Thursday, August 6, 2009

Blue Dogs are Frauds

OK, the title's a little strong, but I think the point's easy to make.

The vote confirming Sonia Sotomayor occurred on the day this is written. No Democrats voted against her. If one accepts -- and I do -- that Sotomayor is basically a liberal (though possibly a later disappointment to liberals on abortion), why didn't any of the so-called conservative Democrats, the Blue Dogs, vote against her?

They don't seem to have any reservations about voting to hang-up the president's health care plan, on the basis that it costs too much money or that it's too "socialist," but they endorse Sotomayor. It seems like a terrible disconnect.

But there's a reason for it.

Voting for Sotomayor doesn't cost these guys a nickel. There's no business or industry that has a financial interest in blocking her confirmation. If she were to lose, President Obama would nominate someone equally as liberal who would get confirmed. So, though many businesses and industries might prefer a more conservative Justice, that's not going to happen As a result, there's no reason for large corporations to buy -- I mean contribute to the campaigns of -- Blue Dogs.

Health care financing (because it's not really health care reform, that actually would save a bunch of money) is a different story. Lots of people will put lots of money in your war chest if you vote against the president's plan or work to delay it or water it down.

And that's really what it's all about. Some conservative Republicans may honestly feel the Obama plan's a bad idea. I don't agree, but I get that. The Blue Dogs aren't in the same boat, it seems to me. If they were truly conservative, the vote wouldn't have been 68-31. The only thing they want to conserve is their access to big bucks.

While that finishes this edition, I want to let anyone who's reading this know that I now have a book on an entirely different subject, available on the Internet, for review and purchasable download. The book, Mobile Millionaire, about mobile home investment as a means to achieve cash flow and wealth, is accessible in any of the following ways:

1) Go to http://www.scribd.com and in the search box, type in the words, Mobile Millionaire. After scrolling down past some dumb ads, you'll see the book.

2) Go to http://www.google.com/advanced_search and type Mobile Millionaire in the exact phrase box and in the top box (all the following words) type in Business Finance.

3) Go directly to the site where the book is (and you can click on this if your e-mail system permits it): http://www.scribd.com//doc/17883658/Mobile-Millionaire

That's it for now. Thanks for reading.

Friday, March 13, 2009

The Next Republican Talking Point - WRONG!

Most recessions last a maximum of 26 months. The only way this one will last longer is if the Democrats/President/Obama Administration mess it up.

I don't believe the above sentences but there are Republicans who are already beginning to say it. And they're wrong.

As we've written in an earlier post, there's a legitimate concern about the current economic course our country is taking, in the sense that it could ultimately cause inflation. But it can't cause the recession to last longer.

Without going into a wholesale re-stating of the prior blog, you can't make a recession last longer by more -- or even excessive -- spending. You might ultimately cause inflation as a result. You WILL cause the new debt to be a burden (though economists disagree with each other on how big that burden will be) on future generations. But it's impossible to make a recession last longer by pouring more money into the economy and creating new debt.

The GOP and their ventriloquist's assistants will say that by increasing taxes on those earning $250 thousand and more per year, job creation will be stifled.

That also makes no sense.

First, as conservative economists rightly say, corporations don't pay taxes. Second, did you ever know any employer who hires people (s)he's not related to, unless there's a need or a profit to be gained by that hiring?

Let's look at those two issues a little more carefully.

On the subject of corporations paying taxes, the answer is simple -- they don't. Corporations (or LLCs or proprietorships for that matter) are a pass-through mechanism. They get charged a tax but they add that cost onto the cost of their products. This becomes obvious with sales tax, but except in rare circumstances, all taxes get passed on in the form of higher prices.

Second, let's examine the claptrap about taxes or a higher minimum wage causing the creation of fewer jobs.

If I'm an employer, I don't hire someone because I want to do the employee some good. If I can, that's nice and a really good side effect. But, I hire that person because (s)he can make me more money than I'm paying in salary and benefits (or I'll soon be out of business and properly characterized as an idiot). If I'm running a fast food restaurant and paying $9.00 an hour in salary and benefits to an employee, I'd darned well better be making more than $9.00 an hour on that person's labor.

If I'm not, I'll fire that person or never hire her/him in the first place.

Another fallacy with the argument is that the tax "increase," which is actually not an increase but a return to the way things were before Bush's tax-cuts, isn't set to occur until 2010 or 2011, at which point the economy is expected to be recovering. Does anyone not think Obama is smart enough to delay the ending of the tax cuts if the economy's not recovering yet?

The problem, if there is one, with the recovery plans is that they're more complex than can fit into a slogan. But the reality is if this recession lasts longer than the average one, it's partly because of what President Bush and a friendly Congress have done, and partly a matter of things happening that weren't under their control, or anyone else's.

Saturday, February 28, 2009

It's Really Not About Politics

If you're tired of reading about the stimulus package or President Obama, you'll be forgiven if you don't read this post. This is all about the stimulus package and how it really isn't about politics, unless someone makes it so. It's about economics. Or, put another way, It's The Economy, Stupid.

There's been a lot of talk on the airwaves and in offices around the country about the stimulus bill that was recently enacted, and much of it reflects that people just don't get it.

The complaints are that some of the money is going for questionable projects, or that so much money is being spent that inflation will become a problem. While the second issue actually is a reason for concern (more on that momentarily), the first is nonsensical.

Let's understand what we're talking about.

The economy is in shambles. The Gross Domestic Product in the most recent quarter was down over 6%. That means that the total goods and services produced in the economy, when expressed in dollars was 6% less than the prior quarter. That's the first time that's happened in a quarter century. That means we have to do something, and what it is we do is almost less important than that we take some action as a nation to overcome the problem.

The reason for the need for action is that if you take none, the condition spirals downward in a very vicious cycle which leads to fewer products and services purchased which leads to fewer jobs and even less money in the economy to buy anything and on it goes.

So if the government spends a lot of money -- yes even if it's borrowed money -- that puts a lot more money into the economy and that generates jobs. And, if some of the money is used to perform a study on how to reduce the odor of pig waste in Iowa, I'm entirely in favor of that spending, at the moment. That project will pay a salary to the researchers and to the folks who write the report. Is the project useless, otherwise? Probably and it bloody doesn't matter, folks.

The people who get the money for doing that project will spend it on groceries and computers and electronic doo-dads, thus employing people in this and other countries who will spend more money on things we'd all agree are useful.

That gets the economy going without creating a bubble in real estate or dot-coms or stocks. It creates real jobs with real money.

Let's talk about the inflation risk, and then we'll cover the subject of all the crying over the increase in the deficit and the national debt.

Inflation is the increase in prices that's brought about when there are so many dollars in the economy (or drachma or pesos, depending on what country you're in) that no matter how many goods can be produced, there's more demand than can be satisfied, so prices go up. The demand is caused -- in part -- by the number of dollars floating around. It might be hard to believe at the moment, but there are times when everyone's saying "I have a bunch of money and I want to buy the latest greatest Ipod." If enough people are saying that and Apple can't keep up with the demand, the price of the latest-greates will go up.

With all the spending that's contained in the stimulus package, concerns have been expressed about the risk of inflation spreading through the economy. Don't worry about it. Yet.

With all the money being spent, you won't have inflation caused by it in the near term. That's because of what economists call underutlilization of capacity. What it means in English is that factories and other entities which produce goods have plenty of capacity to produce more, because they've been producing so little due to vastly reduced demand.

So if you and I and our neighbors suddenly find ourselves earning more money (or in some cases earning money where we weren't before), we can still spend like drunken Congressmen, and it'll be a long time before manufacturers are at capacity (the point at which prices would start going up). That's just as true of cereal as it is of Chevrolets.

So, so far, it's a case of Don't Worry Be Happy.

But if the stimulus really works really well, inflation will be a risk and may become a reality. If everyone's working and earning to the extent that unemployment is down to about 3%, there really will be too many dollars floating around. One of the good things about inflation, however, as distinguished from recessions, is that it's pretty easy to cure. That's done by increasing interest rates, primarily, but there are other tools available to the Federal Reserve and the government. You can take excess spending out of the economy, as well, by reducing the amount of money banks are allowed to lend (the process is a touch complicated to spell out here), which reduces the amount businesses have to spend on products.

The point is that the tools for inflation fighting and recession fighting are well-known to everyone but the public.

If there's too little employment and spending and lending, add money to the economy. If there's inflation, remove some.

The other day, when discussing this subject with her mother, a bright young woman asked me if it wouldn't be possible for normal free-market forces to overcome the recession we're experiencing now. It's a really good question and a lot of people are asking it. The answer is a qualified yes. In other words, "yes, but."

Recession and inflation along with business increases and decreases are normal. They're referred to as "the business cycle," and economists sometimes joke that no one's repealed the business cycle. The problem is that when you have the occasional extreme recession or extreme bubble, without intervention, things would get a lot worse before they'd get better, just depending on the normal workings of the economy.

If you need an example of that, look at the time between 1929 and 1933. In 1929 things crashed in the economy. It wasn't just the stock market. Because the Hoover Administration didn't do very much (and what they did do was dumb, including high tariffs and increasing taxes), the severe recession turned into the Great Depression.

Although many people (including Your Humble Servant) have compared 1933 to 2009 and FDR to Obama, like most comparisons, they're not completely on the mark. Obama's interventions have taken place at an earlier place in the downward cycle than FDR's did. That's a good thing because that earlier series of actions will eliminate the likelihood of sliding into Depression. FDR couldn't do anything until he was inaugurated, of course, and by that time Hoover had done more damage to the economy than was done to ours by January 2009.

Finally (and I find it hard to believe how long this post is), much has been made by conservatives (though few conservative economists) about how all this borrowing will be paid for by our grandchildren. Oddly, few of these folks were complaining during the Bush Administration (OK, this part IS about politics), when all the spending was being done and deficits were being built up. The national debt, before Obama came into office was in excess of $10 trillion, but they weren't complaining until it got near $11 trillion? That's not about the economy. It's about trying to spin the political atmosphere to their advantage.

Monday, February 2, 2009

Bless the Current Republicans (kind of kidding)

The Obama stimulus package passed in the House of Representatives without a single Republican vote and that's great. I hope it passes the Senate in the same way.

I'm a Democrat.

But I'm a Democrat with a little knowledge of U.S. political history, and after this, you'll have some information you might not have already.

In 1932, Franklin D. Roosevelt defeated Herbert Hoover in the latter man's misguided attempt to be re-elected. The Depression was in full swing and FDR won decisively and carried with him a majority in both houses of Congress.

The Republicans who were left voted against every New Deal program offered by the new administration, but virtually all of them passed (the rules on senatorial filibusters were different then).

The result of the Republican efforts were clearly seen at the next election. Normally, two years after a president wins the White House, his party loses some seats in Congress. Not in 1934. The Democrats increased their majorities in both houses.

The Republicans continued their negative ways and in 1936, FDR won in an election that was at that time, the biggest landslide in U.S. history, beating the governor of Kansas, Alf Landon. The GOP also lost more seats in both houses of Congress. After that election there were only 17 Republican senators.

They were about as well-represented as intellectuals in Salt Lake City.

So, although at this writing it looks like the package might get some Republican votes I'd like it to pass without them.

And I hope the Republicans continue to be obstructionist.


If you're masochistic and would like to read my writing on other subjects, try: http://JeffOnRadio.blogspot.com and/or http://JeffOnHealth.blogspot.com.

Sunday, January 25, 2009

The Right Decision - But Not by the Court

There was a case recently decided by the Supremes, as I occasionally refer to the justices of the U.S. Supreme Court. The Plaintiff (the person who sues) was named Ledbetter, so the case is naturally known as Ledbetter (too obvious? sorry).

To understand the case we need to understand something about how one part of the law works. If you have a basis for suing someone, there's a time limitation for filing that suit. If you don't file it within that time, your lawsuit will be subject to being dismissed.

With that out of the way, it's easier to understand the Ledbetter decision. Ms. Ledbetter sued for sexual discrimination, alleging that men who did the same work she did had been getting paid more than she did. If her allegation is true, under the law she'd be entitled to collect money from her now-former employer.

Without deciding the merits of her case, the Supremes decided that she wasn't entitled to have her case proceed, because the time to bring her suit had started running on the first paycheck she received where a man allegedly received more for the same work.

Since Ms. Ledbetter says she didn't find out about the discriminatory pay until years later, she said that was unfair and not what the law intended.

The other day both houses of Congress passed a law that said, in effect, that Ms. Ledbetter's correct and the Supremes were wrong.

While Congress can't overturn a Supreme Court ruling, their legislation -- assuming President Obama signs the law -- will have the impact on any future such case that a person brings to court. Under the new law, the old law will be interpreted to mean that the statute begins to run when the supposed victim discovers the discrimination.

As a side note, I'm not characterizing Ms. Ledbetter or any person who claims discrimination as a fake. I use the phrase "supposed victim," only because until something's proved in a court, it's presumed to be "alleged" or "supposed," because the matter hasn't been decided.

As a matter of logic and fairness, the Court was wrong and Congress was right. If you don't know of something that victimizes you and causes you financial damage, how are you supposed to know that the clock is ticking on your right to sue?

This demonstrates that elections matter and the one that elected our 43rd president created a court that's very anti-employee. But as we all know, we've just inaugurated his replacement.

If you'd like to read my writing on other subjects, you can try: http://www.JeffOnHealth.blogspot.com OR http://www.JeffOnRadio.blogspot.com

Tuesday, January 20, 2009

Crying About An Election

As this is written, Barak Obama is scheduled to be inaugurated later today.

Over the weekend, I was watching CNN and a young African-American man of 14 was talking about the night of the election. He had to go to bed before the results were in because his mom told him that it was a big night, but rules were rules and bedtime was bedtime.

His mom woke him a couple of hours later and he saw that she was crying. "What's wrong, Mom?"

"Not a thing," she replied. "Obama won."

Hearing that story brought a lump to my throat and put me on the verge of a tear, both because I felt -- to a limited extent -- the joy and meaning she experienced and because I remembered another election with another kid being awakened.

That kid was me.

It was late on the night of June 4, 1968 and I was that young teenager who'd gone to bed early. It wasn't because of a strict bedtime rule, but because I was exhausted and put myself to bed. Earlier that day, I'd been at the Kennedy for President headquarters in Van Nuys, California.

At this distance in time I can't remember specifically what I did in my nameless volunteer capacity, but I believe it involved calling registered Democrats and arranging for their transportation to the polls. We worked until the polls closed and then departed the headquarters which was located across the street from a Chevy plant (what could be more appropriate for a Democratic headquarters?).

I'd been invited to go to the Ambassador for the celebration of Robert Kennedy's expected primary victory. I declined because I'd have been the 7th person in a six-person car. Being overweight at the time, I was both concerned for others' discomfort and self-conscious about my own.

As a result of course, I missed both the joy of Kennedy's victory over Eugene McCarthy (and inferentially, Lyndon Johnson, the then-despised architect of the morass in Viet Nam), and the horror that followed.

So it looked good but not certain when I went to sleep.

I awakened to my dad's touch on my shoulder. I vaguely remember asking what was wrong, because he never awakened me under normal circumstances. "They shot Kennedy."

He wasn't crying and I didn't, since big boys didn't cry back then. But I got up and watched the coverage and we were up until late. Kennedy wasn't dead, but he was in the hospital and he lingered for a couple of days.

It was a terribly sad time and when people cried, it clearly wasn't for the same reason as people have cried at the news of Obama's victory (or today during his inauguration).

Those of us who wanted RFK to win felt as I do now, that the election of someone can make a MAJOR difference.

At that time, in that place, it seemed like the end of everything good. Today, I'm thrilled as I've been since November.

I'm worried, of course, about Obama's safety, because I keep hearing people -- mostly but not exclusively racists -- say that he won't live beyond....and they finish the sentence in different ways. Of course, I heard them say that before and during the campaign, and he obviously defeated those predictions.

I'm a little more confident about his safety because I don't think that the people who wanted both Kennedys and Dr. King killed care much about Obama.

In any event, the near future looks a lot better than it did 2 years ago. Bush isn't president and Obama is. We have nothing to fear but fear itself (did someone else say that first?).

If you'd like to read my writing on other subjects, you can try: http://www.JeffOnHealth.blogspot.com OR http://www.JeffOnRadio.blogspot.com

Saturday, January 17, 2009

Rights for Criminals

Criminal rights should be limited in my opinion. By that I mean that if someone's convicted of a crime, they should experience some deprivation of their freedom and if they're dangerous, they should be kept away from the rest of us for a period of time to protect the rest of us.

On the other hand someone who's legally accused of a crime should have a number of rights, because their opponent is the government and the government has a wide variety of tools that individuals don't.

One of the rights we tend to take for granted is the right provided by the 4th Amendment to the United States Constitution, to be free from unreasonable searches and seizures. That right has been amplified by decisions of the U.S. Supreme Court over the years. We have the right to remain silent, when questioned by police officers, so we avoid saying something that could be used against us in court. We also have the right to be told of that right to silence.

Also, police cannot stop anyone at anytime to search for anything, just because they want to. You and I may have nothing to fear from such a search (OK, I'm not too sure about you), but we have the right to move about freely without fear of such a stop for no reason. One of the things that's become part of the law on this subject is that the police have to have what's called "probable cause" to stop you to search for evidence of a crime.

A number of decades ago, the Supreme Court formulated something called the exclusionary rule. That rule was designed to discourage police misconduct when it came to going too far in searches and seizures. This isn't to suggest that there was a lot of police misconduct, but it did happen occasionally. The exclusionary rule says that if a police officer stops you and doesn't have probable cause or doesn't advise you of your right to remain silent, and evidence is developed as a result of those failures, that evidence will be excluded from any later court hearing.

As said, the rule isn't designed to protect the criminal who is stopped. It's designed to stop the police from mistreating all or any of us, because it teaches that criminals may go free if the police don't conduct themselves properly.

A recent case narrows all of our rights. In a 5-4 decision, the court ruled that if the police make a stop based on a warrant and find evidence of a crime, that evidence can be used even if the police records on the warrant were wrong.

Here's what happened. The defendant was driving in front of a police car and the police did what they have the absolute right to do. They ran the license plate and found that there was an outstanding warrant for the owner of that plate. They had the right to stop the person if there was a warrant and they had the right to arrest him and search his car. All legit.

But the problem was that the police's records were in error. The warrant had been recalled and there was no outstanding warrant. The problem is that the police, in the belief that the warrant was legitimate, found drugs in the possession of the defendant and prosecuted him for this additional crime. The defendant said that since there was no warrant, there was no probable cause for the stop and therefore, the evidence should be excluded.

The prosecutor admitted that if it hadn't been for being told of the warrant there was no probable cause.

The Court said that the police acted in good faith (there's no question that the officers did) and that in weighing the benefits of excluding the evidence and letting the criminal off the hook versus enforcing the law when the police acted in good faith, they would allow the evidence to be used.

Opinion: This decision is dead wrong.

Again, if you assume that the rights of the non-criminal are at risk when police powers of search and seizure are broadened, this becomes important. But let's look at the use of the rule and its effect.

If that evidence had been excluded, while it's true that the individual criminal would've gone free, the fact is that police departments around the country would be encouraged to clean-up their record keeping so that a mistaken stop based on a non-existent warning wouldn't result in a case being thrown out.

Instead, police are now encouraged to keep old warrant records on their lists, because it provides an excuse to make a stop and allows the evidence so discovered to be used. I've never had a warrant issued against me, but if one had been mistakenly issued or issued correctly and then withdrawn, I could be at constant risk of being stopped for nothing. In some states that could result in an arrest for possession of a small amount of drugs, and there are many problems associated with police stops of men of minority groups, too complex to discuss in this posting.

But the bottom line reality is that all of our rights have been diminished by the 5-4 decision, and we can only hope this will be corrected in a subsequent decision.

If you'd like to read my writing on other subjects, you can try: http://www.JeffOnHealth.blogspot.com OR http://www.JeffOnRadio.blogspot.com