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Economic Revival: Fact or Fiction?


This article appeared in yesterday’s edition of Forbes. The authors, economists employed by First Trust Advisors, postulate that the economy is in recovery is underway. The only thing holding us back is unwarranted pessimism.

Phil Gramm’s thoughts on the economy have come back, it seems. You remember Gramm – during the 2008 election, he spouted off that the only thing wrong with the economy was the public’s perception. Shortly thereafter, Gramm joined the long unemployment line that was merely a figment of his imagination.

The indicators they point to, such as the increasing trade imbalance and devalued housing stock, are rife with the reasons the economy is in such a mess. Once again, we have economists pointing to debt-fueled consumption as the way to end the current economic slump. Nobody in their right mind is going to increase their debt load in this climate and for good reason. Basic common sense; the type of common sense missing from many economists and politicians psyches, tells us that we cannot borrow our way to prosperity any longer. Yet these types of articles continue to be published and their views continue to corrupt our discourse.

What is needed to get the economy rolling again is demand. The right type of demand, fueled by sustainable methods of production and innovation, not by gimmicks derived from debt restructuring, is the surest way to sustainable growth. So how do we get there – and remove the parasites who feed on debt?

We start by demanding government remove the binders on innovation and consumption. By continually bailing out mismanaged companies and decrepit industries, governments are preventing new industries and companies from establishing roots and flourishing. Regardless of the political unsavoriness that allowing large companies to fail and industries to wither presents, the process of “creative destruction” is essential to a growing and vibrant economy. The same way you prune dead shoots from a rose bush to allow larger blooms to grow is the same way the government should approach handling the economy.

Pursuing such a policy will cause employment displacement – but government officials can hardly claim the policy of propping up failed businesses hasn’t resulted in the same (nearly 1M newly unemployed this month can attest to that). This is where the government can assert a positive force, by providing short-term financial assistance to those displaced by the new economy. Likewise, government can fuel new growth by ensuring those displaced receive the training they need to compete.

Unfortunately, we’ve already wasted more than $1T in bailing out failed industries, leaving a huge debt sinkhole without anything to show for it. Instead of prudent financial management, it looks like our leaders – enamored with, and products of, the culture of debt – consigned the nation to a long period of economic malaise. While the second half of the program outlined above was made infeasible by the debt policies pursued by the federal government, the first half can be attained. The economic pain will not be any worse than what the nation currently feels. But given an intransigent White House and bickering Congress, it doesn’t seem likely they will change course.

Posted by  |  August 19, 2010 | Categories: Economics | Tags: , , , , | Leave a comment

The Fed Announces It’s Time to Panic


It isn’t often that the political right and left in this country agree on anything, but if two articles I read this morning are any indication, we may have finally found common ground on the issue of the stagnated economy. More significantly, articles in Forbes and The Huffington Post are both sounding the same alarm bells about the Fed’s actions yesterday. If there are two publications more diametrically opposed in terms of editorial slant, I can’t think of them. After all, on most issues the Huffington Post is slightly to the left of Fidel Castro and Forbes founder (and namesake) is the epitome of neo-conservatism.

What the Fed did yesterday is press the panic button. I’m sure the President and congressional Democrats can’t be too happy about that – after all, various administration members have assiduously assured us that the economy is all fine and those of us complaining are simply making mountains out of molehills. The Fed (or more accurately, the Federal Reserve Board of Governors) said, “Um, maybe not. The economy is slowing and we’re headed for a second recession.” As their statement said,

“Information received since the Federal Open Market Committee met in June indicates that the pace of recovery in output and employment has slowed in recent months…investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls…the pace of economic recovery is likely to be more modest in the near term than had been anticipated.”

In case your wondering, when the Fed uses terms like “slower than anticipated,” that is simply a banker’s way of saying that things are really, really bad. How bad? In the January 2010 report, the “anticipated growth rate for GDP” was 2.8% – 3.2%. If you prefer, the Fed was anticipating anemic growth already – if they’re now saying the actual rate of growth is even less than that, then it’s safe to say we’re approaching negative growth. If the economy was shedding jobs during a period of supposed growth (albeit anemic growth), what happens when growth turns negative?

Thus, the Fed is panicking. That is, nine of the ten members of the Board of Governors are panicking. (I’ll get back to the tenth in a moment). It’s perfectly understandable, since the only thing that can make a banker afraid more than a lack of government bailouts is the thought of angry mobs  demanding their deposits. The actions the Fed took yesterday – converting the sizable investment in mortgage bonds they currently hold into treasuries and keeping the funds rate near 0% – indicate an organization that is under the misled belief that there isn’t enough money in the economy today.

The nine members who voted for these policies ignored a huge source of money that is available, but lacks the impetus to spend. As has been widely reported, corporations are sitting on approximately $1.8 trillion in cash assets. That equals about 12% of estimated GDP for this year – or nearly double the economic “stimulus” spent by the federal government since 2008. Those huge cash reserves, if invested back in the economy, would represent the most effective stimulus possible, since those funds would be directly spent on investment, including capital expenditures and employment. But by depressing interest rates, the Fed is holding down any incentive for businesses to invest.

This point was brought up by Thomas Hoenig, the one member of the Fed Board who didn’t vote to hit the panic button. (Told you I’d get back to him). In a nutshell, Hoenig is worried that by depressing interest rates while pumping more money into the economy, all the Fed is accomplishing is creating another bubble. Nobody is prescient enough to tell you what industry that bubble will encompass (my guess is health care), but it’s certain to come. As Hoenig pointed out, in 2003 the Fed took similar actions – and gave us the housing bubble, which led to the current recession. In 1997, the Fed took similar actions – and gave us the tech bubble.

It can be argued, and perhaps rightly, that the Fed’s overzealousness in 1997 and 2003 was warranted, since monetary policy was the best option for jump-starting stagnating economies. There is a major difference this time around, and that difference is the vast cash reserves companies have built up during this recession. The Fed’s current monetary policy is a huge disincentive for those companies to invest in what are typically long-term assets with high immediate and near-term costs; namely people and equipment. How? First, by limiting inflationary pressures, there is no reason to invest cash into something that will lose value in the near-term. Once inflation does kick in (and it will; the amount of money currently floating around plus artificially depressed interest rates guarantees it), every dollar invested now loses value not only through depreciation but also in the natural devaluation that comes with inflation. (If inflation were held at the Fed’s target rate of 5%, a dollar today would only be worth 95 cents next year). It makes much more sense, from a business perspective, to invest that money into something that almost certainly will appreciate in value.  It is the mindset that explains the stock market’s insane gains this year.

So what should the Fed do? I argue the Fed should look for ways to take money out of the economy – raising interest rates and selling those securities it purchased over the past 2 1/2 years. By thus shrinking the money supply, those business currently hoarding cash are forced to begin spending again. Why? Cash flow is the lifeblood of business. Right now, business can ignore normal consumer markets because they’re making huge profits by investing their capital in the stock market, in many cases buying back their own stock and driving the prices up, ensuring positive cash flow. Once the excess cash is removed from the economy, the financial markets will react as they always do to inflation: prices will drop and indices will decline, drying up the current avenue for establishing business income. Those same inflationary pressures will force businesses to reconsider investing in long-term capital – investing their cash before its purchasing power declines.

Unfortunately, the Ben Bernanke’s and other Greenspan disciples (including the Treasury secretary) are not of a mind to engage in this type of monetary policy, fearing that jump-starting the economy by raising inflation will result in the type of over-inflation from the 1970’s and wind up uncontrollable. Oddly, many left thinking economists (notably Paul Krugman) are like-minded, although they prefer government spending over monetary policy to pump more cash into the economy. Either way, I can’t help but wonder if they’re seeing the same economic landscape those of us in the real world see. Oh, and if they realize that the policies of “priming the pump” we’ve pursued for the past 2 years haven’t worked and may very well have pushed the real economy off the cliff.

My biggest fear is they don’t see it – and they’ve taken the very social order of the first world with them in their mad dash chasing after rainbows.

Posted by  |  August 11, 2010 | Categories: Economics, Politics | Tags: , , , , , , , | 1 Comment

Joe Fed Makes Twice What You Do (and for Doing 1/2 the Work)


More depressing news from Washington. According to this article in USA today, if you work for the federal government  you’ll earn; er, make about twice as much as if you worked in the real world.

I did some back of the napkin calculations to see how much money that wastes in a year, even assuming we need all of those federal workers. (I don’t think we do, but until we get the private sector hiring again, leave ’em where they are). The number is…staggering. This is based on the average fed worker receiving $121K in annual compensation, the number specified in the article.

(Number of federal employees x $121,000) / 2=estimated overpayments

(2,150,000 x $121,000) / 2 = $130,075,000,000.

That is 130 billion, 75 million dollars.

Or, as my dear departed Granddad would say, “that’s a shitload of samoleans!” (I never really found out what a “samolean” was, but I always assumed it was something mean that traveled in big packs – like government employees).

I don’t know about you, but if the Keynesians want to spend some government dough around, I’d suggest they have a way to pay for it without adding to the debt. Simply tell all those federal employees they’re getting a 50% reduction in pay. It would also accomplish something else: all those beauracrats would actually begin to understand what it’s like to take drastic pay-cuts, only to see your job disappear 6 months later.

We can only hope…

Posted by  |  August 10, 2010 | Categories: Economics, Politics, Uncategorized | Tags: , , , , , | Leave a comment

Time for a New Consensus


One thing is becoming painfully obvious: the way we, as Americans, view economic opportunity is out of step with the way the world operates today. It is time that we recognize this and address it in a positive manner, without the political fire-bombing that is hurled daily on both the left and the right.

The left is stuck with an early 20th century Keyensian view of economics. I’d argue that particular view didn’t really work then and won’t work today. Massive infusions of government capital during the 1930’s into public works projects did build some marvelous edifices, such as the Hoover Dam, but did not absolutely nothing to end the Great Depression. America didn’t return to full employment until the advent of World War 2 – the result of increased war production and more than 10 million men entering military service. Once the war ended, the economy again returned to near-Depression era levels of unemployment. What finally proved the cure for the economic ills of the 1st half of the 20th century was that in the post-war period, only the US remained capable of providing the goods and services needed by the world. It was an export economy, fueled by international demand, which put America back to work.

The right seems permanently wed to supply-side economics. Strict adherence to that model might have worked, but we’ll never know. While government receipts during the supply-side era (1981-2008) outpaced inflation by (See fig. 1), government spending at all levels increased at an even more dramatic pace, leaving us with unsustainable levels of debt and continuing government deficits – and a seemingly insatiable public demand for services that we cannot afford.

Fig. 1

The current model being followed is a strange amalgam of the two diametrically opposed economic philosophies, with government interventions and expanded spending coupled with “targeted” tax breaks. In one sense, this new model has worked: businesses are sitting on a virtual mountain of cash. But in a much larger sense, these haven’t worked to stoke the economy – and for one simple reason, the demand needed by businesses to invest that capital doesn’t exist now. Employment data continues to remain bleak, representative of the fact that businesses are not investing in human capital. Part of the reason is undoubtedly tied to regulatory uncertainty, since anyone running a business needs to properly plan and account for the funds allocated for human resources. But that uncertainty alone cannot account for the downward pressure July’s economic data displayed on employment.

What is needed is recognition by both those on the right and the left that a new demand model is required for our current age. Modern technologies have made many labor-intensive occupations of the late 20th century redundant. Cloud computing and SaaS technology reduce the need for office and technical staffing, closing off two of the high-growth industries of the past 30 years. Manufacturing tasks that once required dozens of people can now be fully automated, with only one operator required. (Just last night I watched a documentary on Zippo lighters – the entire assembly line only needs 5 people to run it; a perfect example). Even many low-wage jobs have been replaced – the other day I went food shopping. No cashiers were available; the entire checkout line was self-service with two people running 20 checkout lanes.

In other words, there are two possibilities now facing the country:

  1. Current unemployment levels are now the “new normal” and a return to sub-5% unemployment is unlikely. In this event, the current social services are inadequate and need serious revamping. Unemployment insurance as currently exists needs to be discarded, replaced by a system that is more proactive in returning the unemployable to the workforce while ensuring that people are not discarded like yesterdays news. Such a program needs to be structured so that chronic unemployment and other abuses are not permitted. In short, in such a world, unemployment services should not be a state duty, they should very much be a federal-corporate symbiosis. It is impossible – and against a state’s interests – to train somebody for employment opportunities in another state, but it is in a company’s best interest to do so.
  2. Current unemployment levels are an aberration; a temporary result of career displacement due to a technology upheaval. Such upheavals have occurred before and the nation weathered those storms, most recently in the late-1970’s as the nation shifted from a manufacturing base to a services based economy. In this case, the government needn’t do much of anything, except make career retraining available and mandatory, in order to continue receiving unemployment insurance payments. Once, that is, the new employment needs are identified.

I’m not going to pretend I’m smart enough to know which of the two scenarios is correct. What I do know is that until we begin to honestly discuss them, no action can be planned or undertaken. But as I mentioned at the top of this post, neither side seems ready to abandon decades-old dogma. I doubt either will over the next 90 days, as we begin a new national election cycle and both sides seem to only care about scoring political points by feeding raw meat to their adherents.

It’s up to the American people to put aside our natural inclination to fear in uncertain times and force our political leaders to engage in an honest discussion of the situation. And if they won’t?

Then it’s up to us to replace them this November with people who will.

Posted by  |  August 8, 2010 | Categories: Economics | Tags: , , , , , , | Leave a comment

Missouri Showed Us


Just a quick follow-up to this post from the other day: Missouri voters have, by about a 75% plurality, approved Proposition C. I offer my sincere thanks to the voters of Missouri for demonstrating that American values still beat strong in the breast of this Nation.

This marks the first time that the general public has, by the electoral process, rejected the federal mandate to purchase health insurance. Although I doubt anything will be done about before the legal challenges have been resolved by the Supreme Court, I sincerely hope the Obama administration will reconsider and revoke that onerous provision of their health care reform effort. The public has spoken and soundly repudiated the idea that the government can require private citizens to purchase a product offered by a private company. It’s time the President and Congress listened to their employers.

Posted by  |  August 4, 2010 | Categories: Economics, Politics | Tags: , , , | Leave a comment

Show Us, Missouri


Tomorrow is primary day in Missouri. Though I live in New Jersey, there is one item on the statewide ballot there that has captured my attention. If you live in Missouri, I certainly hope you’ve studied Proposition C and plan to vote for it. Missourians, this is your opportunity to show the rest of the nation that government intrusion on the personal liberties of Americans will not be tolerated.

For the uninitiated: Proposition C is a ballot measure that would, by statute, exempt all Missourians from the oppressive federal mandate to purchase heath insurance or face stiff penalties. By its passage, Missouri would send a message to the folks in Washington that Americans do not want the government subverting personal liberty in order to cover for a mess the federal government created. Although other states have enacted similar measures, those have been passed by legislative action – not by direct vote. With this ballot initiative, the good people of Missouri have the chance to show that it isn’t only legislators who are opposed to the “progressive” ideal that the Nanny State knows what is best for you and your family. It is ordinary Americans who are opposed to an usurpation of the long-established tradition that “those rights not especially enumerated in the Constitution are considered as belonging to a free people…The powers delegated by the proposed Constitution to the federal government are few and defined.” James Madison wrote that phrase in the Federalist Papers, and he meant it to illustrate to a skeptical populace that the federal government would not and could not take away a fundamental freedom simply because it had not been mentioned in the Constitution.

Certainly, decisions about which types of products to purchase are a fundamental right. Should the federal government assume he power to direct the citizenry to purchase a particular product (in this case, medical insurance) then our nation has ceded the a fundamental right. More, the nation will have undermined the very Constitution and  the principle on which the nation was founded. If you do not have a fundamental right to decide when, whether and how to purchase any product, then are you truly free to pursue life liberty and happiness?

The Obama administration realizes the fallacy of their central argument during the run-up to passage of Health Care Reform; that essentially, the Commerce Clause grants this power to the federal government. This is why, in their preparations for the defense of the indefensible in court, they have resorted to declaring the mandate is essentially a tax – a power that is reserved by the Constitution for the Congress. If that is the case, then this is the largest tax hike in history and also paves the way for a federal take-over of the entire health care industry. In short, the Obama administration is trying to lay the groundwork that by declaring medical insurance is a de facto tax, then those who provide that product are, in essence, appendages to the federal government. To anyone who has any concern about personal freedom, this is an affront to the very ideals of national identity.

Already, the “progressive” forces are hard at work to discredit Proposition C’s passage. They are making numerous and rather spurious claims that its passage are only due to an intemperate electorate that will be heavily Republican on primary day. They are claiming that it will not hold any import, since a state law cannot supersede a federal mandate (this, by the way is currently winding its way through the court system and is certain to end in a decision by the Supreme Court).

What “progressives” are afraid of is a state law, passed not by legislative fiat but by popular vote, that directly tells an over-reaching federal government it has overstepped its bounds. The reason is, as always, the ideal of progressive theology is that individuals are not intelligent enough to make sound decisions and only an apparatchik of federal authority should have such authority. It was this very notion, in the past called “monarchism,” that both angered and frightened those that created our nation from the dust of their boots. It is the same principle applied by socialists and communists in defining the role government.

So Missouri: pass Propostition C. Do it in overwhelming numbers. And show the rest of us that our nation still exists for the purpose of guaranteeing the ideals of liberty and freedom.

You can read the full Proposition here.

Posted by  |  August 2, 2010 | Categories: Economics, Politics | Tags: , , , | 3 Comments

Obama’s “View”


In case you missed it, Barack Obama finished the job started by Bill Clinton and completely sunk any credibility in the Presidency this morning. Yes, he made a guest appearance on ABC’s The View.

(For those of you who have actual lives, The View is a daytime talker hosted by 5 ancient would-be stars, who spend copious amounts of time kvetching that the World Doesn’t Conform to their Liberal View. Riveting television it isn’t, unless you’re one of those unhappy souls who likes listening to your mother-in-law for hours on end.)

Since I didn’t really have anything better to do, I sat and watched what passed for an interview. I mean, I could have spent the hour pulling my toenails out with tweezers and had more fun, but I thought the President might actually say something insightful. Or witty. Heck, I’d even have settled for pithy. You know how every once-in-a-while, a pitcher will toss up an “eephus” pitch and the batter will swing and miss the 50mph offering? That’s what I felt like I was watching. Question after question, the Venerable Ones would toss the One a softball. And question after question, the One would swing and miss. It was worse than watching the really fat, drunk guy at the company softball game (you know the one – the guy who falls down after every swing).

I realize the MSM will be talking about how Obama used the forum as a way to talk about how well job creation is going, how his handiwork saved the country from financial ruin and about how he loves his family. But you know what I heard, over and over again? A President who is so full of himself, he can’t understand why the United States of America isn’t simply jumping on his gravy-train to freedom. He never missed an opportunity to complain about how he’s being mistreated by the opposition; about how the media is constantly blowing things out of proportion and how stupid all of us out here in the heartland must be. He made one paean to the fact that the economy sucks – I forget the exact wording, but it was something like “I realize that Americans are hurting because I read their letters every night” – but quickly said that the economy would be so much worse if not his profligate spending. He mentioned that there are real differences on basic issues such as the role of government, but tried to sweep them under the rug as being personal attacks on his person.

Sorry, Mr. President. Before this appearance, I questioned your policies, but never questioned your intellect. But now I’m left wondering if the Nation didn’t somehow elect the most narrow-minded idiot we’ve had in the White House since Benjamin Harrison.

Posted by  |  July 29, 2010 | Categories: Politics | Leave a comment

The fear economy?


I love reading all of these articles about how the reason the economy isn’t picking up because the American consumer is “afraid.” Like this one from CNN.

What is it that all of these pundits fail to understand? The reason Americans aren’t spending, the reason for the fear about the economy is…well, because in real world terms, the economy sucks. Look, the President can talk all he wants about how the economy could be worse. He can pat himself on the back all for a stimulus package that only stimulated the national debt, but those of us who don’t live in big mansions in the District of Columbia understand one very vital thing: there aren’t any jobs out there. And the few that do exist have more intense competition than ever before. As noted in this article from Daily Finance, the US Department of Labor’s unemployment statistics amount to books-cooking. While the government touts a 9.5% unemployment number (bad enough), the actual unemployment rate looks to be closer to 22%. If you or I tried to pass off that type of accounting, we’d be in prison.

To put it simply: until people start getting hired again, nobody is going to be spending anything beyond what is absolutely necessary. Unfortunately, the one thing the current administration has displayed is an absolute disregard for getting folks hired. Why else would they be pushing the largest tax hike in history on the nation? Why would they talk about how wonderful it was to save GM – when GM just offshored another 32,000 jobs? Why would they talk about how they love the technology sector, while Verizon is in the middle of laying off over 24,000? That’s 56,000 jobs gone in 10 days from just 2 corporations, but they’ll never show up in the official DoL statistics.

Until this administration stops putting nonsense like “climate change” on the front burner and starts getting serious about job creation, the economy will continue to free fall. The object lesson in job creation can be found pretty easily, too – if Obama just opens up a history book. In 1962, President Kennedy spurred job creation by reducing income and corporate taxes and reducing regulation. In 1981, President Reagan did the same. And in 1995, President Clinton did the same, again. President Obama should also note that two of those presidents were Democrats – funny how job creation understands only one ideology. It’s not the one the current President espouses, though – so I guess we’re stuck int he “Fear Economy” until 2012.

Posted by  |  July 27, 2010 | Categories: Economics | Tags: , , , | Leave a comment

One Last Word about Race


Last week, the world was abuzz with Andrew Breitbart’s posting of a video that depicted Shirley Sherrod in a racist light. As a result, the Obama administration (showing their usual fortitude when the going gets tough) called Ms. Sherrod while she was driving and demanded her immediate resignation. It was only after the full video came to light that the administration realized that in attempting to quell a political firestorm before it erupted, they triggered another. By Friday, Secretary of Agriculture Tom Vilsack was forced to issue a public apology and offer Ms. Sherrod a new job.

Most of the coverage of this event seems to gravitate towards one of two veins:

  1. The media messed things up badly by not vetting the story before airing/printing it. True enough, but then again, we haven’t had professional journalists in charge of newsrooms for a generation – I’m at a loss as to why anyone is surprised when gibberish comes out of them.
  2. The Obama administration over-reacted to a perceived political threat. Well… yes, they did. But this is hardly anything new for this President or his closest advisors. Don’t forget, Obama is the same guy who publicly dissed his own pastor rather than stomach the ensuing political fight while he was Candidate Obama.

But what is most disturbing to me is that once again, our Nation has let a potentially culture-altering moment slip into the abyss of silence. Because really, if you stop to think about it, this moment was created by our Nation’s inability to come to grips with our inherent cultural differences.

A quick history lesson: immediately prior to the scalping of Ms. Sherrod’s reputation by Mr. Breitbart, the NAACP issued a statement that, in effect, called the Tea Party a racist movement. What predicated that statement is a very real perception in communities of color that the very ideas expressed by the Tea Party movement are, in themselves, racist. Mr. Breitbart then either received or created an edited video seeming to depict a NAACP meeting espousing equally racist ideology, which he then posted to his blog. I have no way of knowing if Andrew Breitbart is racist. I have no way of knowing the same about the President of the NAACP, Ben Jealous, is a racist. I don’t know either man, and quite frankly, I could care less if either one is. This post isn’t directed to the true racists (be they white, black or whatever) – you know who you are, and you can stop reading here. The world has always had your kind and quite frankly, while we would be better off without you, at least you aren’t very ambiguous about your views.

But what the entire episode demonstrates is that our nation, conceived in the concept of equality for all, has a long way to go before we realize that ideal. And the reason we do is much more subtle than racism. It is called prejudice, and its ugly head will keep appearing in our national discourse until everyone does something about it.

Prejudice differs from racism in very profound ways. Odds are you harbor prejudicial tendencies – even if you aren’t aware of them. Prejudice simply means that your perception of something is biased by your subconscious thoughts, often irrationally. People generally harbor hundreds of prejudices, and not only in regards to race. You may prefer Chevrolets to Toyotas without knowing why. Perhaps your father and grandfather always drove Chevrolets and spoke rudely about Japanese automakers, which created a subconscious impression that Chevrolets are superior to Toyotas. Much the same away, impressions regarding race and racial stereotypes are given to us when we are young. In order to overcome them, we wind up spending a lifetime – and rarely succeed in entirely dispensing with our prejudices. Think about how you overcome your prejudices to any other thing, aside from race: you learn by association, constant and reinforced association. To go back to the car analogy, you probably start slowly. You go for a ride in a friends Toyota and discover the car isn’t that bad. Then you rent one for a business trip and discover that the car basically handles like any other car. Eventually, you buy one for yourself.

The speech given by Ms. Sherrod actually addressed that reality and her struggles to overcome her own prejudices. For those who still haven’t heard her biography, here is the Cliff’s Notes Version: her father, a civil rights activist, was murdered by the KKK when she was a girl. Nobody was ever brought to trial for the crime, which (unfortunately) was all too common for the time. Fast forward to 1990 and Ms. Sherrod is a paid advocate for poor farmers; she happens to get the case of a poor – but white – farmer. Succumbing to her own prejudices, she sends the farmer to a white lawyer for assistance. Only later does she realize that she had, because of prejudice, abandoned her duty to the farmer and make a conscious effort to never allow that to happen again.

In a not-so-violent way, I can relate to Ms. Sherrod’s story. I was raised in a relatively cloistered community, decidedly rural and definitely WASP-ish. I never met a person of a different ethnicity, much less race, before joining the Marine Corps. And I certainly had more than my share of racial missteps stemming from prejudices over the intervening 27 years. And like Ms. Sherrod, I make conscious efforts daily to not allow them to interfere with my daily life. Most of the time, I succeed. Occasionally, I do not. Those occasions where I fail, though, are moments I reflect on and identify the reasons for my failure. I then resolve to learn more about the cause of the particular prejudicial thought and reaction and address ways to overcome it. While I will never be able to say I have the life experience of somebody from a black community, I can learn to appreciate the culture. The same holds true with other communities my life has led me to interact with – Puerto Rican, Mexican, Chinese, and Philipino, Jewish and on the list goes. But you get the idea (I hope).

I truly believe that until we begin to associate with one another, not as hyphenated Americans but simply as Americans, until we learn to recognize that we all harbor prejudices and work to overcome them as individuals, we will never move past the issue of race in American life. The good news is that like many other people I’ve met, we can all overcome our personal prejudices without undue effort. It’s time to make that effort. It’s time to get out of our cloistered communities and begin that association – and to understand that until we begin to discuss those things that make us different we cannot discuss the things that bind us together.

Posted by  |  July 26, 2010 | Categories: Politics | Tags: , | 6 Comments

Extending Benefits


I’m certain many of you have been watching the unfolding – seemingly in slow-motion – debate on extending unemployment benefits. Then again, I’m also certain that quite a few of my fellow citizens haven’t given it more thought than which sunscreen to bring to the beach. After all, it is July. This is hardly the time of year when political juices get flowing for most of the electorate.

However, I have two strikes against me when thinking about this: for one, I am an admitted political junkie and two; I am one of those approximately 6,800,000 Americans who has been officially unemployed for longer than 6 months. (That’s a pretty dismal number, but it’s actually rosy when compared to the long-term underemployment number and the actual numbers of Americans who have been unemployed so long that the feds stopped counting them. But I digress.) So, I’ve been watching and listening with keen interest.

Being fiscally conservative (ok, ϋber-conservative) and also unable to secure new, permanent employment, I find myself torn between the two very real issues at play. Those two issues are, to put it simply, how do we reconcile a real need to prevent utter destitution for the millions like myself – and at the same time, do it in a way that doesn’t further bankrupt the country? It seems to most reasonable Americans that the proposal put forth by the Republican caucus – paying for the cost of extending unemployment benefits by using some of the remaining funds from last year’s gargantuan stimulus package – is a good compromise. Why the Democratic caucus is so opposed to the idea has been beyond me. After all, even that most liberal of economists, Paul Krugman has said repeatedly that unemployment benefits are “a highly effective form of stimulus.” Congress loves “earmarks,” or setting aside money for pet projects. In an election year when there are likely upwards of 20 million voters who face the prospect of losing everything on a daily basis, it seems logical that Congress would earmark $38 billion of pre-existing expenditures on a pretty popular program. It would be a win-win, something that almost never happens for a politician: they could claim both the labels of “caring liberal” and “fiscal conservative” with one vote. So why won’t they?

The answer (as with almost everything Congress does these days) lies in the details. The program is part of H.R. 4213, a 412 page megalith that deals with a whole of stuff not at all related to employment or economic stimulus. In fact, the section dealing with the benefit extensions is Title V, subtitle A of the bill. It incorporates all of 9 ½ pages of the bill.

I’m sure you’re asking yourself what could be in the other 402 pages of the bill. Well, here are a few highlights. Feel free to hit the link and read it for yourself:

*Provisions to build sewer systems

*Alternative fuels vehicle credits

*Energy efficient appliance tax credits

*New standards for windows and doors (You can’t make this up, folks)

*Railroad track maintenance credits

*Rum excise tax relief for Puerto Rico and the US Virgin Islands. Hey, even if we’re all broke, at least we should be able to swig cheap rum, get drunk and forget this mess!

The list goes on and on. There are over 500 individual line items in this bill. Not only have our congressmen been busy putting earmarks into this thing, it seems they’ve taken special care to pack it with more pork than a Jimmy Dean breakfast sausage. No wonder they couldn’t find the $38 billion! (By the way, by the Obama administrations own estimates, there should be nearly $340 billion left from last year’s budget buster.)

Oh, and one final note regarding the supposed disincentive of providing unemployment benefits: In ordinary times, I agree that extending unemployment benefits can be a disincentive to finding gainful employment. But these are not ordinary times; not when estimates range from five to eight people for every available job opening. And speaking from personal experience, I can assure you that getting 30% of my prior earnings in an unemployment check doesn’t exactly meet my monthly commitments. Here’s hoping Sen. Jon Kyl and Senatorial candidate Sharron Angle, who have publicly espoused this thought, take a good look around their respective states and come to their senses. They are not properly representing their constituents, their party or the nation as long as they hold that view.

Posted by  |  July 21, 2010 | Categories: Economics, Politics | Tags: , , , , , , | Leave a comment