Defense spending - The Public Must Lead the Politicians

In the aftermath of the election Washington has settled into the same partisan gridlock that marked the last couple years.  The relative power of Democrats and Republicans has shifted, Democrats may push through some modest tax increases on rich folks but likely without really addressing the problem that created our fiscal imbalance.  

The fundemental  problem is defense spending.  The deficit exists because we spend enormous amounts of money on defense but are not willing to impose the taxes to pay for it.  

Republican's caused the problem with tax cuts coupled with increases in defense spending by both President Reagan and President Bush II.  The economy blowing up after the Bush II years was just the icing on the cake.  

But Democrats are afraid to confront the problem.  They fear being painted as weak on defense, so in fact often go meekly along with increases in defense spending.  

Democrats need to suck it up and start engaging the public on what purpose our massive defense spending serves.  We spend, per taxpayer, 4 to 5 times more on defense than taxpayers of any country other than Isreal and a couple of tiny belligerent dictatorships in the third world.  It is not because we live in a dangerous neighborhood (like Isreal), most of those we perceive to be potential enemies are half a world away.  Much of our defense spending is on maintaining the ability to fight two wars on the other side of the world.  Why do we need the capability to fight wars on the other side of the world?  To protect our economic interests around the world.  We aren't the worlds cop, we don't step in when genocide is going on, we step in when our economic interests are threatened.

Osama Bin Ladin didn't send terrorists to bomb a synagogue or a church, he went after the World Trade Center as his primary target, and the Pentagon as his secondary target.  The building that represents our economic interests around the world and the brain of the military that protects those interests.

I don't really have a problem with us having overwhelming military superiority, I do have a problem paying extra to protect private investments around the world, when the wealthy folk that own those investments and are making lots of money have been paying less and less to support our defense spending even as our spending increased.

The Democrats need to ask themselves, would the average voting taxpayer, if he/she understood who was financing our military and who was benefiting, really have a problem with someone standing up to talk about the folks that benefit from our military paying a fair share for that benefit?  

But this is an issue, like gay marriage, serious career politicians won't touch with a 10 foot pole.  Two many vested interests with the money and lawyers to bury their political careers.  

If we want to really solve the deficit the public needs to lead the politicians into serious discussion about what we want our Military to do and who should pay for it.

Reforming Proposition 13

I voted for Proposition 13, the ballot measure in 1978 that completely restructured California's tax laws.  In the decade + leading up to 1978 property values had been shooting up, so property taxes had also been rising rapidly threatening some peoples ability to continue to own their home, and the legislature had been frozen in partisan gridlock.  Conservative Republicans alarmed over the growth of government had evolved toward a philosophy summarized in the phrase "starve the beast" and Prop 13 seems to have been developed with that philosophy.

Prop 13 was sold as saving peoples homes, but the people that drafted it had a much larger agenda.  They inserted a little noticed clause that required a 2/3 vote to authorize almost any new tax, or increase an existing tax.  That clause has crippled California's ability to finance needed infrastructure.  The University system that was at that time widely considered the model for the world, the system that provided top quality, inexpensive education to the State residents, has morphed into a system that leaves students without well to do parents so indebted upon graduation they risk being financially crippled for life.  Our roads, bridges and freeways have deteriorated to the point we lose billions of dollars a year in lost productivity, and damage to our vehicles.

Some are fighting to get the pendulum swinging back the other direction.  To return to pre-Prop 13 days where governments have great freedom to tax as they see fit..

What if  instead we stop the pendulum swing and develop a law that provides long term stability?

Prop 13 has two main impacts:

1.  It limits the authority of taxing entities to increase the value of the property, so rather than being taxed at the actual current value, you are taxed at the value at which you bought the house, plus a maximum of 2% per year.    This protects homeowners from increases in the expenses they build into their budgeting, but the corollary effect is if inflation exceeds 2% governments revenue is cut.

2:  It requires a 2/3 vote to impose additional taxes.

These two limitations decimated local governments finances when they took effect, and so the State stepped in and started creating the horribly complex and disfunctional revenue system the state now endures.

How do we fix it without going back to the old system that undermined peoples ability to own a house?

1.  We should keep the 2% per year limitation in place, but give government a lien on the house that entitles them to a piece of the sales pie to the extent housing market inflation has exceeded 2% per year.

2.  We should repeal the 2/3 vote requirement and replace it with a limitation that the maximum vote that can be required to enact a tax cannot exceed the percentage of the vote that enacted the vote requirement.

Remarks regarding gun policy

We all recall the horrific shooting in Arizona that left former Representative Gabby Giffords with devastating long term injuries, and killed many other people.  The following is an excerpt from the remarks of  Gabby Giffords husband , astronaut Mark Kelly, made at the sentencing hearing of Jared Loughner in Tucson, Arizona Nov. 8, 2012.

“Your decision to commit cold-blooded mass murder also begs of us to look in the mirror. This horrific act warns us to hold our leaders and ourselves responsible for coming up short when we do, for not having the courage to act when it’s hard, even for possessing the wrong values.

“We are a people who can watch a young man like you spiral into murderous rampage without choosing to intervene before it is too late.

“We have a political class that is afraid to do something as simple as have a meaningful debate about our gun laws and how they are being enforced. We have representatives who look at gun violence,
 not as a problem to solve, but as the white elephant in the room to ignore.  As a nation we have repeatedly passed up the opportunity to address this issue.   After Columbine; after Virginia Tech; after Tucson and after Aurora we have done nothing.,,,,
“In this state we have elected officials so feckless in their leadership that they would say, as in the case of Governor Jan Brewer, “I don’t think it has anything to do with the size of the magazine or the caliber of the gun.” She went on and said, “Even if the shooter’s weapon had held fewer bullets, he’d have another gun, maybe. He could have three guns in his pocket”  – she said this just one week after a high capacity magazine allowed you to kill six and wound 19 others, before being wrestled to the ground while attempting to reload.  Or a state legislature that thought it appropriate to busy itself naming an official Arizona state gun just weeks after this tragedy occurred, instead of doing the work it was elected to do: encourage economic growth, help our returning veterans and fix our education system...."

Voting to shape public policy....

...sometimes feels like trying to create an ice sculpture with a wrecking ball.

Is the Right ever Right?

As I contemplate Mitt Romney's assertions that the way to solve the health care problems is through the private sector, and the way to cure the economy is through cutting government and coddling rich taxpayers, it makes me cast my mind back over the last couple decades to contemplate how the Right's policy ideas have worked out.

Perhaps some Conservative readers can comment on some policies of the right that have actually worked, but all I see from history and the data is a consistent ability to be wrong.

In the early 1980's Ronald Reagan sold the country on the notion his tax cuts benefitting wealthy folks would "trickle down" to the benefit of everybody else.  Well, the data is in.  Seems like Mr. Reagan underestimated the ability of wealthy people to find and plug leaks, because they got very wealthy while the rest got nothing other than a big jump in the National debt because of all the taxes the rich folks didn't pay.

Also in the 1980's the right began belittling those with the temerity to suggest our actions are causing climate change, a position which Mr. Romney still espouses.  Even if the cause and effect is still somewhat unproven, is the conservative response to potential catastophe to ignore it because its not 100% certain?

Beginning in the 1980's Republicans took the lead in the movement to institutionalize discrimination against gays.  They discovered it was an issue that paid big dividends for them at the ballot box, eventually playing a big part in the Republican's taking over Congress and holding it from 1995 to 2007.  It also helped George Bush get elected, and reelected in 2000 and 2004.  Now even Republican's are beginning to realize that policy is fundementally inconsistent with the freedoms our country was found on.  It more and more looks like one of those policies that is going to make people 50 years down the road ask "what were they thinking?"

Once they got hold of Congress in 1995 Conservatives doubled down on the Reagan tax cuts for the wealthy, changed the Capital Gains tax law to turn the housing market into a speculator's casino, and removed the regulations that prevented banks from using our deposits on insanely stupid and speculative investments.  By the time they were being shown the door in 2007 we were descending into an economic collapse than nearly took the whole world economy down.

In the early 1990's they beat back the Clinton effort to bring some sanity to our health care market, which for decades has been most noteworthy for its ability to suck up lots of money and provide mediocre care in return (or no care for 50 million people or so).  Two years ago they were unable to beat Mr. Obama's push for universal coverage, but they certainly made it much more complicated (and in the end probably more expensive) than it needs to be.

Let us not forget the Republican notion if we just invade Iraq and topple the regime (the same Regime Republican's propped up in the 1980's as a counterweight to Iran) we would be welcomed as heroes and create a democratic country that would solve all our problems with the middle east.    No walk softly and carry a big stick for modern Republicans.

Mitt, like most of the Republican's I know, seems a nice fellow, with a nice family and good intentions.  I just wish he, and other Republicans, would spend a little more time cultivating the ability to expand their reality beyond their own experiences and ideology.

Simple Economic Truths

Wealthy people have more money than they have needs or wants, so they save their money and invest to try to make more money.  Their investment funds economic growth.

Lower income people have more needs and wants than money, so they save little and spend a lot.  But the money they spend on needs and wants generates economic growth.

To little money to invest stifles the economy.  But so does to little growth in the spending money in the pockets of lower income people.

Republican's obsess about the first part of this equation, but ignore the second part.

Asset bubbles are an indicator that too much wealth is going to the folks who's wants and needs are fulfilled.  There is not enough consumer demand to support new business, so the folks with extra money laying around start buying up existing assets hoping to sell to someone else for a higher price.

Asset bubbles have been a hallmark of the US economy for the last decade and a half, but Republican's still don't get it.  Our economy is weak because too much money is concentrated in the hands of people whose every need and want is satisfied, and not enough is getting into the pockets of people with needs and wants.

Republican Marketing Genius

The fact that Mitt Romney is in a dead heat with Obama is evidence Republican's are very good at Marketing.  Consider these facts:  

1.  There are always significantly more registered Democrats than Republicans. 

2.  Empirical historical and economic data show that over the last century the country generally suffers economically when Republicans run the show, and generally does well when Democrats run the shoe.

3.  Empirical historical and economic data show that over the last century the countries national debt generally shoots up after Republican's have run the show, and levels off or falls when Democrats have run the show.

4.  Within the recent memory of most voters Republicans controlled Congress from 1995 to 2007 and created the conditions that caused the financial collapse of 2008-09 which bogged us down in recession.

5.  Mitt Romney's stated economic theories are rooted in beliefs and assumptions identical to the theories the Republican's put into effect between 1995 and 2007 (and also between 1919 to 1933 that led to the great Depression), and indistinguishable from George W. Bush's campaign rhetoric.

6.  Barack Obama took office in January of 2009 when the economy was in free fall.  The economy shrunk something like 4% in the couple months before he took office and we were losing a million jobs a month.  He was like a Dr. who arrived at the scene of a crash as the patient was bleeding out.  His administration stopped the bleeding and has the patient well on the way toward recovery.  We have now had a couple of years of modest growth while Japan, Europe and the other large economies also sucked into the economic collapse we spawned in 2008-09 are still mired in recesssion.   

7.  After Republican's took over the House in 2011 their publicly stated policy was to prevent Obama from having any success that would help him get re-elected.  They put their policital agenda ahead of the countries business.  They played the major role in making the 2011-13 Congress statistically the most do-nothing Congress in history.

On these objective facts the Republican's should get obliterated in this election.  The vast majority of voters who are not political and are most interested in figuring out who is going to do the best job for the country should, on these simple facts, vote for Obama and the Democrats.

But it is the facts that have been obliterated.

I thought the Republican's made a crucial mistake about a year ago when they decided to have 12 or 13 televised debates to choose their candidate.  I thought it would educate the public about the nonsense of many of their positions.  To some extent it did, Republican's have garnered alot of votes over the last couple decades by appealing to voters prejudices about gays, or their outrage about abortion.  Both of those issues have lost most of their ability to generate more votes than they lose for Republicans (for the moment).

But the much bigger problem for Republican's in this election was economic.  They controlled all the levers of Government in the years leading up to the worst financial collapse since the great Depression.  How does one distract voters who lived through those years from that simple, damning fact?  

Their answer, which seems to be working, is to inundate the public in politics until they are sick of it.  Endless debates, coupled with unprecedented advertsing blitzes on every possible media, have created a sort of fact fatigue.  Voters have jobs to do, families to take care of, and want to have some fun.  They don't want to spend their spare time sorting through the overwhelming avalanche of information that has descended on us all.  

Once fact fatigue is in place the simple principles of marketing that business Republican's are so very good at can be effective.  Appeal to emotions with simple messages, and happy images.

It reminds me of the US auto industry that used their marketing expertise to sell us tail fins and images while the rest of the world was developing better cars.  Eventually the US auto industry hit a crisis point where a critical mass of consumers realized the US auto industry were selling lousy cars.  The US auto industry has never fully recovered.

So when will voters realize the Republican party is selling lousy economics?  

Not yet evidently.  A tip of the hat to Republican marketing, a razzberry for putting marketing ahead of good policy.