Sunday, October 26, 2008

John McCain, Supply-Side Economics, and Complete Idiocy

For years we have heard the Republican mantra of "Trickle-down" economics now commonly known as "Supply-side" economics and it continues to sound just as idiotic today as it did when Reagan first proposed it. The idea that giving tax breaks to suppliers instead of consumers will stimulate the economy and promote job growth flies in the face of common-sense economics. Demand always drives supply get that backwards and the economy collapses and jobs evaporate.

The housing industry collapsed because of interest-only adjustable rate loans but people defaulted on those loans because their homes did not appreciate like they thought they would. And why didn't those homes continue to appreciate? Because builders built more homes then there was a demand for. Investors and speculators began buying five, ten, fifteen, homes at a time, artificially inflating the price of homes by reselling them at a higher price and builders mistakenly believed that there were real families buying these homes so they built more But soon the investors were buying more homes than they could sell. The builders kept building and soon the market was flooded and there were more homes on the market then there was a demand for. Much more. In Las Vegas alone the number of resales on the market went from 1,400 homes to 26,000. Supply outstripped demand,home values plummeted, no one could refinance their loans before they were scheduled to adjust, so they began to default on their loans which drove home values down further as banks tried to discount these foreclosures in order to get them to sell. The rest is history. The entire economy collapsed. Still, there are idiots who don't get it. There are people who still don't see that without people buying things those who sell things will go broke no matter how many tax breaks they get.

John McCain believes that if we lower the business tax and the capital gains tax, it would make businesses more profitable and create more jobs. Now how would that work? I've been in the building industry for more than a decade and I can tell you that I have never heard of anyone hiring more workers because of lower taxes. You hire more people because of increased demand for your products and services. You wouldn't just hire guys to stand around doing nothing no matter how profitable you were. Even if you paid zero taxes that would just be an idiotic business practice. On the flip-side you would hire more people if demand increased no matter how high your taxes were. In fact, I have never, in my entire working career spanning more than 25 years, heard of anyone laying off workers because of high taxes. It just doesn't happen. People get laid off when products and services stop selling and products and services really stop selling when consumers have no money to purchase them. That's why supply-side economics is so mind-numbingly stupid. If you want to boost the economy you put more money into the hands of the consumer and that will inevitably end up in the hands of suppliers as the consumers go out and spend their money. You can cut all the taxes you want on corporations but if no one buys their products or services, because they just don't have the money to do so, that corporation will still be laying people off and eventually going under.

Now let's look at another claim John McCain has made about the reasoning behind his tax policies. He believes that cutting taxes on companies that ship jobs overseas will somehow woo them back to America. Because surely it's the lower taxes luring them to China and India and Mexico and not the cheap dollar-a-day labor. Come on Republicans, tell me you don't really believe this nonsense. Tell me that you just don't really care about the economy and its abortion and gay marriage that makes you want to vote for John McCain. Just don't tell me that you actually believe this idiotic notion that lower taxes will keep jobs in America. Do you realize that there are companies that raise chickens in America, freeze them, ship them to China to be cut up and then ship them back to America. Do you think they do that to avoid those high American taxes? The labor over there is so cheap that it is actually cost effective for them to ship meat over there to be cut up and then ship it back into this country and pay import taxes.

You know what would keep jobs in America? Taxing the living hell out of any company that moves their headquarters overseas. Since the Bush tax cuts went into effect have more companies relocated to America? No. Have companies that had moved overseas during the Clinton administration moved back to America? That answer would again be no. Have less companies moved overseas thanks to the Bush tax cuts then when their taxes were higher under Clinton? Once again, that answer is negative. So why do you think it would be different under McCain? Once again, republicans are doing the same things and expecting a different result. This is not the definition of insanity. It is the definition of stupidity.

Give tax breaks to Americans who make less than $250,000 so that they can afford to buy more stuff and you will see an immediate impact on the economy. If you are making more than $250,000 a year I seriously doubt that your lifestyle will be significantly impacted if your taxes go up a bit. You'll still buy just as much shit as you did before the election. And here's the other thing that should be fairly obvious, tax the living fuck out of any American company that ships jobs overseas, denounce them publicly and drive their asses into bankruptcy. Make examples of them. If the president of the United States were to declare that any company that shipped their jobs oversease was a traitor to the United States of America how eager do you think Ford would be to open a new factury in Korea? On the other hand, if we were to give them huge tax breaks after they closed a factory in Detroit and reopened it in Beijing, do you really think that would send the message that Americans were not going to tolerate companies that export jobs? I don't think so.

Tuesday, October 21, 2008

Tomorrow

I have, at long last, discovered the meaning of life. It is not anything as lofty or poetic as living to do the will of some omnipotent deity or to go to paradise after you die. It is not as ideological as living for the betterment of humanity or to build an enduring legacy. It is very simple, very basic, and true of all of us but I will try my best to make it sound poetic and grandiose.

I have often said that we must strive to find the meaning of life because existence demands a toll from us in blood, sweat, and tears, stress and anxiety, sorrow and pain, and therefore we must ask the value of that which we suffer so dearly to maintain. It must be valuable enough to justify all the distress, fear, anxiety, and dissapointment we suffer in order to continue inhaling and exhaling day after day and year after year, struggling to acquire the commodities of existence. I have said this and because of these statements I have exhausted myself in search of some grand prize when all along the answer lay within me. All I had to do was imagine killing myself and think of the very reasons that I resist the notion, the same reasons that we all resist self destruction. Curiosity. Hope. We all want to see tomorrow out of sheer curiosity and hope for a better tomorrow. We are gamblers betting that the next hand will be the jackpot. It is the mystery of what tomorrow may bring that motivates us to keep moving forward. Why do we live? The answer is simple. To see another day. To see tomorrow.

When you imagine terminating your existence you think about how you will miss your friends or your family and how you won't see your kids grow up or your grandkids be born or the results of all your efforts or how the world will change and move on without you. You don't do it because tomorrow might be better than today. Religion fulfills this by giving you hope that there might be other tomorrows in the afterlife. But where there is no curiosity the will to live is defeated. Certainty is the cause of all suicide.

That seems like an extreme statement but look at it objectively. From religious martyrs to the clinically depressed to the hero who lays down his life for his country, without certainty they would find themselves unable to defeat the will to live which, as I have stated, is little more than curiosity about and hope for tomorrow. The suicide believes that tomorrow will be the same or worse than today. They are certain that their pain will never end. That they will never find happiness. There is no curiosity or hope. There is certainty that life is hopeless. The religious martyr is certain of heaven. He is certain that he will enter paradise, spend eternity with God, get his 72 virgins. The hero who faces death without fear is certain that his story will be told. He is certain that his legend will endure or that he too will go to heaven. He is certain that without his sacrifice the war would be lost and his loved ones would suffer. True, many heroes die in battle without martyring themselves and they are no less heroes but I am not talking about those who expect to survive and die fighting for their last breath. I am talking about those who willing throw themselves on the grenade certain that their sacrifice will not be in vain.

I, like all of you, wake up every day hoping for a better day and often fearful that the day will be worse, but as long as there is hope that the day will be better, that the future will be brighter, I have to keep going. I want to write the next book and see if this will be the one that wins awards and becomes a bestseller. I want to see if I ever attain that spark of entrepeneurial genius that will make me independently wealthy. I want to see if my son and my daughters will grow up to be happy, healthy, and successful. I want to see the culmination of all of my efforts. I want to live to see new scientific discoveries and the advancement of technology. I want to see how far society progresses, if we solve global warming, world hunger, world peace, renewable energy. I want to hear the new music trends, see the new fashion trends. Hell, I want to see who wins the next big prize-fight. I want to see tomorrow and that's the reason I suffer and struggle through vexations and dissapointments and boredom and pain to see the sun rise each morning. That's why we all live, for that one simple reason, to see tomorrow.

Wednesday, October 08, 2008

What Barack Obama Should Say To America

When I was a kid in junior high school and first discovered that I had a talent for writing, one of my dreams was to be a political speech writer. I gave up on that dream and instead I write novels among other things. Still, I could not help wishing I was writing Obama's speeches. There is so much more he could be saying to put McCain into proper perspective for Americans and truly show how Obama could benefit this country.

I am not your typical political analyst. I am not even your typical American. I am just a guy with a blog who, as a taxpayer and an American who will be retiring from the workforce in twenty years, with a nephew serving in Iraq, a son who will be going off to college in four years, and two daughters who will be inheriting the outrageous federal deficit this administration has created, has a profound interest in how this election turns out. I listen to my fellow Americans everyday and so I feel I am qualified to say a few things about what Obama should be saying in these debates to reach more Americans and widen his increasing lead in the polls. Not to put words in the man's mouth but the first thing he needs to do is make the differences between his proposed policy changes and McCain's crystal clear. Obama has done more of this in the last debate but he needs to really hammer it home. What follows is an idealized debate between McCain and Obama.

McCain: "Under my Economic Resurgence plan, I would order the Secretary of the Treasury to set aside 350 million dollars to buy up all those adjustable rate mortgages and renegotiate them at the current market value of each home, forgiving the differences in value and absorbing the loss. That would stop the bleeding at its source which is the housing industry, stabilize the economy, and allow millions of Americans to stay in their homes."

Obama: "John, that is an extremely generous plan. But with a multi-trillion dollar deficit and a billion dollar a month war increasing that deficit every day, I'm just not as convinced as you that we can afford to be so generous. That's why I have a plan that would not make Americans, many of whom cannot and never will be able to afford homes or who did not get caught up in this economic mess, foot the bill for this housing crisis. My plan, would be to set up a National Mortgage Company, similar to the one Roosevelt set up during the Great Depression, and allow homeowners to refinance their homes and get out of these interest-only and adjustable rate loans into government backed low-interest 30-year fixed-rate mortgages. These mortgages would still be at their existing loan amount. There would be no lowering of the loan amount with the taxpayers absorbing the loss of equity. These new loans, however, would not adjust and increase their loan payments and with a lower interest rate, and I propose offering everyone 5% interest, their mortgage payments would decrease so that they can stay in their homes and pay off their mortgages and the government would make back its investment rather than assume another loss that would bail out Wall Street and these predatory lenders at the expense of the American taxpayer.

That would be a great start but even that alone would not solve the crisis that the Bush administration has dragged us into. We need to spend 100 billion on a "New Deal" program to put all of those out of work construction workers back to work building roads and bridges so that they have renewed buying power which will allow them to reinvest in our economy by purchasing goods and services. This increased purchasing power will increase retail spending and allow businesses to expand due to increased demand for these products and services putting even more people back to work. Not supply side economics but demand side economics. See, just like we all learned back in high school, demand must push supply, not the other way around. Giving more money to suppliers is not the way to build the economy. It is the consumers who need help and when they have the money to start buying again that's when the economy will prosper once more."

McCain: "My opponent still will not admit that the Surge in Iraq has worked when he predicted it would not. He predicted that it would increase sectarian violence when in fact violence has decreased. My fellow Americans, I do plan to bring our troops home. The difference is that I plan to bring them home with honor and victory and my opponent would bring them home in defeat."

Obama: "John, when you talk about victory, it makes me wonder if you have been paying attention the last six years. We are spending billions of dollars a month in a war that America should have never been involved in and losing thousands of American lives. This war has bankrupted America. Your war is exactly what men like Bin Laden wanted. It has crippled this country. You have accomplished the Taliban's goal by drawing us into a senseless war and dragging it out for six years. Look at America before the war and look at it now and you tell me who's winning, John. I think your passion for war and victory is clouding your judgement here. Whether the Surge is working is not the issue, the issue is should we be there at all. The issue is that your war has strengthened the Taliban and weakened America. The issue is that your war has cost more than 4,000 American lives. The issue is that while we have been fighting a senseless war in Iraq, who never attacked America, we have been losing the war in Afghanistan, we have let Bin Laden slip from our grasps. If that's what you call military success, then I don't think the American people can afford your brand of victory."

MCain: "I have served my country honorably as a soldier in the United States Armed Forces and veterans know that they can count on me to take care of them and look out for their interests."

Obama: "Do they know that you have one of the worst voting records in the US senate when it comes to veteran affairs? That you have not supported bills that would have increased spending for veteran health care and education? That you were given a "D" by the nonpartisan veterans’ group The Iraq and Afghanistan Veterans of America (IAVA’s) Action Fund as part of its congressional report card? I myself received a “B” from the group which I am not proud of and vow to bring up to an "A" but McCain is among just three senators who scored a “D.” Only one senator, Jim DeMint (R-S.C.), received a lower score than McCain scoring an “F.” Is that what you call looking out for our veterans?"

McCain: " I have a plan to give a $5,000 tax credit to every American and allow them to go out and purchase their own health Insurance."

Obama: "What John McCain is not telling you about his health plan is that he would put a tax on people who currently have employer health care in order to subsidize it. With the average cost of healthcare at $12,000 a year, giving each American a $5,000 tax credit will still not bring health coverage within reach of many Americans. His plan to privatize health care would mean that each one of you would be out there on your own fighting against the health insurance companies rather than having your employers to back you. You would see your co-payments and premiums go up and the coverage you receive would decrease because there would be no one to regulate these companies. Letting insurance companies operate across state lines would mean that companies would move to states with the very least amount of regulations so that they could avoid accountability. As McCain himself has said, his health care plan would do for health care what he has done for the economy. Is that what you want? My plan would allow those who are happy with their existing health care programs to keep them and those without health care would be able to get the same type of health care as members of congress.

Look, one of the biggest drains on the health care system is people without health care who are not able to afford preventive care and so they don't go to the hospital until they are extremely ill and the price of treating them is much greater. And we are paying the bill for this emergency care right now. My system would allow them to receive medicine and treatment that would keep them out of the emergency rooms for things like colds and toothaches and keep medical costs down. The choice is clear. John McCain's system would increase the costs of health care for everyone and my plan would decrease costs for everyone."

McCain: "Obama wants to increase the size of government and raise your taxes. his record is clear. he has voted for tax increases 94 times."

Obama: "That's just nonsense. By that way of looking at things, you yourself John have voted for tax increases 477 times throughout your career."

McCain: "I believe that life begins at conception while my opponent is for abortion rights."

Obama: "Since neither of us have ever been pregnant, I think that we are the last people who should be making decisions on what women should do in that circumstance. Now, I am personally not in favor of abortion and would do everything in my power to make sure women had other options. First by increasing abstinence and birth control education for our teenagers because history has shown that abstinence education alone does not work. Secondly, I would make parental classes and health care programs and assistance for unwed and underprivileged mothers a priority under my administration. But I will not overturn Roe V. Wade. I think that would be a mistake."

McCain: "Obama opposed offshore drilling while I am in favor of it. I think that the only way to bring down the cost of oil and cut our reliance on foreign Middle-Eastern oil is to increase domestic oil supplies by lifting the moratorium on offshore drilling."

Obama: "America is one of the largest consumers of oil in the world. We consume 25% of the World's oil while we posses only 3%. Even if we drilled for every last drop of American oil we would not put a dent in the price of oil for at least ten years and we would still be dependent on foreign oil for 90% of our oil. The only way to decrease our dependence on foreign oil is to decrease consumption. We must have more efficient homes and cars.

I propose mandating that all cars must have 50 miles per gallon fuel efficiency by 2013 and 75 miles per gallon by 2020. New homes must exceed the model energy code by 50% by 2013 and I would give a tax credit to homeowners and businesses for switching to energy efficient appliances and renewable energies to heat and cool their homes and businesses including solar energy. I would also create a federal program on the scale of the Manhattan Project to come up with a renewable source of energy to end our reliance on fossil fuels once and for all. McCain's plan of trying to drill our way out of this is less than a Band Aid it is just letting the wound continue to bleed."

I know, I put some of my own ideas in their along with Obama's but only because I think they are ideas that Obama is going to need to adopt in order to hold off McCain. It will not be enough for him to point out the problems with McCain's Economic Resurgence Plan. He needs to propose his own, in clear simple terms that Americans can understand. He needs to hammer McCain on health care and off-shore drilling and he needs to attack John McCain at his heart by pointing out his poor voting record on veteran's rights. If Obama does all of that, I have no doubt that he will be our next president because it is definitely time for a change.