Category: Social & Political Issues

Thomas Friedman hit the nail directly on the head yesterday in his regular New York Times column, when he wrote:

“…when taking America surging deeper into war in Afghanistan, President Obama has to be able to answer the most simple questions at a gut level: Do our interests merit such an escalation and do I have the allies to achieve victory? President Obama never had good answers for these questions, but he went ahead anyway. The ugly truth is that no one in the Obama White House wanted this Afghan surge. The only reason they proceeded was because no one knew how to get out of it — or had the courage to pull the plug. That is not a sufficient reason to take the country deeper into war in the most inhospitable terrain in the world.”

No one knew how to get out of it.  The unstated assumption that I think most of us would share is that no one knew how to leave Afghanistan without getting bludgeoned by the right wing media that now sets the terms of debate in the mainstream news media.  Right-wingers would shout out their typical litany of incendiary catch-phrases: Weak on defense!  Couldn’t do what was needed! Put America’s security at risk!  In fact I think the reason that President Obama escalated the Afghanistan War was so he wouldn’t take heat for drawing down Iraqi troops.  Escalate in Afghanistan while leaving Iraq was his plan even as a candidate.  And I believe his plan was a typical Clintonian triangulation to defend in advance against right wing criticism. (BTW, the firing of McChrystal probably won’t raise the ire of the wing-nuts because President Obama replaced him with their sweet little darling, General David Petraus.)

But I think it’s just a little too easy to attribute the Administration’s hesitation to pull its stakes from a sinkhole of an unwinnable war to fear that it would take a scorching from the right.  Remember, our president takes a scorching from the right whatever he does, because Rush, Sean, Glenn, Anne and the others are subjective partisans who just don’t like the man. 

Let’s go back to the war which served as dress pattern for our current Iraq-Afghan fiasco: Viet Nam.  I’m currently in the middle of reading John Prados’ masterful new history, Viet Nam: History of an Unwinnable War, 1945-1975.  Prados describes in accurate detail how Eisenhower, Kennedy and Johnson all had innumerable opportunities to pull out of Viet Nam.  Each time the rational evidence suggested that we had nothing to gain by remaining and that remaining would necessitate committing more money and more soldiers to Viet Nam.  And in each case, all three presidents forged ahead, sometimes after making noises about pulling out. 

During the 10-year period between 1954 and 1964 in which three successive U.S. presidents decided again and again to escalate our presence to Viet Nam, the right wing was at its low point in American politics.  The McCarthy era had scared a lot of average middle class folk, elected officials and even corporate executives.  The country was rapidly moving to the left on a wide range of social issues such as civil rights, women’s rights and nuclear disarmament.  Additionally, the media was much smaller and far from 24/7 since there was neither cable TV nor Internet nor cell phones.  And while there were many Republican newspapers, a lot of these were progressive Republicans, sometimes called Rockefeller Republicans.  Yes, the core of what would become the new Republican party of whites living in the sunbelt and the rural and suburban north was coalescing, but the various groups in the Republican party Ronald Regan built had not connected and they did not have any powerful news media on their side to shout out their views.

Here’s my point: In an environment ideal for pulling out without suffering any political consequences, Eisenhower did not, Kennedy did not, and Johnson did not.  More than 50,000 Americans died, we wasted a lot of money and lost the respect of the world. (The differences in Iraq and Afghanistan are that the war started sooner and that it has killed fewer of our side while wasting more money.)

Now some would call it a collective hubris, an inability of our country to admit we are ever wrong.  But in the case of Viet Nam, for the longest time, maybe 8 years, that admission could have come in the dark shadow of the public’s lack of awareness about the war.  In the case of our current wars, President Obama had a mandate to repudiate the policies of the Bush Administration and the opportunity to say, it was his war and it was a mistake, so we’re pulling out with all diligent speed.

The similarity I see is the great role that companies that receive military contracts play in the politics of the United States.  Although one was perhaps the most big-hearted and caring President we have ever had and the other the archetype of the uncaring and mean business operator, LBJ and Dick Cheney share one thing in common—both were beholden financially to Halliburton, although in Johnson’s day it was called Brown & Root.  For a full discussion of LBJ’s ties to Cheney’s future employer, check out Robert Caro’s definitive biography of LBJ.

Add to the military contractors multinational businesses that have always relied on U.S. governments to use our military to protect their interests, agricultural companies, airplane manufacturers, mining and metals companies and weapons makers.

President Dwight Eisenhower called it the military-industrial complex.  But even though he warned us about it in his farewell address to the nation in 1961, Eisenhower really didn’t feel he could do much to stop its natural flow, and the result was Viet Nam.

Doesn’t that sound a lot like our current president?  Doesn’t Obama seem keenly aware of our problems, including but not limited to the disasters we have created with our military adventurism, but he believes he is limited in what he can do, so he triangulates again and again. 

Leadership style is another thing Eisenhower and Obama have in common: both set a broad goal and then watch Congress hash it out.  Both prefer to lead by finding and then reinforcing the consensus.

I have read people compare Barack Obama at various times to FDR, Lincoln and Jimmy Carter, but to me, he’s looking a lot like Ike, but without the advantages of a post-war boom and a strong Senate Majority Leader named LBJ.

Two articles in yesterday’s New York Times reveal how attempts to “game the system” have corrupted both college and the process of getting into college. 

On page one of The New York Times, Catherine Rampell tells us of 10 law schools which recently have uniformly added additional points to every student’s grade point average.  For example, Loyola Law School in L.A. is giving all recent students a boost of one-third of a point.  The goal, to state the obvious, is to make the graduates more attractive in the job market.

But it’s clearly a corruption of the system that has grave ramifications in the real world.  Let’s start with what lawyers do.  The core task of the lawyer is to construct an argument or contract based on documents and articles that he or she has analyzed. Sometimes if you’re a litigator, you have to make an oral presentation of what you’ve done.  That sounds just like school work.  In other words, how you do in school really does predict how you are going to do as a lawyer.  Furthermore, because of uniform bar standards, the courses and curricula of most law schools are very, very similar, meaning that an A from Loyola is pretty much comparable to an A at Michigan, that is, if everyone is playing by the same rules and grading the same way.

By the way, not every profession or job is as linked to performance in school as the legal profession is (or engineering, to name another one).  In fact, to excel in school requires only a handful of the many diverse skills and natural talents that people can possess.  More on this point after looking at the other article in yesterday’s Times.

In the local section, Sharon Otterman reports that the New York City Department of Education is thinking about changing how it tests for its gifted programs because so many parents are gaming the test by putting their kids through extensive preparation.

I wonder what these parents think they accomplish by pushing their kids beyond their natural capabilities instead of understanding those capabilities and nurturing the real talent that I believe that every child possesses.  Trying to game the system to help your child advance academically has been going on for about two decades now, and every year it seems to trickle down to more families.  They’re called “helicopter parents” and are the ones who hire consultants to get their kids into the “right” kindergartens, hold their kids back a year, have their kids take one course in summer school to have a lighter load during the high school year, put their kids through rigorous SAT training and hire people to write their kids’ college application form essays.

What will these children do when they are adults in the real world left to their own devices, at least those that don’t go into the family business or have trust fund money? (And if they are set up for life, why bother in the first place?)

Why are both colleges and parents corrupting the system for what they think is the benefit of the young people in their care?  It comes down to the pursuit of money and respect, but then again, in America, all we respect is money, so it comes down to the Benjamins (and the Grants and Jacksons, and even the Washingtons!)

Start with the thought process of the helicopter parent: If I can get Emma into a good kindergarten, she’ll go to a good elementary school, get into a gifted high school, attend an Ivy League college and get a job at a major law, finance, publishing, architecture, accounting, PR or consulting firm and have an enormous income, or maybe make the connections to get in on the ground floor of a major business venture or do her residency in a top-flight teaching hospital.  In any case, she’ll have a big fat salary. Which mostly won’t happen if Little Emma becomes a school teacher, physical therapist, electrician, appliance repair person, computer or design technician, social worker or a plumber.  These professions, some of which do require someone to get a good education, are all interesting and needed by society, but in today’s world they don’t pay all that much money, making more parents want to push their kids into high-paying professions. 

In other words, if the differences in salaries between professionals, business owners and executives and everyone else weren’t so great in the United States, then parents and schools would not feel the need to act in a corrupt and dishonorable manner.  The parents, children and schools contributing to this corruption believe, and wrongly I think, that the purpose of college is nothing more than to purchase a certification that enables you to get the job you want. 

The article on law schools raising GPAs mention that other universities are paying students to take non-paid internships in the public and nonprofit sector, while others are paying law firms to try out their students.  Both seem admirably practical and can be roughly construed as kinds of “work-study” aid.  Both help their students get a leg up in the job market without doing anything to lower academic standards.  Bravo to these schools for trying to help students in an ethical and fair manner.

Yesterday I think I pretty much demolished the ideas that less government is always better and that the private sector can always do things better than government can.  Today, I want to tackle the companion idea that lower taxes are always better.

We currently have historically lower taxes and historically higher debt than at any time since before World War II.  As we have lowered taxes, we have nevertheless kept spending and paid for it by borrowing money.  What would have happened if instead of borrowing that money, we had kept taxes high or not lowered them as much?

To answer this question we have to know two things: who pays the taxes and who lends the money, because the first flow of money will go from those who loaned it to the government to those whose taxes were thereby lowered.

The wealthiest families and individuals and bigger businesses are the ones whose taxes have been lowered the most over the 30-year rein of Reaganism.   That’s just the facts. 

Moreover in theory, lowering taxes alomost always gives more money to the wealthy than to others.  Here’s why: the higher taxes go, the more of total taxes the wealthy should always theoretically pay.  Even when tax rates are flat, the wealthy pay more because they earn and have more.  As we all know, rates are progressive, which means that the more you make, the higher the tax rate.  For example, the highest tax rate before Reagan pushed through his first tax cut was 70% and now it’s 35%.  It is theoretically possible that we could have a tax system in which rates were so regressive (the more you make, the lower the percentage of your income you pay) that the wealthy paid less when taxes were raised, but it would probably first take the installation of a dictatorship.

It’s clear that with the lowering of taxes, in what actually has happened since 1980 and in theory, rich people get the biggest break, which means they have the most extra money to spend.

Now who are the lucky souls who fund the debt that the government floats instead of collecting taxes?  I call them lucky because when they loan the federal government money, they are making the single safest investment that has ever existed in the entire recorded history of humankind: the U.S. Treasury bond!

Why it’s the very same people who got the most extra money from lowered taxes—the wealthy—who buy the bonds.  Sure, people in the middle class and the poor may have a couple of government bonds, but the wealthy own the preponderance of T-bills and other government investments not held by China and other foreign countries.  In other words, under low-tax regimes, instead of wealthy people giving taxes to the government, the government ends up creating safe investment havens for the wealthy, and in the recent past, foreign countries as well.

And who pays the interest?  Future generations do, as interest to the bondholders, which means that the same tax base in future years will not be able to cover as many goods and services for the common good.  If a low-tax regime persists, and remember that except for the boom Clinton years we have had a low-tax regime since 1980, a pernicious double helix is created, as the increase in debt and the decrease in government effectiveness both spiral into a societal dance of death.  It happened in 16th century Spain and if we don’t raise taxes soon, it will happen here.

The rich primarily get the investment income, whereas all of us pay it out, so when we lower taxes and fund the government by borrowing money as Reagan and both Bushes did and, unfortunately, Obama now is still doing, we are making another net transfer of wealth up the economic ladder, this time from the poor and middle classes to the wealthy.

The greatest folly in all of this, of course, is that so much of the current federal deficit was directly caused by the military adventurism of the last 30 years, and specifically the sheer disasters of Iraq and Afghanistan.

I’m not saying that governments should never borrow money and instead fund all operations with taxes.  For example, municipal bonds earmarked to build needed schools and highways make a lot of sense, just as it makes a lot of sense when a business borrows money to build a new factory or improve its computer systems.  And just as some businesses have working lines of capital to provide them with the cash flow they always need, perhaps government also needs a ready source of funds that makes more sense to fund by borrowing instead of taxing.

What I am saying, though, is that when you hear conservatives talk about keeping taxes low or lowering them still more, they are advocating that we create investment opportunities that lead to a mass transfer of wealth from the poor and middle class to the wealthy.

The two constants that unify the Republican party and the right-wing since the ascension of Reaganism in the late 70’s are the calls for lower taxes and less government.  These are the two pillars of the right that unify the wing-nuts, the Christian right, the libertarians and the dwindling number of what used to be called “Main Street Republicans” or “Rockefeller Republicans” (most of whom have fled to the Democratic party, driving that political party rightward).

The pull of these two ideas is obvious:  On the surface when there is less government and lower taxes people have more freedom and more money. 

Over the next few blog entries, I want to take a look at what the alternative is to less government and lower taxes.  I think at the end of the day, we’ll find that less government and lower taxes do not lead to more wealth, but instead, to a transfer of wealth from the poor and middle class to the extremely wealthy.

Let’s start with less government, not as a to-die-for philosophical concept, but as an option to address problems and challenges.  Are public schools better or private/charter schools?  Should governments or private businesses run prisons?  How much should our military do in the war and how much should it job out to consultants such as Blackwater and KBR? Should we regulate industries or let them set their own standards?

One of our leading beliefs over the past 30 years embedded in virtually every media story about business and economics is that the private sector can accomplish any task much more efficiently and with a higher-quality solution than government can.  Comedians joke about government workers and journalists assume the private sector always is the first choice.  Both Republicans and Democrats rail against big government when running for office.

But if businesses were inherently so superior to governmental bodies, why would it be the case that 56% of all new business fail within four years? By contrast, the number of municipalities that have ever gone bankrupt in the United States is infinitesimally low. 

Some will immediately realize that one main reason for the low rate of government failure is that it is easier for a stable government to raise taxes or borrow money than it is for an unstable business to find financing to continue operations, but that is exactly one of the advantages of having government address broad social needs like building and repairing roads, protecting our communities, educating our young or providing health care to the elderly and poor.  A government, while it must bend to the will of the people, can think and act long term and therefore not break under the momentary pressures of the marketplace.

Let’s go beyond philosophy now and look at performance:

• Virtually all studies on charter school performance demonstrate that charter schools almost always fail to improve student performance and often worsen it.  Here is one of many examples: a recent Stanford University study found that the math performance of 46% of charter schools is indistinguishable from public schools, 17% had substantially higher scores and 37% of charter schools had substantially lower scores than their public school equivalents.
• The privatization of our prisons over the past 25 years has been a festering scandal of prisoner abuse and fraud.
• Did you prefer how our wars went when we used relatively few contractors as in World War I and II, or now that we’re making massive use of military contractors in Iraq and Afghanistan?  
• When the government loans money to students for college and career training, the terms are significantly better than when the private sector was allowed to do so between the early 90’s and this year. 
• We all hear jokes about trying to interact with government workers, and I can honestly say that every call I have ever made to a government agency that didn’t know me already was an extremely frustrating experience.  But why don’t you spend the afternoon trying to talk with your cable system provider, telephone service provider, a company that sold you your computer, the electrical power company and one airline, and then tell me that the private sector is any better.

So let’s look at what happens every single time a private for-profit company does something that government can do or traditionally has done: Whether for schools, prisons, or cooking and delivering meals to soldiers, the private company makes (or sets its budget with the intention to make) profit for its key executives and shareholders. 

Now it’s a simple fact that low level government workers, many of whom are unionized, typically make more money than their peers in the private sector, most of whom aren’t unionized, whereas private sector presidents, officers and senior management make far more than department heads and other civil service executives.  

Some government contracting makes sense, e.g., to manufacture tents for soldiers or provide a special social service to an “at-risk” population.  In fact, some very successful government programs; for example, Medicare and Medicaid are really public-private partnerships in which government uses private insurance companies for claims processing and quality control.

But whether successful like Medicare benefit management companies or a sheer failure like privatized schools, prisons and war-making, when the government awards a contract out instead of doing it with its own resources, it is taking money from lower paid employees, who tend to be middle class, and giving it to executives and investors, who tend to be wealthy.

In the case of education, lower-paid nonunionized charter school teachers replace higher-paid unionized teachers.  The idea that this transfer of wealth from workers to management will increase student performance goes completely against the grain of basic U.S. thought.  Remember, an ideological tenet we hold especially dear is that people who make more money generally do a better job than those who make less money in any given field.  If it works for attorneys, marketing executives, athletes, movie stars, architects, engineers, physicians, accountants, business leaders and other professionals, why doesn’t it work for school teachers?  Shouldn’t the basic economic flow of money in charter schools from school teacher to executive by definition produce a decline in performance? Of course it should, and the statistics prove it does.

So whenever politicians are making a case for smaller government that involves one of the basic goods and services that have traditionally been a task of democratic governments in the U.S. or Western Europe, part of that case always involves a massive transfer of wealth up the economic food chain, typically from the middle class to wealthy.

Tomorrow I’ll look at that other sacred cow of conservatives: lower taxes.

Time to do some blog housekeeping again.

First, I want to make sure everyone sees the response to my June 7 blog on Nestlé’s new product–an elaborate system that produces a ton of waste just so people don’t have to boil water for tea.

As you’ll see, John Sargent thought I implied that Nestlé was no longer doing exploitative marketing against which people have boycotted for years.  I wasn’t saying that, but John is right that I could have used the opportunity to remind people that there is still a boycott of Nestlé products.  John does in his response:

John Sargent says:

June 7, 2010 at 12:49 pm

I am surprised by the tone at the end of this article which seems to suggest that Nestle are no longer guilty of inappropriately marketing their baby milk products in developing countries. If only that were true. Sadly this isn’t the case. They are still in breach of the WHO guidelines and the boycott on their products remains.

See the Baby Milk Action blog:
http://info.babymilkaction.org/news/campaignblog260510

Find Baby Milk Action on Facebook:
http://www.facebook.com/group.php?gid=4978994961

Moving right along, I’ve posted twice about the need to make sure the National Commission on Fiscal Responsibility and Reform, on June 2 and February 19, 2010.

In my June 2 blog entry, I asked readers to write all the Commission members asking them to make sure that the Commission recommends that the federal government pays the Social Security Trust Fund back all the money it has been borrowing from the Trust Fund since the Reagan administration.   I gave everyone a list of the contact information for all the Commission members, which I will repeat at the end of this blog.

I thought I would post two sample letters for those interested in joining the “Save Social Security” movement.  The first one I sent to all the Commissioners yesterday; the second one comes from my assistant, Colette.

MARC’S LETTER

June 8, 2010

Honorable Alan K. Simpson
Burg Simpson Eldredge Hersh Jardine, P.C.
1135 14th Street
P.O. Box 490
Cody, WY 82414

Dear Honorable Simpson:

I am writing you concerning your role as part of the National Commission on Fiscal Responsibility and Reform. 

As you know, under the Reagan Administration the federal government started borrowing money from the Social Security Trust fund instead of raising or maintaining taxes or floating other Treasury debt.  Many people such as Peter Peterson would like the United States to walk away from these loans that the federal government has taken from the Social Security Trust Fund and not pay the money back as part of a package to deal with our pressing debt problems. 

As the owner of a very successful small business, I am quite concerned about this alarming and irresponsible proposal.  If we do not pay this debt back, it will be disastrous not only for the millions of people who will see their Social Security benefits gutted, but to the ability of the U.S. to borrow money  because it will mark the first time that the country has ever defaulted on a loan.  A much better approach to addressing our national debt is to increase corporate, income and capital gains tax.

Please make sure that the National Commission on Fiscal Responsibility and Reform recommends that the federal government repay the Social Security Trust Fund every penny it owes so that Social Security can remain solvent without major changes and the federal government can work on its real challenge, which is lowering the federal debt. 

Best regards,

Marc Jampole

COLETTE’S LETTER

June 8, 2010

Honorable Alan K. Simpson
Burg Simpson Eldredge Hersh Jardine, P.C.
1135 14th Street
P.O. Box 490
Cody, WY 82414

Dear Honorable Simpson:

I am writing you concerning your role as part of the National Commission on Fiscal Responsibility and Reform. 

As you know, under the Reagan Administration the federal government started borrowing money from the Social Security Trust fund instead of raising or maintaining taxes or floating other Treasury debt.  Many people such as Peter Peterson would like the United States to walk away from these loans that the federal government has taken from the Social Security Trust Fund and not pay the money back as part of a package to deal with our pressing debt problems. 

As someone who has contributed to the Social Security Trust Fund for over two decades, I am deeply concerned that the money promised to me from this Trust will not be available to not only me but others who have contributed to the system.  As promised, I want the money to be available for my family.  The government can’t solve its debt problems by forgiving the debt it owes to its citizens. 

If the Social Security Trust is gutted, millions of people will be forced to rely on other forms of government programs such as Medicaid and Social Security Disability which will also become insolvent.   The federal government needs to concern itself with the welfare of its citizens in need rather than corporate welfare or the desire of the wealthy to increase its wealth at the expense of fellow citizens.

The federal government has a responsibility to ensure that Social Security remains solvent and the promise to provide financial support to its citizens in their retirement be fulfilled.  The federal government should address the national debt problem by increasing corporate, income and capital gains tax. 

Sincerely,

Colette Roessler

COMMISSION MEMBERS

Here are the Commission members:

Co-Chairmen:

Sen. Alan Simpson, former Republican Senator from Wyoming
Hon. Alan K. Simpson
Shareholder
Burg Simpson Eldredge Hersh Jardine, P.C.
1135 14th Street
P.O. Box 490
Cody, WY 82414
asimpson@burgsimpson.com

Erskine Bowles, chief of staff to President Clinton
President
University of North Carolina at Chapel Hill
910 Raleigh Rd
Campus Box 9000
Chapel Hill, NC 27514
ebowles@northcarolina.edu

Executive Director:

Bruce Reed, chief domestic policy adviser to President Clinton and chief executive officer
Democratic Leadership Council
600 Pennsylvania Ave., SE
Suite 400
Washington, D.C. 20003

Commissioners:

Sen. Max Baucus (D-MT)
511 Hart Senate Office Building
United States Senate
Washington, D.C. 20510

Rep. Xavier Becerra (D-CA 31)
1119 Longworth House Office Building
Washington, D.C. 20515

Rep. Dave Camp (R-MI 4)
341 Cannon House Office Building
Washington, D.C. 20515

Sen. Tom Coburn (R-OK)
172 Russell Senate Office Building
Washington, D.C. 20510

Sen. Kent Conrad (D-ND)
530 Hart Senate Office Building
United States Senate
Washington, D.C. 20510-3403

David Cote, chairman and chief executive officer, Honeywell International
Honeywell International Inc.
101 Columbia Road
Morristown, NJ 07962

Sen. Mike Crapo (R-ID)
239 Dirksen Senate Building
Washington, D.C. 20510

Sen. Richard Durbin (D-IL)
309 Hart Senate Building
United States Senate
Washington, D.C. 20510

Ann Fudge, former chief executive officer, Young & Rubicam Brands
2400 Beacon St, Ph 601
Chestnut Hill, MA 02467

Sen. Judd Gregg (R-NH)
201 Russell Senate Office Building
Washington, D.C. 20510

Rep. Jeb Hensarling (R-TX 5)
129 Cannon House Office Building
Washington, D.C. 20515

Alice Rivlin, senior fellow, Brookings Institute and former director
Office of Management & Budget
Brookings Institute
1775 Massachusetts Ave, NW
Washington, D.C. 20036
arivlin@brookings.edu

Rep. Paul Ryan (R-WI 1)
1113 Longworth House Office Building
Washington, D.C. 20515 

Rep. Jan Schakowsky (D-IL 9)
2367 Rayburn House Office Building
Washington, D.C. 20515

Rep. John Spratt (D-SC 5)
1401 Longworth Building
Washington, D.C. 20515

Mary Kay Henry, president, Service Employees International Union
1800 Massachusetts Ave NW
Washington, D.C. 20036