WELCOME TO OPINIONS BASED ON FACTS (OBOF)
&
THINGS
YOU MAY HAVE MISSED (TYMHM)
YEAR ONE
YEAR TWO
YEAR THREE
YEAR FOUR
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OBOF YEAR FOUR INDEX
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OBOF TYMHM PART 14-01
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Jan. 02, 2014
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OBOF TYMHM PART 14-02
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Jan. 09, 2014
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Agenda
1. An explanation.
2. Thought for the day.
3. The Social Contract's come back.
4. Hot Air.
This is for light reading and a bit of a chuckle.
5. The year of great re-distribution.
6. A step to reduce reduce inequality.
7. Obama may be the best economic president
ever.
An Explanation.
My
posting last week was a mess due to some problems that have developed with my
internet explore. I have no control over
it and it will probably be that way for this posting too. I can tell until I get this transferred to
the Blog. At any rate, I think you can
read it and know what it is meaning.
Please hang in and maybe it will get better by next week. There are a number of people working on it.
Thought for the day.
Emerson said, that
"The only way to have a friend is to be one."
~~~
Social Security: The
Social Contract's Comeback Year?
Campaign
for America's Future / Op-Ed
Published: Tuesday 31 December 2013
Perhaps no program in this country reflects
the social contract more clearly than Social Security.
NOTE FROM
FLOYD:
This
article is long, but in my opinion, is good.
It may be pipe dreams, but the important point is that the movement is
there. Whether it develops to the
positive will only tell us in the future.
It is worth your time to read.
What a difference a
year makes. Last year at this time, a
president and a party who had just won an election with progressive rhetoric
were quickly pivoting toward a “Grand Bargain” which would cut Social Security
and Medicare. Leaders in both parties
were obsessed with deficits, and there was “bipartisan” consensus that these
“entitlements” needed to be cut. The only questions left to debate were when
they would be cut, and by how much. To
resist these moves was to be dismissed as “unserious” and “extreme” — in Washington
Today the forces of
corporate consensus are on the defensive. It’s considered politically reckless
to get too far out front on the subject of benefit cuts. Some of the think
tanks who advocated Austerity Lite one year ago are focused now on inequality. And, as the leaders of Third Way Washington
Social Security is a vital
program, but the implications of this shifting debate run even deeper, to the
future of the social contract itself.
Why Social Security?
For decades there has been
a concerted, well-funded effort to cut Social Security benefits. It has successfully co-opted prominent leaders
from both political parties, while recruiting lesser political figures like
Republican Alan Simpson and Democrat Erskine Bowles to serve as its pitchmen.
Social Security cutters
have held virtually unchallenged dominance in recent years, both in the
corridors of power and on the pages and airways of corporate-funded media. President
Obama and a number of key Democrats on the Hill allied themselves with this
effort. They distanced themselves only
at election time, when they obscured their positions with vague rhetoric. The
Republicans’ support for these efforts was virtually unanimous and often took
the form of a more generalized anti-government extremism.
As news stories later
confirmed, only concerted action by labor and other groups prevented the
president from pre-emptively offering Social Security cuts in his 2010 State of
the Union address. He finally offered them in his budget earlier this year in
the form of the “chained CPI.”
Why is Social Security
such a target? A number of government
programs embody our social contract. Medicare, Medicaid, welfare, food assistance –
each reflects the vision of a society which recognizes that its shared interests
are reflected in the safety and well-being of each of its members. But perhaps no program in this country
reflects the social contract more clearly than Social Security.
The name itself — “Social
Security” — has a timeless ring to it. It might have appeared in one of John
Locke’s notebooks. And it reflects a
universality in its design: Most living Americans have contributed to the
program, directly or indirectly. Most will collect benefits from it someday,
either when they reach retirement age or, in the case of disability, even
earlier.
The program was reduced
once before, at a time of genuine crisis. There is no such crisis today, and
its long-term imbalances are easily fixed in ways that would also allow for
increased benefits. But it has symbolic
value. If this program —
funded by its participants, financially self-supporting, and forbidden by law
from contributing to the national debt — can be cut, it means that no aspect of
the social contract is sacrosanct.
The Struggle
Social Security, like the
social contract ideal which spawned it, enjoyed a long period of growth and
evolution. The number of people it
covered kept increasing — Republicans boasted about that in their 1956 party
platform! — and its benefits were designed to keep pace with the cost of living
for its recipients. Nobody in mainstream
political thought would have dared to challenge it.
True, the social contract
always had its opponents. But for
decades they were marginalized by norms of political and social decency.
Right-wing radicals like billionaire H. L. Hunt might rave about tearing up
social programs, and democracy along with them, but they had no standing — not
in politics, and not in legitimate debate.
Then something happened —
or, rather, some things happened. Future Supreme Court Judge Lewis
Powell wrote a paper for some wealthy corporate interests in 1970 which
outlined a long-term strategy for bringing these radical ideologies of greed
back into the mainstream. Ronald Reagan put a smiling face — perhaps even a
smiley face — on these mean-spirited ideologies.
A new breed of Democrat
began to offer, not a defense of the social contract, but a “kinder, gentler”
plan for dismantlement. That approach
was first epitomized by the DLC (Democratic Leadership Council) faction which
helped elect Bill Clinton, and then by the Wall Street-funded (and
self-described “progressive”) ideas of groups like Third Way
The anti-Social Security
crowd claims the mantle of objectivity and rationality, but resorts instead to
deception and highly emotional arguments. Alan Simpson routinely erupts in rage at
anyone who disagrees with him, especially if they use actuarial data to make
their case. Social Security advocates are smeared as “irrational,” “extreme,”
and marginal, even as they marshal logic, information, and public opinion to
make their case.
And never underestimate
what a billion dollars can do. Billionaire hedge-funder Pete Peterson, a
hard-core right-winger from Richard Nixon’s cabinet, began a multi-decade
assault on the social contract in general, and Social Security in particular. He backed politicians, including Clinton
How much has Peterson
spent trying to tear up the social contract? He’s not saying. But we know that in one five-year period alone
he spent nearly half a billion dollars, and he’s been
pursuing this goal since the 1980s.
“Money doesn’t talk,” as
the young Bob Dylan so aptly put it, “it swears.”
The Fruits of Their Labors
But activists and experts
had been working diligently behind the scenes. At first the efforts were defensive, and focused
on preventing those cuts. But these individuals and groups eventually shifted
the terms of the debate from cuts to expansion. Policy experts like Jacob Hacker and Paul
Pierson began proposing benefit increases, both to offset increasing wealth
inequality and to shore up the nation’s rapidly decaying retirement system. Economist and blogger Duncan Black took up the
cause in op-eds. And a number of groups
went to work privately educating political leaders on the need to strengthen,
not weaken, Social Security.
The effort paid off. The idea of increasing Social Security
benefits had been marginalized as “extreme” in the media and in DC power
circles, despite being supported by most voters (including most Republicans).
No longer. As proof of that, Sen. Tom
Harkin of Iowa Ohio , Hawaii ’s two Senators, and Mark Begich from
conservative-leaning Alaska
Sen. Elizabeth Warren’s
recent endorsement of the idea added considerable momentum to the effort, and
sparked that ill-advised tirade from the leaders of Third Way
The momentum and the power
remains with the anti-Social Security crowd. But it’s a sign of change to see the idea of
increasing Social Security move into the mainstream debate. That’s striking progress, in the course of
only a single year. But it reflects an
ancient struggle over the existence and nature of the social contract.
Proxy War
Today the anti-”entitlement”
crowd is on the defensive. Its arguments are increasingly embedded in
wider ad hominem arguments against “leftism” or “economic populism.” The Third
Way
Keller, like most
self-described “centrists,” argue that it is reasonable and even “liberal” to
argue that public investments can only be funded at the cost of the nation’s
seniors and disabled. At the same time,
they argue that historically reasonable levels of taxation on the wealthy and
on corporations are politically “impractical.”
Theirs is a “kinder,
gentler” assault on the social contract, one which argues that it can only be
maintained at a reduced level — and that it can only be financed by further
damaging the economic security of the vast majority. Call it a “lateral Robin Hood” approach — take
from the unfortunate, and give to the even less-fortunate, but leave the
wealthy alone. That’s not liberalism, in
any sense of the term.
Dean Baker dispatched
Keller’s arguments rather neatly here. We, among others, responded to Third Way’s. But on a broader time scale, the debate isn’t
just a short-term argument about Social Security or economic policy. The assault on Social Security is a proxy war
on the social contract itself. Combatants like Keller probably don’t realize
that’s what they’re doing. They’re just
repeating what they’ve heard. But they’re waging a proxy war just the same.
Honoring the Contract
The social contract is an
ancient concept, which arguably began with Plato. Worrying about its well-being can seem absurd,
like worrying about the fate of entropy or the planetary crust. It seems unassailable, indestructible. But
either we’re a society or we’re not. An attack on any aspect of the social
contract, especially programs like Social Security, are an attack on the entire
fabric of an indivisible whole.
It’s been more than three
hundred years since John Locke published his Two Treatises on Government. The
social contract has continued to evolve since then. It was essential to the formation of this
country, and to our best modern moments of prosperity. But today it’s threatened by the forces of
globalized wealth.
That’s why the good news
of the past year is more than just a glimmer of hope. It’s been asymmetrical warfare between the
highly-financed advocates for the 1 Percent and the outgunned, underfunded
fighters for the majority. The shifting
debate about Social Security is one sign that the balance of power may be
shifting. There were others this year,
including the Moral Mondays protests in North
Carolina
Social Security, like the
social contract itself, is still in danger. Both need to be enlarged, not
reduced. But these setbacks for
corporate “centrism” show that change is possible, even against overwhelming
resources and odds. If the “economic populists” redouble their efforts, we may
someday look back on 2013 as the year the social contract began its big
comeback.
ABOUT Richard (RJ) Eskow
Richard (RJ) Eskow is a well-known blogger and writer, a former Wall Street
executive, an experienced consultant, and a former musician. He has experience in health insurance and
economics, occupational health, benefits, risk management, finance, and
information technology.
~~~
Hot Air
January A woman in a hot air balloon realized
she was lost. She lowered her altitude
and spotted a man in a boat below. She
shouted to him, "Excuse me, can you help me? I promised a friend I would meet him an hour
ago, but I don't know where I am."
The man consulted his portable GPS and replied,
"You're in a hot air balloon, approximately 30 feet above ground elevation
of 2,346 feet above sea level. You are
at 31 degrees, 14.97 minutes north latitude and 100 degrees, 49.09 minutes west
longitude.
She rolled her eyes and said, "You must be
a Democrat." "I am,"
replied the man. "How did you
know?" "Well," answered
the balloonist, "everything you told me is technically correct. But I have no idea what to do with your
information, and I'm still lost. Frankly,
you've not been much help to me.
"The man smiled and responded, "You
must be a Republican." "I am," replied the
balloonist. "How did you
know?"
"Well," said the man, "you don't
know where you are -- or where you are going. You've risen to where you are, due to a large
quantity of hot air. You made a promise
you have no idea how to keep, and you expect me to solve your problem.
You're in exactly the same position you were in
before we met, but somehow, now it's my fault."
So perfectly said -- Floyd. I have no idea who wrote this. It was on a Facebook page.
~~~
The Year of the Great Re-distribution.
Robert Reich
NationofChange / Op-Ed
Published: Sunday 5 January 2014
One of the worst epithets that can be leveled at a
politician these days is to call him a “redistributionist.” Yet 2013 marked one of the biggest
redistributions in recent American history. It was a re-distribution upward, from average
working people to the owners of America
The stock market
ended 2013 at an all-time high — giving stockholders their biggest annual gain
in almost two decades. Most Americans didn’t share in those gains,
however, because most people haven’t been able to save enough to invest in the
stock market. More than two-thirds of Americans live from paycheck
to paycheck.
Even if you include
the value of IRAs, most shares of stock are owned by the very wealthy. The richest 1 percent of Americans owns 35
percent of the value of American-owned shares. The richest 10
percent owns over 80 percent. So in the bull market of
2013, America
What does this have to do with redistribution? Some might argue the stock market is just a
giant casino. Since it’s owned mostly by
the wealthy, a rise in stock prices simply reflects a transfer of wealth from
some of the rich (who cashed in their shares too early) to others of the rich
(who bought shares early enough and held on to them long enough to reap the big
gains).
But this neglects the fact
that stock prices track corporate profits. The relationship isn’t exact, and
price-earnings ratios move up and down in the short term. Yet over the slightly longer term, share
prices do correlate with profits. And
2013 was a banner year for profits.
Where did those
profits come from? Here’s where
redistribution comes in. American corporations didn’t make most of their money
from increased sales (although their foreign sales did increase). They made their big bucks mostly by reducing
their costs — especially their biggest single cost: wages.
They push wages down
because most workers no longer have any bargaining power when it comes to
determining pay. The continuing high
rate of unemployment — including a record number of long-term jobless, and a
large number who have given up looking for work altogether — has allowed
employers to set the terms.
For years, the bargaining power of American workers has
also been eroding due to ever-more efficient means of outsourcing abroad, new
computer software that can replace almost any routine job, and an ongoing shift
of full-time to part-time and contract work. And unions have been decimated. In the 1950s, over a third of private-sector
workers were members of labor unions. Now, fewer than 7 percent are unionized.
All this helps
explain why corporate profits have been increasing throughout this recovery
(they grew over 18 percent in 2013 alone) while wages have been dropping. Corporate earnings now represent the largest share of the gross domestic
product — and wages the smallest share of GDP — than at any time
since records have been kept.
Hence, the Great Redistribution.
Some might say this doesn’t really amount to a
“redistribution” as we normally define that term, because government isn’t
redistributing anything. By this view,
the declining wages, higher profits, and the surging bull market simply reflect
the workings of the free market.
But this overlooks the fact that government sets the
rules of the game. Federal and state
budgets have been cut, for example — thereby reducing overall demand and
keeping unemployment higher than otherwise. Congress has repeatedly rejected tax
incentives designed to encourage more hiring. States have adopted
“right-to-work” laws that undercut unions. And so on.
If all this weren’t enough, the tax system is rigged in
favor of the owners of wealth, and against people whose income comes from
wages. Wealth is taxed at a lower rate
than labor. Among the biggest winners
are top executives and Wall Street traders whose year-end bonuses are tied to
the stock market, and hedge-fund and private-equity managers whose special
“carried interest” tax loophole allows their income to be treated as capital
gains. The wild bull market of 2013 has given them all fabulous after-tax
windfalls.
America has been redistributing upward for some time –
after all, “trickle-down” economics turned out to be trickle up — but we outdid
ourselves in 2013. At a time of record
inequality and decreasing mobility, America
~~~
A Step the Government Can Take To
Reduce Inequality
Nick Schwellenbach
Other
Words / Op-Ed
Published: Sunday 5 January 2014
Americans don’t like Big Business. And they don’t like government waste. Put the two together, and we have a nightmare
scenario: public money lining the pockets of corporate bigwigs.
Even as federal
government workers’ pay is repeatedly targeted for reductions and average
Americans’ wages have either stagnated or declined, the amount the
government pays to the executives of firms that live off of government
contracts has soared over the past 15 years.
Currently, federal government contractors can charge
taxpayers up to almost $1 million annually for each contractor employee’s
compensation. This is up from $250,000
in 1998 when it was set by law — this cap has increased at a pace that
regularly exceeds the rate of inflation.
Large corporate contractors — many of which subsist
almost entirely off of government largesse, mostly from the Pentagon — pay
their executives many times the amount they charge the government for
reimbursement, but the public still pays for their compensation because of
their high profit margins.
For instance, in just CEO
pay in 2012 alone, Lockheed Martin’s Robert Stevens made $27.5 million (82
percent of Lockheed Martin’s revenue is from government contracts), Northrop
Grumman’s Wesley Bush made $24.4 million (90 percent of the firm’s revenue is
from government contracts), and Huntington Ingalls’s C. Michael Petters made
$14.9 million (his company gets 100 percent of its revenue from government
contracts).
These enormous salaries
are possible because the profits military contractors get from government work
are huge.
Don’t take my word
for it. A 2012 study by two professors of financial management at
the Naval Postgraduate School
And why not at least reduce the amounts contractors can
charge for high-salaried employees?
A bipartisan group of senators and some members of the
House have legislation that would do just that. They’d like to reduce this amount to the vice
president’s salary, which is currently $230,700 with a narrow exemption for
scientists, engineers, and other specialists if a government agency believes
higher salaries are necessary to ensure access to individuals with specialized
skills. As recently as 2012, President
Barack Obama endorsed an even lower cap.
The potential
savings aren’t chump change. Demos, a
research group, estimated that a cap of $230,700 could lead to annual savings of around $7 billion. There are lots of better things this money
could be used for than lining CEO’s pockets. It could pay for education, infrastructure
investment, or scientific research that could help rebuild a vibrant
middle-class and an economy that lifts people out of poverty.
The new budget deal brokered by Sen. Patty Murray (D-WA)
and Rep. Paul Ryan (R-WI) wouldn’t go as far as the other plan, but it would
nearly halve the compensation cap to $487,000, which is roughly what the
subsidy cap would be if it had only kept pace with inflation since 1998. This
is a step in the right direction, but clearly more could be done.
As to be expected, the high-powered lobbyists of these
contractors have fought these common-sense reforms with their usual
misinformation. After all, they get paid
big bucks to keep the money spigot open and flowing.
Yet the status quo
is clearly out of whack and something needs to change. As Obama stated in his recent income inequality speech, “government
can’t stand on the sidelines in our efforts” to create a more equal society.
Excessive CEO
compensation is one of the factors making inequality worse — in 2012, the
average CEO-to-worker pay ratio at companies in
the S&P 500 was 354-to-1. Government contracting policies should be bucking
this trend not making income inequality worse.
ABOUT Nick Schwellenbach
Nick Schwellenbach is a senior fiscal
policy analyst at the Center for Effective Government. ForEffectiveGov.org
~~~
Obama May Be Best Economic
President Ever
Froma Harrop
NationofChange
/ Op-Ed
Published: Tuesday 31 December 2013
Lend me your ears. I have come to praise President Obama and bury
the myth that Republican presidents are better for the economy than Democratic
presidents. Not only do Democrats
produce superior economic results but they blow Republicans out of the water in
the comparisons.
Let's turn the mic over to Bob Deitrick, a principal at
Polaris Financial Partners in Westerville ,
Ohio
He put his extraordinary findings in a book, "Bulls,
Bears, and the Ballot Box."
Because President Obama was in office for only three
years at the time of the writing, Deitrick and his co-author left him out. But Deitrick now has enough of an Obama track
record to have recently declared in a Forbes interview, "By all measures,
President Obama has outperformed every modern president."
His
findings were so lopsided in favor of Democrats I had to ask him whether he is
one. He said no. "I really was political
until 2000," the start of the George W. Bush era. That's when he saw massive mismanagement of
the economy at the expense of his middle- to upper-middle-class clients.
"The average retail
investor got slammed, where hedge funds were allowed to take advantage of
everyone else," he told me.
The best overall economic performance pre-Obama was that
of John F. Kennedy and Lyndon Johnson (whom Deitrick put together because of
Kennedy's early death). No. 2 was Bill
Clinton, with Franklin D. Roosevelt in third place.
The top six included two Republicans. Dwight Eisenhower
ranked fourth, and Ronald Reagan sixth, edged out of fifth place by Harry
Truman.
Were it not for Herbert
Hoover, George W. would have ended up last.
Reagan was a "stimulus addict," in Deitrick's
view.
His economic growth came through massive spending on
defense and deep tax cuts. The price was a tripling of the
national debt.
Ordinary Americans did better under Clinton, who also
left behind a budget surplus. Thanks to a growing economy and higher taxes
on the rich, Obama has lowered the deficit to 4 percent of gross domestic
product, down from over 10 percent at the end of the Bush years.
Here's an interesting calculation: Suppose that in 1929,
you put $100,000 in a 401(k) fully invested in stocks. Under the 40 years of Republican presidents,
you would have ended up with only $126,000. Under the Democrats, you would have
amassed a retirement nest egg of $3.9 million! (All numbers are adjusted for inflation.)
If you added Obama, the Democrats' number would be much
bigger.
Deitrick believes that presidents largely control the
economy — through the bully pulpit and the power to appoint leaders, enact
executive orders and issue vetoes. (Not
everyone agrees they hold most economic cards.)
Deitrick is a disciple of Marriner Eccles, the rich
Republican banker, whom Roosevelt named
Federal Reserve chairman. Eccles held
that putting more money in middle-class hands is the key to recovery and that
trickledown economics helps mainly those providing the trickle.
Speaking of income inequality, the gap between the top 1
percent and bottom 99 percent widened 20 percent in the 40 years Republicans
ran the Oval Office. In the Democratic
presidential years, it narrowed 16 percent.
Obama's greatest successes, Deitrick says, are the auto
rescue plan and, the Wall Street reforms, which revived faith among investors. The annual compound return on stocks has
averaged between 25 and 30 percent (depending on the index) since the lows of
March 2009.
Deitrick says he's perpetually shocked that Democrats
don't trumpet their economic triumphs. You don't have to be a Democrat to wonder why.
~~~
If the good Lord is willing and the creek don't rise, I'll try to talk with
you again next Wednesday, January 15, 2014.
God Bless You All
&
God Bless the United States of America
Floyd
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