Thursday, May 31, 2012

Now THAT'S "Class Warfare"

If you follow politics you are no doubt familiar with the term ‘Class Warfare.”  This is a slogan that conservatives like to attach to the liberal call for increasing taxes on the top 1% wage earners.  Republicans and conservatives say that Democrats and liberals are engaging in a divisive campaign to demonize the rich by blaming them for all the country’s economic problems.  They believe that Democrats are unfairly repudiating the success of the rich and singling them out for the corrective action needed to right the economy…”Class Warfare.” 
Democrats argue that they are not singling out the rich but rather making the point that in a failing economy it is unfair to allow tax breaks and subsidies for the rich while slashing social programs that are critical to the poor and the middle class.
Is this ideological argument over how to fix the economy really “Class Warfare” or just a catchy phrase to make a political point? We’ll let you decide.
There is in fact a form of class warfare going on in this country that has been ongoing since 2010.  It doesn’t involve taxing the rich.  But it is political.  It is insidious.  And it is wrong.  It follows two very clear and defined paths designed to converge in November 2012.
The first path starts at the top of the food chain with the Supreme Court ruling in Citizens United v. Federal Election Commission.  In essence the Court ruled that individuals and corporations could anonymously give unlimited amounts of money in support of the candidate of their choice.  As a result, Super Pacs were formed that allowed billionaires, millionaires and corporations to donate enormous sums of money to influence elections in a way that were favorable to their own individual interests without fear of incrimination or recrimination.   
As a result, the 2012 elections will be funded by the largest amount of campaign contributions in our history.  It is expected that in the neighborhood of $3.4 billion dollars will be spent in an effort to influence the electorate.
The Republican Party and their followers are taking full advantage of this change in the law.  They announced yesterday that they plan to spend an incredible $1.8 billion on advertising and community outreach efforts to promote their candidates.  The billionaire Koch bothers will donate $400 million.  The Koch brothers Super Pac: Restore Our Future will spend $150 million.  Karl Rove’s Super Pac: American Crossroads $300 million.  The US Chamber of Commerce $150 million; the list goes on and on.  And that doesn’t include the $800 million that the Republican National Committee will spend in support of their candidates.  By comparison, in 2008 the McCain Campaign spent a paltry $300 in its failed attempt to win the White House.  The onslaught on negative campaign ads that will swarm our airwaves over the next five months will be unlike anything we have ever witnessed before.  All made possible by a court decision which allows the wealthiest among us to use their wealth to buy political favor.
The second path runs through the bottom of the food chain.  There is an ongoing organized effort across the country to reduce voter turnout this coming November.  Since the beginning of last year 180 bills have been passed in state legislatures designed to restrict voting rights.  14 of the states that have passed voter restriction laws represent 70% of the electoral votes needed to win the presidency.  These restrictions take many forms.  Some require identification documents never before required and unavailable to a large portion of the electorate.  Some restrict early and absentee voting favored by voters whose jobs or physical condition make it difficult to get to the polls.  Others add layers of paperwork to voter registration which voters find cumbersome, oppressive and unnecessary.  Florida Governor Rick Scott has instructed his staff to initiate an organized purge of the registration rolls removing those deemed, for whatever reason, to be improperly documented.
So why are they doing this? To “eliminate voter fraud” they say.  That’s good…right?  If that was in fact their real purpose we would honor their patriotism.  But unfortunately every bi-partisan analysis of the activity conducted by these state legislatures points to a very different motive.
Here are the facts. 
1.)    Voter fraud in this country is virtually non-existent; less than 0.010%.  And in those cases where fraud does occur it is in the counting of the votes not in individuals trying to vote more than once or illegal immigrants trying to cast a ballot.
2.)    The activities designed to restrict voter turnout are occurring in those states governed by Republican led legislatures.
3.)    Analysis shows that these voter restriction laws disproportionately target students, Hispanics and the elderly; groups that vote overwhelmingly for the Democrat candidate.
So while the wealthiest Americans are anonymously contributing billions in support of Republican candidates; Republican led state legislatures are passing restrictive voting laws that target the poor, the middle class and minorities; groups that typically support Democrat candidates. 

Is it just us or is there a pattern here?

Now THAT’s class warfare!




Wednesday, May 30, 2012

This and that...

Mitt Romney won the Texas primary and with that victory accumulated enough delegates to officially make him the Republican Party’s nominee for the presidency.  Romney celebrated his victory by attending a fund raiser in Las Vegas and cavorting with…wait for it…Donald Trump. Trump is still beating the birther drum questioning the President’s citizenship.  Romney’s continued association with self aggrandizing Trump and his failure to denounce Trump’s ridiculous assertions about the President says a great deal about his decision making capabilities.  Romney is showing himself once again to be a shameless opportunist.  Romney is a businessman seeking to close a deal; and he will say or do anything to close that deal.
Facebook stock continues to plummet.  The company which was over valued at $38/share closed yesterday at $28.84; a drop in value of 24%.  The embarrassing performance of this IPO has a number of startup tech companies in Silicon Valley re-evaluating their strategy.  This huge IPO will serve as a costly teachable moment going forward.  It is obvious that greed played a major role in the over valuation. It is also obvious that for all his technological expertise Mr. Zucherburg is not qualified to run a multi-billion dollar company. He needs to turn over the management to a seasoned professional just as the founders of Google did.  Once the company has stabilized in the market and implemented a strategic path moving forward he can retake control.  Being photographed enjoying McDonalds chicken nuggets as you honeymoon in Rome while your company is losing 25% of its value does not inspire investor confidence.
The conflict is Syria continues to dominate the headlines.  Mitt Romney has criticized the President’s leadership though he has been vague as to what he believes the President should do.  At times it seems that he supports US military action as he calls upon the President to assume a leadership role.  At other times he seems to believe that the US should arm the rebels while threatening the Soviets, who support the Assad regime, to assert their influence on the Syrian government. The Syrian conflict is a complex issue that involves far more than the senseless killing of civilians by a thuggish government.  Unlike Libya, the violence in Syria is scattered and the opposition fragmented and disorganized.  The “bomb the hell out of them” strategy that the neo-cons embrace is a very dangerous option to consider.  If America chooses to exert military force and move on Syria like a bull in a china shop, it risks setting off a regional conflict that could easily explode into a global conflagration.  Russia and China have substantial interest in seeing that Assad remains in power, with Russia serving as Syria’s primary ally.  Just yesterday both Russia and China decreed that they would block any military action by the UN Security Council.  Romney wants to threaten them.  With what?  Neo-cons want boots on the ground.  Explain that strategy to war weary Americans.  Saudi Arabia, Israel, Iran, Iraq and Turkey all have a vested interest in the region.  The wrong strategy could have a disastrous unsettling affect.  Is there a moral issue?  Certainly!  But even though the slaughter of innocent women and children is horrific, sadly the atrocities and violence in Syria are not as pronounced as they are in other countries; atrocities which go on un-noticed by the international community.  The first question that the President has to ask is whether or not the violence in Syria poses a threat to our national security…and then he has to set his response accordingly.  The situation calls for patience and restraint.  Arming the rebels or unilaterally sending in our military will only exacerbate an already incendiary situation.  Although the atrocities are repulsive the response from the right has been little more than emotional moral hand ringing.  The President is right to move very cautiously here.                         

Tuesday, May 29, 2012

Game Change in Syria

By now you have undoubtedly seen the grizzly pictures of the 108 massacred civilians allegedly executed by the Syrian government in Homs province.  Reports indicate that after shelling the residential area with tanks and artillery, pro government forces went door to door shooting the men point blank and stabbing the women and children.  The United Nations said 49 children and 39 women were among the dead.
The reaction here at home has been swift and naturally along political party lines.  Secretary of State Clinton again echoed the administrations call for Syrian President Bashar al Assad to step down; a statement that one conservative pundit referred to as “insipid rhetoric.” “We cannot allow this to stand” screamed another.  Naturally Senator John McCain blasted the President, blaming Obama’s reluctance to take earlier decisive action as the reason for the massacre.  He called the US response to Assad’s killing of civilians a “shameful episode in America’s history…this administration has a feckless foreign policy that abandons American leadership. It cries out for American leadership; American leadership is not there.”
Mitt Romney wasted no time jumping on the bandwagon, turning a memorial to those who have fallen into a campaign stump speech.  Appearing with McCain at the Veterans Museum and Memorial Center in San Diego Romney warned of threats to America all around the globe.  He argued that American leadership and military might is essential for global piece; and he criticized those who would shrink the military to pay for social programs.
The situation in Syria is a political and diplomatic quagmire.  Unlike Libya where there was broad international support to help the rebels remove Gadhaffi; Assad has powerful regional support from Russia, China and Iran.  Unlike Libya where there was an organized opposition to Gadhaffi that could be armed by the US; opposition in Syria is scattered and disorganized. And US military advisors have said that the no-fly zone successfully implemented in Libya is not a viable option in Syria.
Assad has a military force of 300,000.  The consensus is that the only way for the US to unilaterally and effectively remove the Assad regime is to put military boots on the ground. In other words there is no cheap and easy way to do this.
Not that any of this logic matters to McCain or Romney.  They view any policy that does not involve the US military as the point of the spear as a failed policy and a sign of weakness. 
There is no doubt that the massacre of 108 men, women and children is a game changing event in this conflict.  Russia has taken a hard line warning Assad that he needs to change course or lose their support.  Countries all across the globe are expelling Syrian diplomats.  Perhaps pressure from the international community will now have the desired effect without resorting to military intervention.  Given that any military strike will be essentially a US operation; we hope that sanctions and political pressure prevail.
We continued to believe that war should be the solution of last resort in any conflict.  John McCain and Mitt Romney’s criticism of the President’s policy of international pressure and economic sanctions is the exact same criticism that they levied against him with regards to Libya.  They believe that the only way you stop aggression is through aggression.
Let us never forget that the previous administration ignored international calls for diplomacy and chose to use the boots of the United States military to remove a dangerous dictator in Iraq.  4,480 dead, 32,000 wounded and $803,920,338,347 dollars later we know how that turned out.
Conversely the Obama administration chose to organize an international coalition to lead the removal a dangerous dictator from Libya.  This “lead from behind” strategy that conservatives like to criticize cost the American tax payers less than $1 billion dollars.  More importantly not one single American life was lost.
War hawks like McCain, Romney, Dick Cheney and Lindsay Graham are fond sending our young men and women into battle at the slightest provocation.  They are obsessed with demonstrating the size of America’s penis without contemplating the cost of the aftermath.  America has proven its manhood and leadership often enough in history that we don’t need to go all “cowboy” every time there is a conflict.  Our enemies and our allies are happy to see us expend our resources while they keep their blood and treasure safely at home.
The carnage in Syria must come to an end.  If Assad refuses to step aside then the international community must find away to stop him from executing his own people.  This is not America’s fight alone. World piece is a global responsibility.  Those who scream “We cannot ALLOW this to stand” are arrogant fools who have no understanding of our place in the world community nor any concept of the consequences our actions have on the world stage.  
We have seen the Iraq “cowboy” flick.  It didn’t end well.  Let’s not consider a sequel.   

Sunday, May 27, 2012

Take a moment...

Most of us remember where we were on that clear September 11 morning in 2001.  We remember the initial shock of seeing the planes crash into the buildings and the unbelievable sight as they collapsed into rubble and dust.  Those who were there remember the smell, the taste, the chaos, the doubt, the anguish and the fear that the terrorists might strike again.  Friends and loved ones lost.  Families shattered...all in a matter of moments.  It was a day that brought the country momentarily to its knees and ultimately changed our lives forever.  And every September 11 we remember what happened that day, and we honor those who perished in the towers and those who died bravely trying to save them.
Now imagine finding yourself in a situation where 9/11 occurs every single day.  Death, destruction, fear, chaos, doubt, shock, anguish and terror are all around you.  Friends lost.  Lives irrevocably changed.  All in a split second of time.
That’s what it is like in countries all around the world.  That’s what it is like for the men and women serving in Iraq and Afghanistan.  And that is what it has been like for those who have donned the uniform and served our country in battle for over 200 years….9/11 every single day.
We remember and honor those who were lost on 9/11.  And well we should.  By why do we seem disconnected from those who have served and died just as tragically on foreign shores?  Is their loss any less horrific…any less significant?
Perhaps it is because 9/11 occurred here at home; in New York, and Washington and Pennsylvania. Places that we have visited.  Places where friends and family live.   Maybe that’s why we feel a special connection.  Iraq and Afghanistan are strange, foreign lands far, far away.  Cities we’ve never heard of.  Places we’ve never been. 
Does that mean that the men and women who serve in those strange and foreign lands should be any less respected...or their lives any less valued?
As Americans we are all understandably connected in some way to the events of 9/11.  But only one percent of us are connected to the wars in Iraq and Afghanistan.  To the rest of us these wars are a distraction; little more than a 60 second story on the evening news.  We take them for granted.  That’s sad…and it’s wrong!
We should always remember the events of 9/11 and honor those who died that day.  We should also remember that our military men and women serving abroad face the horrors of 9/11 each and every day of their tour.  And they do so voluntarily so that the rest of us may never face another 9/11.
So on this Memorial Day take a moment…just a moment…to remember, honor and thank those who risk THEIR lives so that we may live OUR lives free from the horrors of that clear September 11 morning in 2001.   

Friday, May 25, 2012

CEO Success = GOV Flop?

Mitt Romney likes to tell us that his time at Bain Capital qualifies him to be President.  In fact he says that his years of experience running Bain trumps Barak Obama’s experience as a community organizer and career politician.  Romney has made his time at Bain the cornerstone of his campaign.  He asserts that when Obama criticizes his success at Bain he is criticizing capitalism and the free market system.
First let’s set aside all the silliness of Romney’s claim that the President is criticizing free enterprise when he says that Romney’s time at Bain does not qualify him to be President.  What the President has clearly said is that Romney was extremely successful as a private equity manager.  He made millions for his investors and operated within the rules of commerce. But Obama rightly asserts that being President is about more than making profits.  It is about making life better not only for the big money investors but for the little guy that Bain routinely laid off in order to generate those substantial profits.  Obama says that being President is more than cutting expenses, laying off workers and flipping companies.  The President is right, because unlike in private equity situations, when you are running a country everyone matters.
Now that we’ve got that out of the way…
Let’s return to Romney’s emphasis of his time at Bain.  What’s curious is that while Romney is more than happy to talk about his time at Bain he refuses to discuss his time as Governor of Massachusetts.  In fact when he does talk about his term as governor he mentions it as a punch line.  Just yesterday he said:  “I spent four years as Governor of Massachusetts…and I didn’t inhale.” (Pause for rim shot…ta dum, dum).  It’s as if his time away from the business sector is some sort of joke.  We doubt that the people of Massachusetts feel the same way.
The thing is most political observers view one’s time serving as governor as an excellent training ground for moving into the presidency.  Governors deal with many of the same problems that a president does: budgets, unemployment, deficits, poverty, taxes, infrastructure etc.  In terms of qualifying one to be president it would seem that the practical experience of running a state would far outweigh that of running a private equity firm. 
So why isn’t Romney telling us what a great job he did as governor? No doubt his years of experience running Bain helped him to be an outstanding governor; creating jobs, reducing the debt, increasing efficiency and bringing new business into the state…right?
Not so much!
During Romney’s term as Governor of Massachusetts the state ranked 47 out of 50 in terms of job creation.  220,000 workers fled the state in search of better employment opportunities.  And during his time there Romney increased the state’s debt by 16.4%; saddling Massachusetts citizens with the highest per capita debt in the nation. 
Running a private equity does not prepare a person for the governor’s mansion much less the White House.  At least it didn’t prepare Mitt Romney.  His record as governor makes that clear.
In spite of Mitt’s assertions that CEO Romney’s success at Bain is indicative of how he would fair in Washington; we suspect that GOVERNOR Romney’s record in Massachusetts provides a more accurate portrayal of what can expect from a Romney presidency.  


Thursday, May 24, 2012

Lies, Lies And More Lies

The Republican Party and the Romney Campaign have embraced a strategy of misinformation, false narrative, obfuscation and bold face lies in their effort to defeat the President.  Millions of busy Americans who have more important things to do than wade through the daily minutia ladled out by the media will go to the polls believing these falsehoods to be statements of fact.  So as a public service to those who seek the truth about the President’s record we offer the following “fact checked” summary. 
According to the Republican Party and Mitt Romney…
“The President has dramatically increased government spending…putting our nation in financial peril.”  That is a lie.  Government spending under Obama is at the same level that it was under George W. Bush.  In fact government spending under Obama has increased at the slowest rate since 2002.  In spite of the stimulus, bank bailout, auto bailout, and two ongoing wars, government spending per capita has actually dropped under Obama.
“The President has failed to create jobs.”  That is a lie.  When Obama took office the country was losing private sector jobs at a rate of 700,000 per month.  Not only has Obama stopped the hemorrhaging but the country has realized 26 consecutive months of job growth.  4.2 million private sector jobs have been created under the Obama Administration.  Nationwide unemployment was over 10% when Obama was sworn in.  It now stands at 8.1%.  The unemployment numbers in key swing states are even better: Ohio/7.4%, Virginia/5.6%, Iowa/5.1%, Colorado/7.9% and Nevada/6.9%.  The nationwide unemployment numbers would be even lower if not for the austerity programs initiated by Republican state legislatures who laid off 700,000 local government workers.  
“The President has increased taxes.”  That is a lie.  The tax rates under the Obama administration are exactly the same as they were under George W. Bush….the lowest in our history.  The only tax changes written into law under the Obama Administration have been tax decreases: the Make Work Tax Credit and the Payroll Tax cut.  Obama has actually cut taxes, not increased them.
“The President has authorized a massive increase in regulations that are strangling corporations and small businesses and hampering their ability to succeed.”  That’s a lie.  The Obama Administration has gone through a complete review of the current business regulations and eliminated those that were redundant, unnecessary and hurtful to the economy while maintaining those that guaranteed public safety and a fair commerce.  The result is that there are now less regulatory hurdles for businesses to navigate than there were under the “business friendly” Bush Administration.  And as for hampering corporate America’s ability to succeed...that’s another lie.  Corporations and small businesses are recording record profits, exceeding the soaring profits they were making prior to the 2008 recession.
“The stimulus failed.”  That is a lie.  Virtually every economist says that the stimulus authorized by Obama kept the country from falling into a depression.  They say that the problem with the stimulus was that is wasn’t big enough to offset the damage brought about by Wall Street greed.
“The auto bailout was a bad idea.”  That is a lie.  The auto industry was on the verge of liquidation.  They needed a bridge loan to maintain operations until they could arrange for a managed bankruptcy.  But no one was willing to lend them the money…not even Romney’s Bain Capital.  The Bush and Obama administrations stepped in and made the loans which saved the industry from liquidating. Had the industry been allowed to liquidate, as Romney suggested, an estimated 1.5 million jobs would have been lost. Today the auto industry is flourishing.  Demand is so high that they are putting on a third shift.  Romney has stated that the President followed his recommendation and therefore he (Romney) will “take a lot of credit for the auto industry’s revival.”  According to Steve Rattner the “car czar” who managed the auto bailout for the Bush Administration; that’s another Romney lie.
“The bank bailout was a bad idea.”  That is a lie.  Republicans would like to saddle Obama with the bank bailout but in fact it was started by George W. Bush.  Once again every economist will tell you that due to the size and scope of the banks in danger of default; allowing them to go under would have plunged the country into a deep depression.
“The President apologizes to our enemies.  He is weak.  His foreign policy is one of appeasement.”  That is a lie.  Osama bin Laden, public enemy #1, is dead by all accounts thanks to Obama’s courageous decision to authorize the mission.  Presidents Clinton and Bush had earlier opportunities to take bin Laden down but passed.  In addition to bin laden, 22 of the 30 most wanted al Qaeda leaders have been eliminated under Obama’s watch.  Al Qaeda is in disarray thanks to the unending drone attacks authorized by Obama.  And the President continues to hunt those that attacked us on 911 by taking the fight to Pakistan, Yemen and Somalia. Obama has ended the war in Iraq and increased the troop levels in Afghanistan. He has recently struck a deal with the Afghan government that will maintain an American presence in the region for another decade. In spite of pressure from Republican leaders to send in troops, the Obama administration, in particular Sec. of State Clinton and Sec. of Defense Gates put together a coalition that removed Libya’s Gadhaffi from power without placing one single American boot on the ground.  In an effort to halt Iran’s nuclear production he has authorized sanctions that are that are strangling the Iranian economy.  When Iran threatened to cut off the flow of oil through the Strait of Hormuz Obama sent in a carrier fleet to send a stern message that such a blockade would not be tolerated.  During a recent NATO meeting the President refused to meet privately with our alleged “ally”, Pakistan President Asif Ali Zardari.  The intentional snub was due to Zardari’s ordering the closing of a supply line critical to US troops.  You may disagree with the President’s foreign policy but to call it “weak” and “a policy of appeasement” is just a lie.
“This President is the most divisive President in our history.  He seeks to pit one American against another.”  That is a lie.  We can understand how the President’s call for a tax increase on millionaires would be deemed divisive by his opponents. But that pales in comparison to the manner in which Republicans have conducted themselves.  They have openly questioned the President’s citizenship and his Christianity.  They have said he is not an American and does not believe in American exceptionalism.  They have called him “different”, a Muslim, a fascist, a communist, a socialist and a nigger.  They publically called him a liar…shouting “you lie” as he was delivering his State of the Union address to the nation.  The day after his inauguration the Republican Senate Minority Leader, Mitch McConnell, said his number one goal was not to create jobs or fix the economy…but to make Obama a one term President.  Minority Whip Eric Cantor abruptly walked out of a meeting with the President and Speaker of the House Boehner refused to take his phone calls.  In the Senate they have used the filibuster more times than ever in recorded history to block his agenda.  And in the House the Tea Party members have said “no” to anything that might give him a win.  Meanwhile the President, in a failed effort to reach consensus, has backed off on a number of his policies including: closing Gitmo, repealing the Bush tax cuts, increasing taxes on the rich and decreasing defense spending.  There is definitely divisiveness in our government. But to pin the blame on the President is just another lie.
“The President’s policies have failed.”  This is perhaps this biggest lie.  When Obama came into office the banking industry was in crises, the auto industry was about to close down, unemployment was at double digits, the country was hemorrhaging 700,000 private sector jobs per month, the economy was in freefall, we were conducting two costly wars and Osama bin Laden was sending us videos condemning us as the “Great Satan.”  Under President Obama’s direction, the banking industry has stabilized and the auto industry is thriving.  The unemployment numbers are steadily declining and the country has produced 26 consecutive months of job growth.  The economy is slowly growing.  Corporations are making record profits.  The war in Iraq is over and Osama bin Laden and many of his henchmen are dead. 
The President’s Republican opponents don’t like to talk about the monumental pile of crap that the previous administration left waiting on Obama’s desk. While that shortsightedness may find political footing, it is disingenuous and does not pass the smell test.  The fact that President Obama has managed to get us to where we are…given where we were when he took office…is pretty remarkable and cannot be viewed rationally as anything but a success.
There are plenty of things to criticize about the Obama Administration.  Perhaps the President could have shown more leadership in working with Congress to overcome the gridlock that permeates Capitol Hill.  Perhaps he should have spent less time on health care reform and put more effort into rebuilding our infrastructure and modernizing our schools.  We are all entitled to form our own opinions.  But the facts are the facts.  And while we are each entitled to our own opinions we are not entitled to our own facts.         


Wednesday, May 23, 2012

A Winning Strategy For Obama

It would appear that the President has decided that the way to win re-election is through a two pronged strategy. 
The first is to attack Mitt Romney’s record at Bain Capital.  The President makes the argument that examining Romney’s record at Bain is appropriate because Romney himself has said that his experience at Bain is what qualifies him to run the country.  Romney opened the door…the President is going to walk through it.  Fair enough!
Romney says that he created jobs while at Bain and he will do the same as President.  President Obama counters that in fact Romney’s first allegiance as a private equity manager was to make a profit for his investors.  The President says that while Romney was very good at generating profits, he made those profits by downsizing companies, laying off workers and reducing or liquidating pensions.  President Obama says that the Presidency is about more than making profits; it’s about “making sure that everyone has a fair shot.”
This brings us to the second part of the President’s strategy…fairness.  The President believes that the path toward fairness leads to an increase in taxes on the richest Americans.  He argues that it is unfair for the richest among us to get tax breaks and subsidies while the poorest among us struggle just to put food on the table.
This two pronged strategy has a lot of validity; and it might work.  But if while making these arguments the President’s campaign is seen as demonizing Romney and the rich for LEGALLY making millions we believe that it will fail. 
We don’t believe that Americans want to hear about class warfare or sit through tutorial on the inner workings of private equity.  They want to know what the candidates are going to do to make things better.  Most Americans aspire to achieve the success that Romney has achieved.  To demonize Romney and the rich is to demonize the American dream.  The path that the President has chosen lies along a very slippery slope.
But there is a strategy that he could follow that would guarantee him re-election. 
Two words…Bowles-Simpson.
 If the President were to embrace the recommendations of his own debt commission he would win in a landslide.
Bowles-Simpson is a strong bi-partisan solution to our most difficult economic problems.  It cuts $4 trillion off our long term debt, revamps the tax code, eliminates tax loopholes, lowers tax rates, broadens the tax base and reforms entitlements.  It puts a “hurt” on both sides of the isle while at the same time providing bi-partisan appeasement on the most troublesome issues.  In short, it embodies all the difficult decisions that everyone knows we need to make for the good of the country.  And it would pass through congress today with bi-partisan support.
So if the President just wants a chance at a second term he can continue to attack Romney’s record and demand higher taxes from the rich.  That may work. 
Or he can endorse Bowles-Simpson and not only win a second term but do something good for the country in the process. 
Support Bowles-Simpson, Mr. President.  Dare Congress not to pass it.  Show the country that you have the political courage to do the right thing.
Slam Dunk!  Game over!              

Monday, May 21, 2012

Securing Our Children's Future?

We hear a lot of talk coming from the right about securing our children’s future.  They seem to be deeply concerned that if we continue to spend as we have in the past we will be saddling our kids with a mountain of debt that will bury their American dream forever.
 Point taken!  We agree that a balanced approach to fiscal responsibility is long overdue.  But what we have trouble understanding is how the conservatives can speak of preserving our children’s future while instituting policies that that doom the kids to failure before they even get started.
We’re talking about education.
The Republican Party is so hell bent on cutting spending that they have ravaged the very institution that provides the cornerstone for building our children’s future.  Republicans in Washington have spoken openly of downsizing or even eliminating the Department of Education.  At a time when every other industrialized nation is investing in education and finding innovative ways to get the most out of their children we are slashing funds and eliminating teachers in the name of fiscal responsibility. 
Slashing federal funds for education achieves the desired effect of reducing the debt and deficit.  But what are the affects as theses cuts trickle down to the state and local levels?  State governments were struggling to survive even before the economic downturn.  Now faced with the decline in funds flowing from Washington local governments are hacking away at their budgets with a machete.  First to go are policemen, firefighters and teachers.  Local governments run by conservative legislators have been particularly aggressive in eliminating those bothersome government employees and their burdensome benefit packages.  The result is overcrowded classrooms, crumbling and schools and tenured teachers who have long since lost the desire to teach effectively.    
The negative impact on our children is illustrated in every international study taken.  Among industrialized nations our kids rank anywhere from 17th to 21st in reading, math and science.  Our dropout rate is increasing as kids shun depressing classrooms monitored by disinterested teachers.  The dropout rate alone should be cause for concern. 
According to the National Center for education Statistics the median income for dropouts is $25,000 compared to $43,000 for those who graduate high school or get a GED.  The unemployment rate is 15.4% among dropouts and 9.4% among graduates.  And 75% of those currently locked up in prison are dropouts.
And now we hear people saying that maybe a college education isn’t worth the effort or the cost.  Millions of our kids are coming out of college saddled with tens of thousands in student loans and no prospects of employment to pay off the debt.  Yet republicans want to cut Pell Grants.  Mitt Romney’s simple solution is that kids should not take on student loans in the first place.  He says they should borrow the money from their parents.  Apparently Mr. Romney does not realize that most Americans are not financially able to float a six figure loan to their kids.
We understand that simply throwing more money at our education system is not the answer.  But slashing and burning our education system will not produce better students.  The key to the country’s future lies within our children.  If we cut the debt and deficit on the backs of our kids we will not only fail to secure their future we will have doomed them to failure. 
If we cannot find a way to efficiently and effectively enable our kids to compete on the world stage then all our boasting about being the greatest country in the world is nothing but hot air.                      

Sunday, May 20, 2012

Republicans: Conservative In Word But Not In Deed

Republicans like to refer to themselves as “fiscal conservatives.”  You would be hard pressed in this election year hear a Republican deliver a speech that does not include the weeping and gnashing of teeth over the country’s debt and deficit.  If they are not railing against the President’s “reckless spending” they are comparing us to Greece and warning that we are mortgaging our children’s future with enormous debt.  Just the other day Speaker Boehner said that he had had enough.  He warned anyone who was listening that he would not allow any increase in the expiring debt ceiling unless Democrats agreed to spending cuts in an amount greater than the increase in the debt limit.
So one has to wonder why Boehner’s Republican controlled House just approved a $642 billion defense budget that is $8 billion MORE than the President and congressional Republicans agreed to last summer.
(You remember last summer, when Republicans were so doped up on “fiscal austerity” that they almost caused the country to default on its debts.  That was the same summer their reckless intransigence resulted in a lowering of our credit rating for the first time in our history.)
You have to wonder why that defense budget includes the construction of a missile defense site on the east coast THAT THE MILITARY DOESN”T WANT.
You also have to wonder why their presumptive nominee, Willard Romney, not only agrees with this unfunded increase in defense spending but he also wants to continue the Bush tax cuts and lower the corporate tax rates; all without providing any specifics on how he intends to pay for them.
The fact of the matter is that the Republican Party lost the right to wear the mantle of fiscal conservatism decades ago. Ronald Reagan was by today’s standards a moderate who actually raised taxes 19 times during his two terms.  George H.W. Bush told us to read his lips when he said: “No new Taxes.”  We all remember how that turned out.  And his son, Bush 43, led us into two unpaid wars, the aforementioned unfunded Bush tax cuts and the unfunded Medicare Part D prescription drug plan that was the largest social program in our history.  All in all “W” managed to increase the debt by $5 trillion all by himself.
Republicans like to talk about being fiscally conservative.  History tells us that have trouble practicing what they preach.  Recent events tell us that nothing has really changed.          

Friday, May 18, 2012

A Case Of "Google Envy"

The Facebook phenomenon reaches a whole new level of hype today as public trading on the NASDAQ exchange begins.  Facebook has priced its IPO at $38 per share…the high end of its expected range of $34-$38.  The IPO values the company at $104 billion; more than corporate icons like, McDonalds and Disney.  It is the third highest valued company to ever go public, falling between power company Enel and General Motors.  The largest US IPO was Visa, which raised $17.86 billion in 2008.  Facebook’s early investors could take in as much as $18 billion.
While there is no question that Facebook is one of the great American success stories of all time, the valuation of the company leaves many experts scratching their heads.  Although the company has changed the course of social media and boasts over 800 million users; many financial experts believe that the cost is too high for a relatively unproven company.  Last year, the company earned a $668 million profit on $3.7 billion in revenue.  If shares trade at $38, Facebook would be valued at more than 80 times it annual earnings compared with the 13 times earnings average of the S&P 500.
Many analysts believe the risk is too great and the valuation too high.  After all Facebook is a company that doesn’t make anything.  While the company has a vast number of active users, there are serious questions regarding the effectiveness of reaching those users through advertising.  GM recently pulled $10 million in ads stating that the ads failed to impact customers’ purchases.  Many view the company as little more than a platform where people can chat and post pictures of animals wearing hats…a platform that they expect will soon be surpassed given the rapid advance of technology.  Remember MySpace?
So why is there all this hype over a company that most seasoned investors view as an unproven and overpriced risk?
The answer is “Google Envy.”  Many investors see a similarity between Facebook and Google.  Those that missed the early boat on Google don’t want to be left waiting at the dock again when Facebook shoves off.  Google went public in 2004 at $85 per share.  As we write this Google is listed at $624.09 per share.  For investors to obtain the same return on investment with Facebook that they did with Google; Facebook would have to reach a valuation of approximately $1 trillion.
For Facebook to reach anywhere near those heights they are going to have to find a way allow advertisers to effectively reach their growing bank of users.  On the front burner is finding a way to post ads onto mobile devices…like iphones and ipads.  While that may appease prospective advertisers it is just a likely to infuriate mobile users who don’t want to see ads popping up at every turn.
Facebook, once but a dream concocted in a college dorm room, is now one of the highest valued companies in history.  Its founder, a 28 year old wunderkind, by day’s end will be one of the richest men on the globe.  Will this amazing story continue or will it be the tale of just another bust?
Google…or MySpace!       

Thursday, May 17, 2012

Time To End the Clown Show

The Senate voted on five budget proposals yesterday. None passed.  In fact the President’s budget proposal was defeated by a 99-0 margin.  Not one Democrat backed the President.  These were symbolic, partisan budget proposals not designed to promote compromise but rather to cover their ass with their constituents. “We’re trying to get things done but we can’t get the other side of the aisle to cooperate.”
The President invited congressional leaders to lunch at the White House to discuss the economy and the debt.  Within minutes of adjourning the meeting both sides were telling the press how forceful they had been in making their ideological points to the other side.  
We wrote yesterday about the avalanche of critical economic events that are thundering down on Washington. Yesterday’s “show” demonstrated once again that these people, on both sides of the aisle, are not capable of effectively dealing with the serious economic issues facing the country.  Instead of having a thoughtful debate and constructive negotiations these people are floating symbolic partisan budget proposals followed by mind numbing recitations of their ideological talking points.
These are not serious people.
The country is in desperate need for leadership; someone with the political courage to put the country first and party second.  The President needs to fill that void. He needs to broker an economic solution that causes pain to both sides of the aisle for only then will it be both substantive and fair.
If he is looking for a place to start he might consider the proposal offered by his own debt commission all those many months ago.  The one he immediately discarded out of hand. 
Simpson-Bowles looks pretty good right now.     

Wednesday, May 16, 2012

Let's Get Ready To Rumble...

We are about to witness a confluence of events that will have an enormous affect our economy for the next several decades.  The manner in which the two political parties and their respective nominees are able to respond to these events will ultimately decide who will win the White House this fall.
Within the next ninety days the Supreme Court will announce its decision regarding the constitutionality of the President’s Affordable Health Care Act.  The ruling will have a dramatic effect on the distribution and cost of health care in this country.  The validation or defeat of the President’s signature piece of legislation will also have an enormous impact politically heading into the election.
Within ninety days the Supreme Court will also hand down its ruling on Arizona’s tough immigration law.  The effect of this ruling will determine how we police our borders and will go a long way to determining the future course of dealing with both legal and illegal immigrants.   How this plays out will have a direct effect on their benefits, voting rights and tax obligations.  Needless to say the economic affect on local, state and federal budgets will be substantial.
On October 1, 2012 the federal government will orchestrate across the board spending cuts totaling $1.2 trillion dollars.  This will include a $450 billion reduction in military spending. These automatic cuts are the result of the Super Committee’s failure to reach a deal on the debt and deficit.
On December 31, 2012 the Bush Tax Cuts will expire resulting in a substantial across the board tax increase for all Americans.
On December 31, 2012 the temporary payroll tax cut extension currently in place will expire resulting in another tax increase.
On December 31, 2012 the current extension of unemployment benefits will expire removing the primary source of income for millions of Americans.
The ultimate disposition of each one of the aforementioned events impacts the lives of millions of Americans and therefore carries huge political consequences in what promises to be a very close election.
House Republicans were first to enter the fray.  Speaker Boehner, addressing the Peter G. Petersen Foundation’s 2012 Fiscal Summit said that the GOP led House will vote to extend the Bush tax cuts and will act next year on “broad based tax reform that lowers rates for individuals and businesses while closing deductions, credits and special carve outs.”  He was not specific as to what those might be.  Regarding the debt ceiling, Boehner drew a line in the sand saying; “I will insist on my simple principle of cuts and reforms greater that the debt limit increase.”  You may recall that last year the Tea Party members of Boehner’s caucus forced him to walk away from a deal with the President.  The resulting impasse caused credit rating bureaus to reduce the country’s credit rating for the first time in history.
Republicans in the Senate are going on offense as well.  Today, no less than three Republican Senators will offer budget proposals for consideration.
The Democrats have been slow to respond.  Harry Reid and the Democrat led Senate have not put forward a budget proposal in the past three years; preferring instead to pick apart the Republican’s draconian offerings.  The President has offered bits and pieces of a proposal but has yet to list specifics while shying away from any mention of entitlement reform.
As we have said before this promises to be a very close race with the victor winning by a mere 2-3 percentage points.  The days of whining about social issues, dissecting income tax returns and questioning birth certificates is over.  It is all about the economy and the future of the country.  We believe that the candidate that can effectively communicate the most realistic, specific and sensible path through the events previously mentioned will win this election.  That proposal will have to include an overhaul of the tax code, difficult spending cuts and entitlement reform.  It will require a strong leader willing to take a political risk to do the right thing for the good of the country. It will require leadership. 
But that is what a President is supposed to do…lead.

Tuesday, May 15, 2012

Demonizing Romney Won't Work

Demonize Romney!  If the first salvo fired by the Obama Campaign is any indication of the strategy that lies ahead; “Demonize Romney” has replaced “Yes We Can.”
The Obama Campaign released a new television ad, website and online video which portray the presumptive Republican nominee as a cold hearted corporate pirate who got rich by cutting jobs and ravaging companies.  The story focuses on a Kansas City Missouri steel mill that Romney’s former company, Bain Capital, failed to restructure.  Jobs were lost and those workers who remained saw their pensions reduced while Bain walked away with a handsome return on their investment. 
The problem with this “Demonize Romney” strategy is that it won’t work.  For every example the Obama Campaign trots out showing Romney and his Bain Capital buddies cutting jobs or closing factories, the Romney Campaign can produce a half dozen success stories where jobs were created and companies flourished.  Romney’s job through Bain was to make money for its investors; investors that included non-profits, foundations and pension funds.  By all accounts that we could find, Romney/Bain were extraordinarily successful and played by the rules.  The American people understand how capitalism works and they are not going to punish a guy for making money while following the rules.  Demonizing Romney is a losing strategy. 
The pundits say that Obama cannot win by focusing on his record.  We disagree.  We think saving Wall Street, saving the auto industry, saving the economy, 29 months of continuous job growth, declining unemployment numbers, a health care bill, that while flawed, improves the quality of life for 40 million Americans, ending the war in Iraq and killing Osama bin Laden are all aspects of a record for which the President can be proud…especially given the state the country was in when he took office.  Were their setbacks under Obama’s watch?  Certainly!  But returning the country to the very policies that got us in this mess is not the answer.
Romney’s solution for fixing the country’s problems is to cut taxes, increase defense spending and eliminate regulations.  For those with a short memory; these are the very same concepts that the Bush administration followed which resulted in the destruction of our economy and the instigation of the two longest wars in our history.  If Romney has any other ideas he has yet to share them with the public.
This is going to be a close race decided by 2-3 percentage points.  All of the polls indicate that this race is tightening with the candidates polling within the margin of error.  Long forgotten are the missteps and misstatements Romney made throughout the primaries.  Republicans are lining up behind their party’s nominee.  They may not like Romney but they will take him over Obama.
As Americans sit around their kitchen table trying to figure out how to make ends meet their focus is on the economy and their paychecks.  Romney’s success in making huge piles of money is something most Americans aspire to.  If Obama wants a second term he is going to have to convince people that his policies give them the best chance to attain that type of success.  He’s going to have to convince them that Romney’ plan will only continue their struggle or make things worse.
The President can win on his record.  Demonizing Romney just won’t work.                    

Monday, May 14, 2012

Another Teachable Moment

The folks at JPMorgan Chase decided to play craps with some of their depositors’ money.  They ran into a bit of bad luck and lost at the tables to the tune of $2 billion dollars.  The market responded quickly. Chase stock plummeted 9% costing shareholders $14 billion.
Nothing to see here!  Chase CEO Jamie Dimon originally referred to the impending dust up as a “tempest in a tea pot.”  After all the $2 billion loss is but a fraction of Chase’s $9 billion quarterly profits and less that one tenth of one percent of the $2.3 trillion in assets.   
But as analysts dug deeper into the details of the trade strategy it became apparent that the loss could be much larger.  The once defensive Dimon admitted to reporters that the loss would likely increase but would not say how much.   On Sunday a contrite Dimon told David Gregory on NBC’s “Meet the Press”: “In hindsight, we took far too much risk.  The strategy we had was barely vetted.  It was barely monitored.  It should never have happened.”   
This is the very type of risky business that Dodd-Frank sought to prevent.  But conservatives on the hill fought tooth and nail to water down the bill in order to appease their Wall Street constituents.  The result was a piece of legislation that came out of the fight having lost its fangs. 
Now Washington is all up in arms.  Stunned that such recklessness could re-occur they are chomping at the bit to bring the hammer down on speculative trading.  “You can feel it” said Andrew Ross Sorkin bestselling author of “Too Big to Fail”.  Jamie Dimon, once one of the staunchest and most respected defenders of limited regulation has been relegated to the sidelines.
There are still a number of banks that are too big to fail.  JPMorgan Chase, Bank America and Citicorp come to mind.  Many of them are even bigger today than they were before the financial crash in 2008.  Their investment strategies remain as unchecked today as they were back then.  Transparency is but a pipe dream.  Washington is now ready act.  One congressional insider referred to recent events as a “teachable moment.” 
We thought the teachable moment occurred in 2008.