Friday, July 29, 2011

Something to Cry About

Noted crybaby and speaker of the House John "Boner" Boehner has a lot to cry about these days. He twisted enough arms to get his version of the debt ceiling increase passed, but the Senate immediately scuttled it. Harry Reid hopes to get an alternative measure approved by the Senate, but what are the odds of a Democratic-leaning bill ever getting through the House?

The really sad aspect to this is that Boner alienated many of his colleagues on the Tea-Party  lunatic fringe in order to muscle his bill through. Many of them are dead-set against compromise of any kind. With religious-style fervor, they believe that any compromise with Democrats is tantamount to cutting a deal with the Devil himself.

Aside from the pressing issue of keeping the federal government solvent, my major concern has got to be the apparent breakdown of representative democracy (insofar as we have known it in theory). The growing ideological polarization threatens whatever shreds of democracy are left in our political system. The spectacle of our elected officicals stampeding over a cliff like lemmings will certainly create a backlash that results in the further centralization of power. People hate indecisiveness and stalemate more than dictatorial excess. Benito Mussolini was swept into power in a fascist wave in Italy for just this reason.

The American system does not accommodate splinter groups as well as a parliamentary-type system. We have survived this far because both major parties have generally been cut from the same cloth, more or less. Extremist factions in both parties have often expressed disgust with this fact, but could do little about it until now.

Parlimentary systems tend to accomodate a wide range of political viewpoints, and manage to share enough power to prevent unrest. Whatever it's root causes, the rise of Tea Pary extremism spells trouble for our system. Perhaps the last election was an aberration, and the pendulum will swing back toward the center next time around. If not, this could mean trouble.

Already there are calls for Obama to simply flip off congress and raise the debt ceiling by executive order. Another idea being floated is to form a "super congress", trusted and controlled by current house and senate leaders, who would debate and approve legislation that the main congressional bodies would only have yes/no votes on. There would be no debate or amendments allowed outside of the "super congress". It seems incredible that this could pass constitutional muster with the Supreme Court, but anything is possible these days. Fascism may be closer than one might think. These trends may not be random events; creeping fascism may fit right into certain agendas within the PTB.

At least the "trains will run on time", you think?


Monday, July 25, 2011

The Federal Debt Drama

There are no good guys to root for in this fight. I tend to take a non-partisan stand by calling both sides evil. And, as demonstrated in the recently concluded Minnesota budget battle, deep ideological polarization makes middle ground a very dangerous place to stand.

Oh, sure - it's easy to vilify John Boner for fighting passionately for such tax perks as deductions for private jets and huge tax breaks to corporations in agribusiness. Boner musters the same evangelical fervor with which he successfully defended Bush's tax giveaways to the rich.

As always, I ask this question of the Republicans: Why is borrowing better than taxation? Why does capping the debt get portrayed as a rather admirable idea, but if it comes down to it, the rich shall have their cake no matter what?

The Dems might play nicer theme music, but under the facade it's the same old ruse. Sure, Clinton balanced the budget, but presided over the inflated 90's bubble economy that had to burst sooner or later. Now they agree with Republican rhetoric that the spiraling debt must be reined in, but a similar question needs to be asked of them; is borrowing better than cutting their favorite pet programs? (Of course, pork spending is popular with both parties)

What neither side tells us is the truth - that the Federal Reserve is not a government agency, but a private bank.  The debt we are incurring is not "owed to ourselves" but puts us in hock with some really powerful players. Who are they? We don't know, but who on earth has more money than God, who can keep the money spigot flowing every time Congress raises the debt ceiling? It seems reasonable to conclude that these super Banksters must have something in common with the shadowy Powers-That-Be that rules the world. We are likely in deep debt to some sinister forces.

Another truth we are not told is that borrowing from the banksters is not necessary - The US Treasury has authorization under the constitution to print money. Alas and alack, the last time this was tried resulted in the white house occupant having his brains blown out by high powered rifles. No subsequent leader has shown any desire to follow in those footsteps.

Still another painful truth must be told: The shadow of the 2nd Great Depression is falling upon us, and the federal government has shot its anti-recessionary wad with little to show for it. Four trillion has been added to the national debt, which probably could have paid off every mortgage in the country. Where did it go? More importantly, what is left to combat the seemingly inevitable double-dip? During Act I of the new depression, unemployment benefits kept many going and shored up consumer spending. Now, with many exhausting their benefits, and social programs on the debt reduction chopping block, we face the possibility of Act II playing out with grim scenarios of homelessness and hunger fueling enormous social instabilities. The dreaded double dip could arrive like a tsunami with little or no cushion remaining.

Of course, much of the deficit cutting could fall on the bloated military budget, and this country could reconsider its role as Evil Empire enforcer of the world. A tax on Wall Street operations and Bankster profits would provide a significant increase in revenue, but of course, our congress -talking both parties now- are bought, paid for and owned by those very same Banksters. Therefore this does not seem like a plausible possibility.

I recently spotted a bumper sticker that says it all: "Politicians should dress like NASCAR drivers - At least then we would know who owns them".


Sunday, July 10, 2011

Political Polarization

The bad guys?

The stalemate in Minnesota behind the state government shutdown is regrettable, but fascinating to analyze.

As Macalester College president Brian Rosenberg put it in a StarTrib op-ed, Governer Dayton has done an admirable job of negotiating with himself. He has retreated significantly from his opening positions, hoping to elicit some reciprocal response from the Republicans. Thus far they have adamantly refused any compromise.

From the standpoint of someone who leans "progressive" like myself, it would nominally appear that Koch, Zellers & the rightwing gang represent the evil bad guys, and that our dear embattled governor is simply fighting for the welfare of the most vulnerable citizens. However, this simplistic analysis may not hold together under examination.

The core conservatives in the Republican caucus exhibit religious zeal with their take-no-prisoners stance on revenue increase. For them to compromise would be tantamount to being assimilated by the Borg. Koch and Zellers are under tremendous pressure to find a solution to the stalemate, but must fear the wrath of their rabid colleagues if they weaken. Plus, they know how to count the votes needed to pass a compromise budget.

I'm no fan of Republican philosophy, but there are forces behind the strident anti-tax hysteria that should be looked at. For the past several decades, there has been an upward trend in the level of state and local taxation. The sales tax was originally introduced at a microscopic percentage, with promises that it wouldn't rise. Many will remember the mileposts that it passed - 3, 4, then 5, then 6% - on the way to the present 7.275% in Hennepin County (we get to pay for the Twins stadium without voting on it!).

I'm certain that the "Minnesota Miracle" has done lots of good, and the taxes we pay go for services that many wouldn't want to lose. However, the inexorable trend of growth leads inquiring minds to wonder if there is a limit before the tax rate hits 100%.

Ostensibly, we are governed under a democratic system. In theory, the level of public spending and taxation should reflect the will of the voters. If the majority enjoy the good life in Minnesota, and can see how their tax money is spent beneficially, then a consensus should be easy to reach.

In practice, the growth in cynicism and political polarization make consensus building far more difficult. Budgetary issues are complex and few understand where the money goes. The sense of distrust and disempowerment grows until it solidifies into something as rigid as the "Taxpayer's Pledge" that binds the core faithful to vote against tax increase in any form.

To his discredit, Governor Dayton has inflamed passions by insisting on a "class warfare" approach that makes tax increases on the wealthy a central part of his message. Skilled leadership and a more appropriate message may have had a chance at successful compromise, but that was not in the cards.

Dayton may have painted himself in to a corner from which no compromise can emerge. Perhaps this was by design, based on shrewd calculation that public opinon will rise up against the Republican leadership and hammer them in the next election. If this turns out to have been the strategy, then the "evil" moniker will need to be spread beyond the Republicans to include the governor's office.

It may be that Dayton's only realistic course at this point is to cave completely and then announce to the state that responsibility for the harsh budget rests on the Republicans. If voters disapprove, they can take vent their angst in the next election. A new legistlature will be elected in 2012, but the governor's term runs until 2014.

We can't forget that this dispute takes place in the midst of a deepening depression, and things could get worse before it's over. What happens if projected revenues fall short of even the Republican budget? Somehow the gap between revenues and public need must be addressed in more creative ways than either party has thus far demonstrated.

The ideological divide that separates Governor Dayton from his 2010 Republican opponent Tom Emmer is vast, and indicative of the deepening partisan rift. Dayton only won by the slimmest of margins. If this is a trend that continues in the future, then it could signal an eventual breakdown in our system of governance. The meme of revolution is circulating within global consciousness. Is the present ideological divide a taste of what is to come? Watch a similar drama play out on the federal level, and Stay Tuned.


Saturday, July 9, 2011

The Summer of Our Discontent

News item: June unemployment statistics released, showing that job creation virtually stalled. If not for the convenient elimination from calculation of long-term "losers" whose unemployment benefits have run out, the unemployment rate would be substantially higher than the official 9.2%. As it is, this figure caused a momentary buzz in Washington, causing Obama to cancel a vacation so he could make a public statement. Essentially his message was "don't worry, better days just around the corner" a la President Hoover circa 1930.

So what do we expect the big guy to do about it? With trillions in stimulus already spent, and budget cutting rhetoric heating up, there isn't much ammunition left - at least within the traditional paradigm. Welcome to the depression.

As I've railed upon many times before, the partisan divide is getting deeper, while neither side addresses the problems truthfully or realistically. One realistic solution to intractable debt is to essentially default through inflation, a fix that already may be quietly underway. Unfortunately, we have Chinese, Russians and other major nations having invested their savings deeply in dollars, who are likely to object. If they bail from the dollar en masse, the precipitous rise in import costs will drive another stake or two into the American economic corpse.

One factor keeping the dollar on life support is the exceptional weakness of the Euro, which is haunted by the specter of the "PIIGS" nations ongoing flirtation with default. Still, when outright default occurs. perhaps beginning with Greece and Portugal, the resulting tsunami may swamp the dollar and the rest of the global system.

Here in Minnesota, we have more the the same partisan polarization, this time resulting in actual shutdown of government. It's hard to believe that positions are so hardened that they would let this happen over less than 2 billion out of a 36 billion dollar budget. The Republicans exhibit religious fervor with their "no new taxes" mantra, while the Governor seems bent on poking the opposition in the eye with a class warfare zeal to "soak the rich". Why not simply split the difference and get on with it??

Shame on them all! Shame on them for proposing more gimmicky accounting shifts that already have caused one bond rating agency to downgrade the state's credit rating. School districts are already in hock by several billion from the last shifts. Again I ask the Republicans, why is borrowing better than taxation? They preach living within our means, but this is not what that entails.

Of course the Repubs are correct to question the enormous rate of growth in the state budget, but let them speak openly of where the money is going and who gets hurt if they arbitrarily slash it back. Most of the increase is in social services and health care, but we are in the midst of a DEPRESSION and have an aging population to contend with. There are major public policy decisions to be made in dealing with these trends, but this should be done in open debate. If the answer is to put poor people out in the street and watch idly as "Hoovervilles" spring up once again, then at least get a consensus from the voters. The results will be ugly, and do we really wish to travel down that road?

Of course poll respondents say "cut the budget" when the question is framed in terms of an impersonal. bloated bureaucracy consuming an ever increasing portion of our earnings. Somehow "they" are spending too much of "our" money, but when it's your own parents affected by cuts in nursing home care, or your children facing curtailed opportunities in school, then it takes on a more personal dimension.

The tragedy is that all of the bailout and stimulus spending was blown without much impact to the average citizen. I saw a statistic somewhere that claimed that the trillions spent on bailout of the Banksters could have paid off every distressed mortgage.  Imagine the foreclosure problem instantly resolved! Imagine the difference if the average Joe had access to that kind of assistance. But then that is dreaming; in reality the Banksters Rule while the rest of us Drool.