is no doubt that there are some systemic costs that are caused by the unrest in Libya and other oil producing countries which have had a slight contribution to the price of oil. For instance, oil companies need to pay for additional security to insure that their ships are not attacked by one side or the other. This probably contributes a dollar or two to the total price of oil, but is not responsible for the more than 100% rise in oil prices over the past several months.
A larger role played by turmoil in the Middle East is its psychological effect on the markets, especially futures markets as we will explore in more detail under number 2. As stability decreases in the oil producing regions, there is an obvious unease among investors in oil and other commodities as the fear of the unknown would lead many to expect the worst. This undoubtedly contributes to the rise in prices.
However, the most often referenced reason that the unrest in the Middle East has contributed to increased oil prices is that of supply and demand. It is argued that along with the increased demand by emerging economies, especially China, the ongoing political turmoil has led to a decrease in supply. This is simply rubbish. I have been unable to find one singular instance of any decrease in supply coming from the Middle East or anywhere else. There have been no disruptions in the supply network, not a single tanker bombed or captured, not a single oil field torched.
So why is it that this is the most often cited reason for the increase in prices? The only reason I can fathom for this is that it is the long entrenched belief by economists and market analysts that our markets are rational and therefore they look for a rational explanation for the increase in prices. But even a cursory look at the actual supply and demand worldwide would prove this assumption incorrect in this case. Even with the increased demand in China and other emerging economies, the worldwide demand for oil is stable, if not falling. That combined with the fact we have already discussed that supply is also stable would lead one to believe that costs of oil should be stable or decreasing. Perhaps a slight increase due to increased expense would be believable. But rational factors are not the cause of this spike, so there must be other reasons for prices to be quickly approaching their all time high of $149 a barrel in late Summer 2008.
2. Speculation
In 2008 when oil prices reached their all-time high of $149 a barrel and gas prices were more than $4.50 a gallon all across the U.S., there was eventually much talk about the role that speculators played in the process. While many investment houses like Goldman-Sachs and JP Morgan were downplaying the role that speculators were playing in the oil bubble that was becoming an economic monster, later studies of the commodities market confirmed that speculation in oil futures was the largest contributor to the sharp spike in prices that were seen in the second half of 2008.
It is necessary to understand the role of a speculator in commodities markets and how this role has changed over recent years in order to understand the effect these players had and continue to have in the oil market (as well as other commodities). Commodities markets provide a platform in which producers and buyers of raw goods that are essential for consumers can buy and sell their goods. Farmers, for instance, sell their grain on the commodities markets and say makers of cereal buy the grain from the farmers in the same market. Speculators traditionally provide an important, albeit limited role in the commodities exchanges. Essentially speculators provide fluidity to the markets by contracting to purchase or sell goods at a certain price in the future. This guarantees that even if there are no buyers or sellers that there will still be a market because the farmer will be able to sell to the speculator even if it is at a reduced price if the cereal company is not buying when he is selling.
As long as everyone kept to their role, everything was peachy-keen. So, you ask, how did speculators end up skyrocketing the price of oil (along with lots of other commodities to boot)?
Well, speculators have been allowed to expand their participation in the commodities markets with disastrous effects. During the first Bush administration several investment banks applied to the Commodities and Futures Trade Commission for an exemption which would allow them to trade on commodities exchanges as if they were themselves producers and purchasers of the commodities. The CFTC bought their argument, and issued 16 letters to large speculators owned by investment banks granting them this exception. The problem with this is that unlike producers and purchasers of the commodities themselves, speculators do not have a vested interest in the market for these goods, their only interest is to make as much money off of the deals that they can.
This exemption was amplified at the very end of Clinton's presidency with the passage of both the Gramm-Leach-Bliley Act and more so the Commodity Futures Modernization Act. Gramm-Leach-Bliley was passed in 1999 by a Republican Congress, but with the overwhelming encouragement of Bill Clinton's financial team, most encouraging among them Robert Rubin (this act was referred to by some as the Citigroup Authorization Act since Citigroup could not exist without its passage; Rubin would go on to become one of the highest executives at Citigroup reaping tens of millions of dollars in compensation). Gramm-Leach-Bliley did away with the depression era Glass-Steagall Act which mandated the separation of commercial banks and investment banks.
More important to this discussion is the passage of the Commodity Futures Modernization Act, which insured that all derivative trading would be free from any government regulation. This led directly to every economic disaster that we have seen since, most notably the collapse of Enron (both bills were spearheaded by Sen. Phil Gramm, whose wife Wendy Gramm was head of the CFTC under the first President Bush and was a board member of Enron who benefitted most immediately from the provisions of the act), the real estate bubble of the late 2000s and the ensuing collapse of the credit markets when the real estate bubble burst leading to the bailout of the entire investment banking sector.
In addition to all of these monumental economic disasters caused by the Commodity Futures Modernization Act, it also led to the enormous increase in oil prices in 2008. This is because banks such as Goldman-Sachs and JP Morgan, newly emboldened by the complete deregulation of derivative investments combined with their newly expanded role in the commodities market, developed new derivative investments called commodities index funds. What these derivative investments did was allow investors to invest their money in broad ranges of commodities, sort of the same way that a mutual fund or a 401(k) invests in a broad range of stocks and bonds.
The problem with this is that an investor in this type of fund is going to be in it for the long haul. Because of this, their only position is "long" -- that is, they are betting that the price of these commodities will go up. And up they did. With this amount of money being invested into the commodities markets, the only place for prices to go was up. Matt Taibbi in his book Griftopia gives an example of a person going to a car dealership and saying "Give me $500,000 worth of cars." Since the person doesn't care about the kind of car or the amount of cars, just the price, eventually someone is going to sell him a $500,000 car, and the average car buyer is going to be priced out of the market. The same thing happened with oil. With this many people betting on the cost of oil to go up, and the vast amounts of money that were fueling this bet, the skyrocketing of oil prices became a self-fulfilling prophecy.
Eventually, the bubble burst and prices returned to their pre-bubble levels. So, what has been done since this debacle to prevent this from happening again? Absolutely nothing. Since Congress balked at any serious reform in the Dodd-Frank bill passed late last year, and did nothing to return the role of speculators to their previous limited status on commodities exchanges, or to regulate derivatives into open, transparent exchanges, or to re-establish the necessary separation of commercial and investment banks done away with in 1999, the exact same thing is happening again.
Investment banks are still shilling these disastrous financial products to their customers, "long only" speculators are still driving up the price of commodities to unsustainable and non-realistic levels and we are paying for it at the gas pump.
But this time it will be even worse.
3. The Weak Dollar and Inflation
Last week, Ben Bernanke held a press conference and stated (with a straight face, mind you) that he was leaving the Fed's prime interest rate at 0% because he felt that there had not been significant increases in inflation to warrant an increase in the lending rate and that the dollar was strong and stable. Anyone who has put gas into their car or shopped at a grocery store over the past few months would have to greet such a statement with disbelief. It almost seemed that Bernanke was living in an alternate world.
Well, in a way he was.
The United States judges inflation by the use of the Consumer Price Index (CPI) which is essentially an economic snapshot of prices throughout the economy at any particular time. The CPI, however, due to the findings of the Boskin commission in 1995, doesn't really look at everything. The Boskin commission studied the CPI and through some rather questionable mathematical tricks, decided that inflation had been overestimated by 1.1% over the years. To do this, they implemented among other things "hedonic adjustments" which said that things aren't really more expensive, they are just better and the increased quality of the product cancels out any increase in price; and "substitution adjustments" which said that as prices for products such as say steak increase, consumers substitute less expensive chicken and therefore pay the same price -- the economic equivalent of "let them eat cake." So, in effect, inflation as reported is less than inflation actually.
But, the Fed actually has an even smaller view of what inflation is. The Fed in order to judge inflation uses the Core CPI, which I guess they believe is a more accurate view of inflation to consumers. How, I don't know. The Core CPI excludes energy costs and food. Huh? Yup, that's right, the Fed bases their decisions about the economy on a view of inflation that excludes the two highest expenditures for most consumers.
During the 2008 oil bubble, the U.S. dollar was weak. This was mostly because of the policies of the Federal Reserve. In order to spur growth and encourage investment, the Fed initially under Alan Greenspan and subsequently under Ben Bernanke embarked on an economic Kamikaze mission to continually cut interest rates. This was for the most part loved by Wall Street since it meant they could borrow money very cheaply and then invest it in increasingly risky exotic derivatives and make boatloads of money. However, the other effect that the race to the bottom on interest rates was that the market was flooded with dollars, and the dollar was weakened substantially.
In 2008 the prime Fed interest rate started out at 3.00%. It was lowered throughout the year, and during the height of the oil bubble, the interest rate was about 2.25%. After the collapse of Wall Street investment banks that year, it was lowered again to 2.00% in October and by the end of the year had gone to 0.0% where it has remained ever since. This is unprecedented in the history of the Federal Reserve. It is also reckless.
By the time interest rates were taken down to their current levels at the end of 2008, the oil bubble had long since burst and levels had gone back to their pre-bubble levels. However, there is no doubt that the weak dollar contributed to the increase in gas prices. Since the dollar is still accepted as the world's most common reserve currency, oil is traded world wide in U.S. Dollars. As the U.S. dollar is weakened, the price of oil inevitably increases, as a dollar simply cannot buy as much oil as it had in its former stronger levels.
With interest rates staying at 0% for 2 1/2 years with Bernanke saying there is no plan to adjust the Fed rate upward any time soon, the dollar is far weaker than it was in 2008. When you add to the low interest rates the fact that the Fed has pumped trillions of dollars into the economy in the form of bailouts for failed financial institutions, the dollar is even weaker. The effect this is going to have on price levels being spurred on by speculators is going to be one of magnification. The price of oil is likely to be higher than its previous high of $149. Furthermore, even when the new speculative bubble that we are now seeing bursts, the chances that prices will return to their post-2008 bubble levels is unlikely.
In essence, this means that I would not be surprised if gas reaches in excess of $5.00 per gallon, possibly even eclipsing the $6.00 a gallon level by the end of the Summer. Furthermore, after the bubble bursts (which it inevitably will), we will probably not see gasoline for under $3.00 a gallon for a very long time. This of course will increase costs for food, milk, and other necessities as well, and yes, people around the world will starve. But don't worry, Ben Bernanke says these things don't really matter, so stop whining.
Thursday, April 28, 2011
Courage of Your Convictions
Much has been written this week about the decision of the huge and hugely distinguished law firm King and Spalding backing out of its decision to represent the GOP members of the House of Representatives in defending the Defense of Marriage Act in the Federal Courts, after the Obama administration's decision to stop defending what they saw (rightly) as an inherently unconstitutional law.
Most of what I have read and heard among colleagues criticized the decision of King and Spalding to back out of their representation saying that they gave into political pressure and hung a client out to dry. Much also has been said of Paul Clement, the partner at King and Spalding who initially agreed to represent the GOP Representatives and who after King and Spalding's decision to drop the client, decided to resign the firm and continue to represent the GOP Republicans at a new firm.
Let me first say that I, too, applaud Mr. Clement's decision to resign based on his strong beliefs and continue his representation. There are few people who would have that kind of courage of their convictions. But, little has been said or written about all of those at King and Spalding, many of whom were not members of the firm, but associates or non-lawyers whose entire future in the legal profession depends on the good relationship with and approval of their superiors in their firm. It is about them, that I would like to write today.
According to a report by Jennifer Bendery and Amanda Terkel at Huffington Post, the decision by King and Spalding to take on the defense of DOMA through the Federal Appeals process sparked a mutiny at the law firm. According to the report, a source inside the firm stated that management was divided and many in the firm were threatening to quit. What is most remarkable is that at least one non-attorney, a litigation paralegal in the Atlanta office went on the record complaining to the leadership of the firm that their decision could harm the standing the firm had in the LGBT community in Atlanta and that many companies and clients could leave as a result of their decision. For someone who is not even an attorney, much less a member, of such an old-school law firm to stand up to management and tell them to their face, on the record, that they are wrong in making a decision about accepting a case is remarkable. The paralegal, Pam Rymin, must have known that she was placing her career, her salary (which is probably quite substantial) and her future not only with this firm but with many others on the line when she made her complaint.
Despite the criticism of the firm for bowing to external pressure in deciding to drop their representation of the House GOP members, it appears that most of the criticism was from within the firm.
King and Spalding does deserve a lot of criticism for how this was handled. These issues should have been vetted through the firm before the decision to accept the representation was made. However, I would posit that there was probably very little thought given to the fact that this decision might even be controversial. I would venture a guess that the older, more senior members of the firm, grew up in an era when gays and lesbians were known, but never heard and more often than not were relegated to their closets if they wanted to succeed. No one would be open about their sexuality, at least if they wanted to advance in their career, and if their sexual orientation was known, it was not something to be flaunted or talked about openly. Certainly no-one would dare consider getting married to a person of the same sex much less expect the State or Federal government to recognize such a thing.
When I was in law school at Wake Forest, not all that long ago, one of the issues that we dealt with within the school was the school's seemingly non-sensical refusal to honor the Martin Luther King, Jr. holiday by canceling classes. Throughout my three years there, several of the students, mostly members of the fledgling National Lawyers' Guild chapter at the still very conservative Southern school and members of the Black Law Student Association ramped up our calls for the administration of the law school to take action. This culminated in a boycott of classes and a noon-time rally during my third year. At the rally, I spoke and asked my fellow students who attended the rally (many of whom boycotted classes that day, many of whom did not but still attended the rally) if they were willing to take the stand they were making that day and carry it into their professional careers. Would they have the courage to stand up to a colleague who made a racist joke, or to a partner in their firm who made decisions on employment or representation in a racially discriminatory way? It would not be easy, I warned. The pressure to conform in our profession is extreme and the risk to your career for standing up to someone who can easily destroy everything you ever worked for is great.
It is for that reason that I am proud of those in the King and Spalding firm who stood up to their superiors and took a stand against their representation of this case. The rights of lesbians, gays and transgendered people is the single most important civil rights issue of our time. The fact that so many inside one of the oldest and most powerful law firms in this nation decided to have the courage of their convictions and make a stand in this fashion is a powerful statement. The times, they are a'changin' and this story of these brave associates and paralegals shows that they are probably changing for the better.
Most of what I have read and heard among colleagues criticized the decision of King and Spalding to back out of their representation saying that they gave into political pressure and hung a client out to dry. Much also has been said of Paul Clement, the partner at King and Spalding who initially agreed to represent the GOP Representatives and who after King and Spalding's decision to drop the client, decided to resign the firm and continue to represent the GOP Republicans at a new firm.
Let me first say that I, too, applaud Mr. Clement's decision to resign based on his strong beliefs and continue his representation. There are few people who would have that kind of courage of their convictions. But, little has been said or written about all of those at King and Spalding, many of whom were not members of the firm, but associates or non-lawyers whose entire future in the legal profession depends on the good relationship with and approval of their superiors in their firm. It is about them, that I would like to write today.
According to a report by Jennifer Bendery and Amanda Terkel at Huffington Post, the decision by King and Spalding to take on the defense of DOMA through the Federal Appeals process sparked a mutiny at the law firm. According to the report, a source inside the firm stated that management was divided and many in the firm were threatening to quit. What is most remarkable is that at least one non-attorney, a litigation paralegal in the Atlanta office went on the record complaining to the leadership of the firm that their decision could harm the standing the firm had in the LGBT community in Atlanta and that many companies and clients could leave as a result of their decision. For someone who is not even an attorney, much less a member, of such an old-school law firm to stand up to management and tell them to their face, on the record, that they are wrong in making a decision about accepting a case is remarkable. The paralegal, Pam Rymin, must have known that she was placing her career, her salary (which is probably quite substantial) and her future not only with this firm but with many others on the line when she made her complaint.
Despite the criticism of the firm for bowing to external pressure in deciding to drop their representation of the House GOP members, it appears that most of the criticism was from within the firm.
King and Spalding does deserve a lot of criticism for how this was handled. These issues should have been vetted through the firm before the decision to accept the representation was made. However, I would posit that there was probably very little thought given to the fact that this decision might even be controversial. I would venture a guess that the older, more senior members of the firm, grew up in an era when gays and lesbians were known, but never heard and more often than not were relegated to their closets if they wanted to succeed. No one would be open about their sexuality, at least if they wanted to advance in their career, and if their sexual orientation was known, it was not something to be flaunted or talked about openly. Certainly no-one would dare consider getting married to a person of the same sex much less expect the State or Federal government to recognize such a thing.
When I was in law school at Wake Forest, not all that long ago, one of the issues that we dealt with within the school was the school's seemingly non-sensical refusal to honor the Martin Luther King, Jr. holiday by canceling classes. Throughout my three years there, several of the students, mostly members of the fledgling National Lawyers' Guild chapter at the still very conservative Southern school and members of the Black Law Student Association ramped up our calls for the administration of the law school to take action. This culminated in a boycott of classes and a noon-time rally during my third year. At the rally, I spoke and asked my fellow students who attended the rally (many of whom boycotted classes that day, many of whom did not but still attended the rally) if they were willing to take the stand they were making that day and carry it into their professional careers. Would they have the courage to stand up to a colleague who made a racist joke, or to a partner in their firm who made decisions on employment or representation in a racially discriminatory way? It would not be easy, I warned. The pressure to conform in our profession is extreme and the risk to your career for standing up to someone who can easily destroy everything you ever worked for is great.
It is for that reason that I am proud of those in the King and Spalding firm who stood up to their superiors and took a stand against their representation of this case. The rights of lesbians, gays and transgendered people is the single most important civil rights issue of our time. The fact that so many inside one of the oldest and most powerful law firms in this nation decided to have the courage of their convictions and make a stand in this fashion is a powerful statement. The times, they are a'changin' and this story of these brave associates and paralegals shows that they are probably changing for the better.
Tuesday, April 19, 2011
Death and Taxes
Yesterday being tax day, I thought it was a good time to write about taxes (I'll leave death for another day). Tax issues are all the rage in Washington as each side of the political aisle tries to make it look as if they are doing something about our national deficit while not actually doing anything that would potentially cost them votes or actually hurt any of their perceived constituencies. In other words, a lot of talk with no real action. The money keeps being spent, the taxes keep being cut, the deficits keep growing and the nation keeps running headlong into oblivion. Nothing new.
I will be probably be the only person in the entire country that says the following: I pay too little in taxes. Last year, my effective tax rate (the percentage of my gross income that I actually ended up paying to the federal government) was somewhere between 7 and 8 percent. Partly that was because I had an exceedingly difficult year with lots of medical bills and I got the advantage of the tax benefit for putting a new water heater in (not because I wanted the tax break, but because my water heater broke). However, it made me think about our tax system and what needs to happen if we really want to get serious about tackling the budget.
I am by no means rich by any way of judging such things. I took a huge hit in the wallet when I decided to leave my position as partner in a private law firm and become a prosecutor. I knew that at the time and I'm still glad that I made the decision because for the most part the trade off of having a schedule that let's me spend more time with my family and the ability to help actively take care of my daughter is worth much more than money. My wife and I do all right, but like most families, every month we scrape by. But after the economic implosion that we saw in 2008 and the lingering effects of that implosion on working people, we are lucky to have what we have and are doing a whole lot better than most.
So, why, you are probably asking yourselves, do I think I should pay more in taxes? Well, I'll give it a whirl.
There is a lot of talk in Washington about "shared sacrifice." With this concept I agree. There should truly be shared sacrifice with all levels of the economic strata paying their fair share. However, nobody in Washington actually means there should be actual shared sacrifice.
The Republicans say the entire issue is about government spending -- well, at least government spending on things they don't like (arts, the poor, trains, healthcare for women, NPR, etc.). Their proposals call for cutting Medicaid, Medicare, Social Security, funding for health care, social services, housing, education, etc. while at the same time giving additional tax cuts to the richest people in the country and further tax breaks to corporations. In fact there was even the proposal for a corporate tax holiday (I'm not sure what paying no taxes while getting a huge tax refund while posting billions of dollars in profit is, but apparently it's not a holiday).
The Democrats as usual a wishy washy about the cuts they propose (they want cuts to things like subsidies for heating oil because apparently it's ok if grandma is a little cold, she has blankets after all), but mostly want to raise taxes on the richest Americans by rolling back the Bush tax cuts for families making more than $250,000 a year, but still extending the tax cuts for the remaining Americans. Now, I'm all in favor of rolling back the Bush tax cuts, if for no other reason than that they have been an abject disaster for our economy, but the problem with the Dems approach is that it, too, fails to truly address the problems that we face with our deficits.
Both plans fall way short of actually putting a dent into our deficit. The cuts proposed by both parties target the absolute smallest part of the federal budget -- domestic discretionary spending. Plus both parties are being cowards when it comes to tax policy -- the Republicans not wanting to tax anybody and the Dems only wanting to tax those that they don't think will vote for them.
I heard David Stockman speaking this weekend on NPR (yes, that bastion of socialist propaganda). I hate to say that Stockman, the architect of Reaganomics in the 1980s, made more sense than anybody who I have heard speak on these subjects in a long time, but he did. He agreed that the Bush tax cuts had to be rolled back, but that they had to be rolled back for everyone. He also said that we couldn't get by just targeting this very small portion of the federal budget, but that we had to look at things like the defense budget and entitlement programs, which are the largest portion of the federal budget if we were going to really get serious about reducing the deficit.
Here are some things that I propose:
First, we have to raise taxes. I have never seen a financial crisis like the one we are currently facing addressed by a proposal of a tax cut. It won't work. It never has worked and it never will work. Taxes have to be raised probably across the board, at least to the point where they were under President Clinton. It's going to hurt. It should hurt. But shared sacrifice involves actual sacrifice, not just screwing everyone else. We should also look at going back to some kind of marginal tax bracket. Maybe not the 91% rate that we had under Eisenhower (although people were doing a lot better back then across the board), but as we continue to see what are obscene salaries going to the wealthiest Americans and the divide between rich and poor becomes cavernous, a marginal rate makes more and more sense.
Second, we need to eliminate many tax credits and simplify our tax code. In 1986, the Reagan administration passed a huge tax cut with bipartisan support, but did so by eliminating most of the corporate tax shelters and loopholes that allowed the richest among us to avoid paying their fair share of taxes. Since then, taxes have remained low, but tax credits and loopholes have found their way back into the system. First, eliminate these insane laws that allow corporations to avoid paying taxes by having off shore addresses and giving them breaks for shipping jobs overseas. But, in addition to this, we have to look at giving up some of our sacred tax credit cows. The one that I think makes the most sense (and I argued adamantly against this for years) is the tax credit for mortgage interest. The reason that I have supported this tax credit is that it made it more affordable for more people to own homes and allowed the middle class to grow and for our economy and society to become more stable. However, with the rising foreclosure rate and the fact that the middle class has been essentially wiped out, the argument for keeping this tax credit is less convincing than it used to be, and I think it is time to toss this one away. There are many others that could be looked at, but this is after all my lunch hour and it is limited.
Third, we need to reform, but strengthen entitlements. People in Washington are freaking out about Social Security, Medicare and Medicaid. We don't need panic. Entitlements don't need major surgery, they need a fitness plan. With Social Security, we may need to look at raising the retirement age. But, before we do, we need to address some other things about Social Security that just don't seem to make sense. First, we need to at least raise, if not eliminate, the cap on salaries subject to Social Security. Right now, only the first $107,000 of an individual's salary is subject to Social Security withholding. Raising this substantially, or eliminating it entirely would create a huge influx of funds into the Social Security Trust Fund. We also need to look at means testing for Social Security recipients. Social Security was intended as a program to prevent older Americans from becoming destitute and wards of the state in their final years. It has worked tremendously in that regard. However, I don't think that Jamie Dimon really needs to be receiving Social Security benefits when he turns 65. Some sort of means testing makes sense. Last with SS, we need to stop raiding the Social Security Trust Fund to pay for other shit not related to Social Security. If ever a trust needed to be a spendthrift trust it is one run by the government. Social Security would be fine, if Washington politicians were not allowed to spend its principal to pay for things not related to Social Security. As for Medicare and Medicaid, we pretty much need to leave them alone. There are areas in which reforms may be needed, especially in the areas of how funds and services are delivered, but they are both fairly efficient programs, despite the calls for their destruction coming from the right. The proposals of Rep. Ryan are far from "courageous" as they have been hailed, but are just more of the same -- balance the budget on the backs of the poor and the aged. Getting rid of Medicare and Medicaid will be a net loss for the public as we will see much higher costs of care for the poor and the aged fall on the rest of us in terms of higher insurance rates and health care costs, as their care will go more to ER's and be unable to be collected and therefore passed on.
Last, we need to look at cutting military spending. This doesn't mean that we need to pack up our soldiers and ship them home from Afghanistan and Iraq tomorrow (although that wouldn't be the craziest thing I've ever heard, either) and it doesn't mean that our soliders should go without necessaries like body armor or weapons (although we sent them to Iraq without them, but again I digress). However, the unnecessary spending in our military budget can easily be eliminated. Well, that is, except that it benefits the district of every Congressman. We still seem to be running a Cold War military in a post 9/11 world and that doesn't seem to me to make a lot of sense. We can't balance the budget without cutting waste in our military and that may mean we also need a shift in the way our military is used around the world.
None of this has the remotest possibility of getting passed, by the way. As long as Washington is more concerned about re-election and raising money, the chances for real reform will never have a chance. However, I strongly believe that if both sides were to sit down and have a serious conversation with the goal being to come up with policies that actually benefited our nation rather than looking good in opinion polls, I think there is a lot upon which we could all agree.
The debate as it is reminds me of the DirecTV commercial with the rich Russian guy sitting on his gold throne surrounded by busty blond babes and tiny giraffes with electrodes attached to his arms and chest running to a weightlifter lifting what looks like about 400 pounds. We want the huge muscles, we just want someone else to do the work. Here's the truth: you can only lose weight and gain muscle by eating healthily and working out. Here's the other truth: we can only balance the budget and address our economic crisis by taking measures that actually hurt financially. There's no easy fix.
I welcome any other ideas that people have. And you can all now see why I will never be able to run for public office.
I will be probably be the only person in the entire country that says the following: I pay too little in taxes. Last year, my effective tax rate (the percentage of my gross income that I actually ended up paying to the federal government) was somewhere between 7 and 8 percent. Partly that was because I had an exceedingly difficult year with lots of medical bills and I got the advantage of the tax benefit for putting a new water heater in (not because I wanted the tax break, but because my water heater broke). However, it made me think about our tax system and what needs to happen if we really want to get serious about tackling the budget.
I am by no means rich by any way of judging such things. I took a huge hit in the wallet when I decided to leave my position as partner in a private law firm and become a prosecutor. I knew that at the time and I'm still glad that I made the decision because for the most part the trade off of having a schedule that let's me spend more time with my family and the ability to help actively take care of my daughter is worth much more than money. My wife and I do all right, but like most families, every month we scrape by. But after the economic implosion that we saw in 2008 and the lingering effects of that implosion on working people, we are lucky to have what we have and are doing a whole lot better than most.
So, why, you are probably asking yourselves, do I think I should pay more in taxes? Well, I'll give it a whirl.
There is a lot of talk in Washington about "shared sacrifice." With this concept I agree. There should truly be shared sacrifice with all levels of the economic strata paying their fair share. However, nobody in Washington actually means there should be actual shared sacrifice.
The Republicans say the entire issue is about government spending -- well, at least government spending on things they don't like (arts, the poor, trains, healthcare for women, NPR, etc.). Their proposals call for cutting Medicaid, Medicare, Social Security, funding for health care, social services, housing, education, etc. while at the same time giving additional tax cuts to the richest people in the country and further tax breaks to corporations. In fact there was even the proposal for a corporate tax holiday (I'm not sure what paying no taxes while getting a huge tax refund while posting billions of dollars in profit is, but apparently it's not a holiday).
The Democrats as usual a wishy washy about the cuts they propose (they want cuts to things like subsidies for heating oil because apparently it's ok if grandma is a little cold, she has blankets after all), but mostly want to raise taxes on the richest Americans by rolling back the Bush tax cuts for families making more than $250,000 a year, but still extending the tax cuts for the remaining Americans. Now, I'm all in favor of rolling back the Bush tax cuts, if for no other reason than that they have been an abject disaster for our economy, but the problem with the Dems approach is that it, too, fails to truly address the problems that we face with our deficits.
Both plans fall way short of actually putting a dent into our deficit. The cuts proposed by both parties target the absolute smallest part of the federal budget -- domestic discretionary spending. Plus both parties are being cowards when it comes to tax policy -- the Republicans not wanting to tax anybody and the Dems only wanting to tax those that they don't think will vote for them.
I heard David Stockman speaking this weekend on NPR (yes, that bastion of socialist propaganda). I hate to say that Stockman, the architect of Reaganomics in the 1980s, made more sense than anybody who I have heard speak on these subjects in a long time, but he did. He agreed that the Bush tax cuts had to be rolled back, but that they had to be rolled back for everyone. He also said that we couldn't get by just targeting this very small portion of the federal budget, but that we had to look at things like the defense budget and entitlement programs, which are the largest portion of the federal budget if we were going to really get serious about reducing the deficit.
Here are some things that I propose:
First, we have to raise taxes. I have never seen a financial crisis like the one we are currently facing addressed by a proposal of a tax cut. It won't work. It never has worked and it never will work. Taxes have to be raised probably across the board, at least to the point where they were under President Clinton. It's going to hurt. It should hurt. But shared sacrifice involves actual sacrifice, not just screwing everyone else. We should also look at going back to some kind of marginal tax bracket. Maybe not the 91% rate that we had under Eisenhower (although people were doing a lot better back then across the board), but as we continue to see what are obscene salaries going to the wealthiest Americans and the divide between rich and poor becomes cavernous, a marginal rate makes more and more sense.
Second, we need to eliminate many tax credits and simplify our tax code. In 1986, the Reagan administration passed a huge tax cut with bipartisan support, but did so by eliminating most of the corporate tax shelters and loopholes that allowed the richest among us to avoid paying their fair share of taxes. Since then, taxes have remained low, but tax credits and loopholes have found their way back into the system. First, eliminate these insane laws that allow corporations to avoid paying taxes by having off shore addresses and giving them breaks for shipping jobs overseas. But, in addition to this, we have to look at giving up some of our sacred tax credit cows. The one that I think makes the most sense (and I argued adamantly against this for years) is the tax credit for mortgage interest. The reason that I have supported this tax credit is that it made it more affordable for more people to own homes and allowed the middle class to grow and for our economy and society to become more stable. However, with the rising foreclosure rate and the fact that the middle class has been essentially wiped out, the argument for keeping this tax credit is less convincing than it used to be, and I think it is time to toss this one away. There are many others that could be looked at, but this is after all my lunch hour and it is limited.
Third, we need to reform, but strengthen entitlements. People in Washington are freaking out about Social Security, Medicare and Medicaid. We don't need panic. Entitlements don't need major surgery, they need a fitness plan. With Social Security, we may need to look at raising the retirement age. But, before we do, we need to address some other things about Social Security that just don't seem to make sense. First, we need to at least raise, if not eliminate, the cap on salaries subject to Social Security. Right now, only the first $107,000 of an individual's salary is subject to Social Security withholding. Raising this substantially, or eliminating it entirely would create a huge influx of funds into the Social Security Trust Fund. We also need to look at means testing for Social Security recipients. Social Security was intended as a program to prevent older Americans from becoming destitute and wards of the state in their final years. It has worked tremendously in that regard. However, I don't think that Jamie Dimon really needs to be receiving Social Security benefits when he turns 65. Some sort of means testing makes sense. Last with SS, we need to stop raiding the Social Security Trust Fund to pay for other shit not related to Social Security. If ever a trust needed to be a spendthrift trust it is one run by the government. Social Security would be fine, if Washington politicians were not allowed to spend its principal to pay for things not related to Social Security. As for Medicare and Medicaid, we pretty much need to leave them alone. There are areas in which reforms may be needed, especially in the areas of how funds and services are delivered, but they are both fairly efficient programs, despite the calls for their destruction coming from the right. The proposals of Rep. Ryan are far from "courageous" as they have been hailed, but are just more of the same -- balance the budget on the backs of the poor and the aged. Getting rid of Medicare and Medicaid will be a net loss for the public as we will see much higher costs of care for the poor and the aged fall on the rest of us in terms of higher insurance rates and health care costs, as their care will go more to ER's and be unable to be collected and therefore passed on.
Last, we need to look at cutting military spending. This doesn't mean that we need to pack up our soldiers and ship them home from Afghanistan and Iraq tomorrow (although that wouldn't be the craziest thing I've ever heard, either) and it doesn't mean that our soliders should go without necessaries like body armor or weapons (although we sent them to Iraq without them, but again I digress). However, the unnecessary spending in our military budget can easily be eliminated. Well, that is, except that it benefits the district of every Congressman. We still seem to be running a Cold War military in a post 9/11 world and that doesn't seem to me to make a lot of sense. We can't balance the budget without cutting waste in our military and that may mean we also need a shift in the way our military is used around the world.
None of this has the remotest possibility of getting passed, by the way. As long as Washington is more concerned about re-election and raising money, the chances for real reform will never have a chance. However, I strongly believe that if both sides were to sit down and have a serious conversation with the goal being to come up with policies that actually benefited our nation rather than looking good in opinion polls, I think there is a lot upon which we could all agree.
The debate as it is reminds me of the DirecTV commercial with the rich Russian guy sitting on his gold throne surrounded by busty blond babes and tiny giraffes with electrodes attached to his arms and chest running to a weightlifter lifting what looks like about 400 pounds. We want the huge muscles, we just want someone else to do the work. Here's the truth: you can only lose weight and gain muscle by eating healthily and working out. Here's the other truth: we can only balance the budget and address our economic crisis by taking measures that actually hurt financially. There's no easy fix.
I welcome any other ideas that people have. And you can all now see why I will never be able to run for public office.
Friday, April 15, 2011
Ruminations on the Nanny State
I have lately noticed a significant increase in the use of the term "nanny state" on the net, in reports on political issues, on comment pages and in conversation. Most notably in my own experience, the term has been employed against me for having the audacity to suggest that a proposed law allowing motorcyclists in North Carolina to ride their motorcycles sans helmet was both unnecessary and, well, dumb.
What I have always understood the term nanny state to mean is the overreaching of government into areas best left to personal choice. The best example of what I consider the proper use of the term would be the Chicago city council's decision to outlaw the serving of fois gras in restaurants within the city's borders. Why a governmental agency would even give an issue like that time on their agenda bewilders me and I think whether or not you believe that fois gras is cruelty on a plate or not, I would hope that we could agree that this is a perverse overstepping of both governmental action and common sense.
What bothers me is that lately it seems that the term is being used to refer to anything that government does to protect the safety and welfare of its citizens. Inherent in this argument is the Tea Party mantra that any governmental action somehow impedes our individual liberty. This is interesting seeing that most of the Tea Party folks that I saw attending those town hall meetings got their income from Social Security and their hoverround from Medicare, but I digress.
The fact is that in order to live in a civilized and orderly society, we need a government that sets forth laws and rules that regulate our behavior. Do these in some way inevitably impinge on our liberties? I guess they do. But to be a member of society, sometimes our individual liberty must give in a little to the common good. Most of these "infringements" we don't really think about. We have speed limits on our highways to ensure that the highways are safe for those who travel them; we have laws that make it illegal to take someone else's property and punish those who do; we have zoning ordinances to make sure that you don't put an industrial waste dump next to my house. Most people have no problem with these, although trust me there are plenty of people who do.
So, where do you draw the line between a government that is protecting the general welfare vs. one that is trying to regulate every infinitesimal intricacy of our every-day life? If I knew the answer to that, I would be running the country rather than writing a blog on my lunch hour. But, I would posit that the line is not where those throwing out the term "nanny state" are saying it is.
Let's take the example of the motorcycle helmet law. North Carolina like most sensible and civilized states (South Carolina, I'm looking at you) require motorcyclists to wear helmets when riding on public roads and highways. The reasons for this are many. It makes our highways safer, it reduces the number of serious head injuries and deaths due to motorcycle wrecks, it keeps all of our insurance rates low by making it cheaper for insurance companies to insure both motorcyclists and regular automobiles, etc. But, recently a bill was introduced into the NC House which would do away with this requirement. Many reasons were given, most involving claims of the current law impinging on the individual rights of motorcyclists (it's not, by the way, but that is a discussion for another time) and many of those calling for a repeal of the requirement described the current law as just another example of the nanny state. After all, an adult riding a motorcycle is only endangering themselves if they ride without a helmet, so why should the State tell them whether or not they have to? It should be an individual's choice.
I wonder if another government regulation were thrown out there, if the same people claiming nanny state would still see it as an infringement of an individuals choice. Let's look at regulation of illegal drugs. Isn't it just as much of an individual choice whether or not to snort cocaine or inject heroin? An argument can be made that if an individual wishes to use hardcore drugs that the only person that they are hurting is themselves and that the government shouldn't stand in their way. After all, it's their life and if they want to spend it using drugs then who is the government to tell them that they can't? Most of the problems related to drugs such as the violence that surrounds the manufacture and trade in narcotics and the crime that surrounds those who steal and rob to get money to buy drugs would be eliminated if we simply legalized it all, wouldn't it? We certainly would save money emptying our prisons of drug dealers and users who are currently clogging the system, wouldn't we?
Now, I know that there are some hardcore libertarians out there who would agree with the line of argument that I just set forth. That's why I love libertarians because they are absolutely consistent both in their logic and their beliefs, something I certainly can't say for myself. But outside the absolutist social Darwinists among us, I think most of us realize that the harm that comes from the use of narcotics affects society far beyond the affect it has on the individual user. Most of us believe that the U.S.'s regulation of and criminalization of narcotics is in the best interest of our society and serves the greater good. Any infringement on our liberty and individual choice is far outweighed by the benefit that these policies have on our society as a whole.
So, for those who like to throw around the term nanny state and bitch and moan about every last thing our government does, I say "get over it." But, I still think Chicagoans should be able to get some fois gras whenever the hell they want it.
What I have always understood the term nanny state to mean is the overreaching of government into areas best left to personal choice. The best example of what I consider the proper use of the term would be the Chicago city council's decision to outlaw the serving of fois gras in restaurants within the city's borders. Why a governmental agency would even give an issue like that time on their agenda bewilders me and I think whether or not you believe that fois gras is cruelty on a plate or not, I would hope that we could agree that this is a perverse overstepping of both governmental action and common sense.
What bothers me is that lately it seems that the term is being used to refer to anything that government does to protect the safety and welfare of its citizens. Inherent in this argument is the Tea Party mantra that any governmental action somehow impedes our individual liberty. This is interesting seeing that most of the Tea Party folks that I saw attending those town hall meetings got their income from Social Security and their hoverround from Medicare, but I digress.
The fact is that in order to live in a civilized and orderly society, we need a government that sets forth laws and rules that regulate our behavior. Do these in some way inevitably impinge on our liberties? I guess they do. But to be a member of society, sometimes our individual liberty must give in a little to the common good. Most of these "infringements" we don't really think about. We have speed limits on our highways to ensure that the highways are safe for those who travel them; we have laws that make it illegal to take someone else's property and punish those who do; we have zoning ordinances to make sure that you don't put an industrial waste dump next to my house. Most people have no problem with these, although trust me there are plenty of people who do.
So, where do you draw the line between a government that is protecting the general welfare vs. one that is trying to regulate every infinitesimal intricacy of our every-day life? If I knew the answer to that, I would be running the country rather than writing a blog on my lunch hour. But, I would posit that the line is not where those throwing out the term "nanny state" are saying it is.
Let's take the example of the motorcycle helmet law. North Carolina like most sensible and civilized states (South Carolina, I'm looking at you) require motorcyclists to wear helmets when riding on public roads and highways. The reasons for this are many. It makes our highways safer, it reduces the number of serious head injuries and deaths due to motorcycle wrecks, it keeps all of our insurance rates low by making it cheaper for insurance companies to insure both motorcyclists and regular automobiles, etc. But, recently a bill was introduced into the NC House which would do away with this requirement. Many reasons were given, most involving claims of the current law impinging on the individual rights of motorcyclists (it's not, by the way, but that is a discussion for another time) and many of those calling for a repeal of the requirement described the current law as just another example of the nanny state. After all, an adult riding a motorcycle is only endangering themselves if they ride without a helmet, so why should the State tell them whether or not they have to? It should be an individual's choice.
I wonder if another government regulation were thrown out there, if the same people claiming nanny state would still see it as an infringement of an individuals choice. Let's look at regulation of illegal drugs. Isn't it just as much of an individual choice whether or not to snort cocaine or inject heroin? An argument can be made that if an individual wishes to use hardcore drugs that the only person that they are hurting is themselves and that the government shouldn't stand in their way. After all, it's their life and if they want to spend it using drugs then who is the government to tell them that they can't? Most of the problems related to drugs such as the violence that surrounds the manufacture and trade in narcotics and the crime that surrounds those who steal and rob to get money to buy drugs would be eliminated if we simply legalized it all, wouldn't it? We certainly would save money emptying our prisons of drug dealers and users who are currently clogging the system, wouldn't we?
Now, I know that there are some hardcore libertarians out there who would agree with the line of argument that I just set forth. That's why I love libertarians because they are absolutely consistent both in their logic and their beliefs, something I certainly can't say for myself. But outside the absolutist social Darwinists among us, I think most of us realize that the harm that comes from the use of narcotics affects society far beyond the affect it has on the individual user. Most of us believe that the U.S.'s regulation of and criminalization of narcotics is in the best interest of our society and serves the greater good. Any infringement on our liberty and individual choice is far outweighed by the benefit that these policies have on our society as a whole.
So, for those who like to throw around the term nanny state and bitch and moan about every last thing our government does, I say "get over it." But, I still think Chicagoans should be able to get some fois gras whenever the hell they want it.
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