Tax Cut + War = Deficit

Tax Cut + War = Deficit

This subject line on an email greeted me this morning from my friends at MoveOn.org.  It really bothers me.  Not because I am a "hawk" and am very satisfied with the status of our offensives in the Middle east.   (I'm not.)  Not because it makes a very powerful argument.  (It does.) What really bothers me is the presupposition that one is required to make in order to agree that it is true.  Now, if they had said, "Medicare+War+Funding female Jello wrestling in Antarctica= Deficit".  Alright.  Or I'm even OK with "Food stamps + Shrimp on a Treadmill Studies + War =   Deficit".  But please, please, please...if you're interested in Truth, stop telling us that Tax Cuts are a COST to government.   

That statement is wrong on so many levels.  To hold that view presupposes that the government owns all of our money -- all of it -- and simply allows us to keep a certain amount of it.  It presumes that anything that it "gives back" to us "costs" it something.  That is the only assumption that can be made if allowing us to keep what we think is our hard earned money "costs" the government something.  This is why so many people from the right and, to a lessor extent, the independent side of the political spectrum think that our President leans toward socialism.    

The only way to assume a tax cut a cost, is if you start from the view point that all resources are owned by the government.  Then, anything that you give to people becomes a "cost".  Only then can you can say that a Tax Cut "costs" the government something.  However, understand the importance of personal property and John Locke's argument of ownership: that we own our production and the results of that productivity.  This is ownership.  If you agree then you will also agree that the government takes from what "we the people" own.  It takes for many reasons, some of which are well intentioned and some reasons of which are necessary.  I'm OK with that...in balance.  To live in a free, (relatively) just society, it is good for the federal government to take funds to assure certain things are accomplished.  That must be balanced however, with the idea that government does not have the authority, much less the obligation to borrow beyond our ability to repay, in order to provide these services.  And we are dangerously close to that position in 2011.  When you cut taxes on the means (owners) of production, productivity increases.  When productivity increases, taxes increase: even if the tax rate goes down!  It's a proven fact with which even President Obama apparently agrees.    

Recall the debate between then Senator Obama and Hillary Clinton that Charlie Gibson moderated?  This was the Gibson debate that was "fair" according to the pundits.  Senator Obama tells in so many words that he doesn't really want to raise taxes because it will increase our revenues in the Treasury (Apparently he knows that it won't.)  He wants to raise taxes out of "fairness".

GIBSON:  You have, however, said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, "I certainly would not go above what existed under Bill Clinton," which was 28 percent. It's now 15 percent. That's almost a doubling, if you went to 28 percent.

Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20 percent.

OBAMA: Right.

GIBSON: And George Bush has taken it down to 15 percent.

OBAMA: Right.

GIBSON: And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down.

So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

OBAMA: Well, Charlie, what I've said is that I would look at raising the capital gains tax for purposes of fairness.

We saw an article today which showed that the top 50 hedge fund managers made $29 billion last year -- $29 billion for 50 individuals. And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That's not fair.

Breath taking.  He wants to raise taxes, not because it will increase revenue in the treasury which we desperately need, but because it's not "fair" that other people get to make lots of money.  Is it fair that the money that is taken from the wealthy can no longer be invested in assets that will require people to run (jobs) and new business for people to own? (jobs)  Is it fair that we are actually going to have less money in the treasury to pay our bills because the government would rather play to some intellectual notion of fairness? The reality that the President and Charlies Gibson agreed upon is that revenue in the government treasury GROWS when taxes are lower.  It's not fair to raise taxes, when lower taxes improve all of our lives. 

This is what brings us back to our original notion. Barack Obama and his  wing of the Democratic Party (and yes, some Republicans) want to control as much of our assets as they can, even if it is counterproductive to increasing our revenues.  Plans in place are well on their way to a maximum tax rate over 60%.  This isn't imaginative, congress works on this as we speak.  These tax rates rival the rates of the Jimmy Carter era.    Is it any wonder that one might suspect that it's not really about fairness - that contradiction smacks of control.  Controlling as much of the assets and dollars as possible and giving to "each according to his need".  Thereby explaining why MoveOn considers a tax cut - a "cost".

War + A whole host of Other things we Can't Afford = Deficit. 

The Atlantic explains Walker's Raison d'etre

For those hootin' and hollerin' about the work that Governor Scott Walker (and Mitch Daniels, and John Kasich) are doing to try to provide more flexibility to the taxpayers of their state to negotiate with public employee Unions the article by Joel Klein in the Atlantic Monthly should be something to read.  Ok, maybe it will be something to read only for those who aren't hootin' and hollerin' but have an open mind about the issues at hand.  Namely, the education of our students in the public school.  Joel Klein, a democrat, appointed to role of Chancellor for the City of New York Department of Education explains the impossibility of effective and efficient school operation with the existing power structure in public education.  Klein, on President Obama's shortlist for Education Secretary and a Clinton Administration appointee is no right wing hack.  He is a well connected public service employee who understands the ins and outs of politics.  You can read the full text or here are some excerpts (I suggest the full text.):

*Right now, if you were running for office, would you be more concerned with unemployment or education? Also, unlike terrorism, an educational crisis has a different impact on the powerful than it does on most of society. Their children, who are in private schools or elite public schools, receive a decent education, so it’s hard to get them fully engaged in the broader national debate.

*when making a lifetime tenure commitment, under New York law you could not consider a teacher’s impact on student learning. That Kafkaesque outcome demonstrates precisely the way the system is run: for the adults. The school system doesn’t want to change, because it serves the needs of the adult stakeholders quite well, both politically and financially.

*In short, politicians—especially Democratic politicians—generally do what the unions want. And the unions, in turn, are very clear about what that is. They want, first, happy members, so that those who run the unions get reelected; and, second, more members, so their power, money, and influence grow.

*The extent of this “no one gets fired” mentality is difficult to overstate—or even adequately describe. Steven Brill wrote an eye-opening piece in The New Yorker about the “rubber rooms” in New York City, where teachers were kept, while doing no work, pending resolution of the charges against them—mostly for malfeasance, like physical abuse or embezzlement, but also for incompetence. The teachers got paid regardless.

So here's the deal.  Governor Walker knows that if the school and the school systems are to have the flexibility to keep the very best teachers and delineate the very worst, then we must acknowledge that some teachers are really good, and others are...well...not so good.  President Obama in 2008 said: “The single most important factor in determining [student] achievement is not the color of [students’] skin or where they come from. It’s not who their parents are or how much money they have. It’s who their teacher is.”  A very astute observation, so why then in 2011 does the President criticize the bill that will more effectively allow the state to deal with teachers on a case by case basis and not assume that all teachers deserve equal pay? 

Collective bargaining against the profits of a corporation are one thing.  It's fairness arguable to some extent.  This is an entirely different issue.  When the teachers union comes up "against" it's foe, the foe it fights is the Tax Payer, the citizen of that state.  That state, produces no wealth, only services.  There are no "profits" to divvy up.  If a Governor, "plays nice" with the unions, he wins politically.  He wins untold thousands of votes from member teachers and union employees.  He earns untold thousands in campaign contributions from same.  He gains untold credit for running the government smoothly.  Where exactly is the incentive for those who negotiate on the behalf of the "people" - incentive to play hard ball and get the best deal possible?  This incentive doesn't exist.  Which is why it is very seldom you have a personality willing to risk the political capital to simply do the right thing and negotiate hard for the people of the state.  Hence, we end up with promises being made far beyond the availability of our state treasury to manage our debt - like that of the federal government debt - goes up exponentially.  Unfunded liabilities put to another day.  Eliminating the rules for collective bargaining will allow "the people" a stronger negotiating position, so long as the negotiator is strong enough to use it.  No matter the cost, who will pay this debt?  Our kids.  They get shafted with the quality of education, and they'll get to pay the bill too. 

The status quo isn't working for the student or the tax payer.  It works only for the unions and it's constituency.  Joel Klein reminds us of that and offers some insight on where we have to start to get to a solution.   

Benjamin Netanyahu - Congressional Speech, May 24, 2011

http://www.cspan.org/Events/Israeli-Prime-Minister-Addresses-Congress/10737421714-1/Thursday, May 24, 2011 Prime Minister Netanyahu has been given the opportunity to speak to a full house of congress.  He outlines the history of friendship that Israel has with the people of America. He also offers effusive praise to the United States of American for it's full throated support in the face of it's daily turmoil.  He touches on the beauty and efficacy of the state of Israel, the only democratic form of government in the middle east.  He praises the work of the young protestors in the middle east and encourages the growth that democracy would bring, even to Palastine.  He identifies positive change that has occured in the Palestinian territories economically.  And of course, plainly states that a relationship with Hamas, a nation plainly determined to bring for the destruction of Israel, cannot stand  He points out the irony related to the Arab nations which deny their citizens the right to speak out against it's own government or to convert from Islam, all the while demanding that Israel, who offers it's Arab citizens full rights of citizenship, freedom of speech.  To wit: "...Courageous Arab protesters are now struggling to secure these very same rights for their peoples, for their societies. We're proud in Israel that over 1 million Arab citizens of Israel have been enjoying these rights for decades. Of the 300 million Arabs in the Middle East and North Africa, only Israel's Arab citizens enjoy real democratic rights. Now, I want you to stop for a second and think about that. Of those 300 million Arabs, less than one-half of 1 percent are truly free, and they're all citizens of Israel.."  He even weathered some good old American protest on behalf of the Palestinian plight.


Upon the acosted protestor's being ushered out of the building he deftly pointed out that we should "wear as a badge of honor" the fact that we can protest like the young lady just did.  Indeed, had she done so before Parliment of Tehran or Tripoli she would have been not only removed, but summarily extinguished. 

 To read the full text click here.  To see the video click here.

Two Fine Days, and Travesty each

It was a great day to be alive.  Out and about for the afternoon, and party time on late into the evening.  But at midnight of this fine day, October 7, 1998 the life of an energetic, amiable, fun-loving young man was brutally snuffed out.  Under the guise of offering a helping hand, would be burglars picked up Matthew Shepard at a bar gave him a ride and, at some point brutally beat and killed him along the side of the road.  18 hours later a cyclist would find Mr. Shepard, propped up like "a scarecrow" along the side of a lonely highway in rural Wyoming.  During this trial witnesses stated that the young Mr. Shepard was targeted because of his sexual orientation.  A travesty. 

Not long ago in Margate, UK Dr. Richard Scott walked into work on a day that seemed like any other day.  He reviewed his calendar, saw a few appointments and then saw the patient that would represent the possible termination of his stellar, unblemished medical career as a general practice doctor and surgeon.  For on that day, another young man would walk into his Bethesda Clinic.  No small irony that the facility is named after the biblical pool where a man was healed by Jesus Christ.  For on this day, Dr. Scott would find that an attempt introduce a patient to that very same Jesus, would threaten his vocation, avocation and way of doing business.  A travesty.

So what do these cases have in common?  The law that was passed by our congress in response to Matthew Shepard's brutal injustice is House Bill 1592.  The Local Enforcement Hate Crimes Prevention Act of 2007.  It is the US version a similar law in the UK and the persecution, and perhaps, prosecution of Dr. Scott will be the logical extension of our HB 1592 if it is not checked.  Advocates for 1592 indicate that the bill specifically provides for free speech, but as with a good economic policy (opinion alert!) there is a trickle down effect that will be powerful and, combined with Patriot Act authorizations could easily be construed and result in the same persecution in the US that Dr. Scott now faces in the United Kingdom.   

There is no justice for the death of a young man in the prime of his life.  None.  This law will not provide justice for his death.  This law will merely start the proverbially stone rolling down the hill of intolerance toward those who hold to what the government determines to be intolerable.  The case of Dr. Scott is only the first of many representing where government will take this law, unless we as a people use our power to check it's power.  If we don't, our power to speak against it will soon be gone.  A Travesty. 

AWKWARD: You go public, I go public. Love, Bibi

Awkward starts at 7:48.  Awkward for the President.  Awkward for Israel. Awkward for us.  Just awkward.  This week President Obama insisted upon going public with a partial policy before the world that, at one time was a baseline for closed door negotiations.  Israel pleaded with the President to  focus on the supposed "Arab Spring" or some other important issue, but the administration declined and went public with their demand.  This left Prime Minister Netanyahu left to clarify, in no uncertain terms, and define the other absolutes which the President chose not to highlight.  It was awkward for the President.  It was awkward for us to watch.  It had to be done.    President Obama willfully, perhaps unwittingly, chose to be provocative by bringing something into the public eye that has always remained behind closed doors.  By doing so, the President created a scenario where Palestine will hold that the President stands for unilateral sacrifice to get 1967 borders. 

There are those that argue that President Obama hasn't changed policy at all.  And it is true that 1967 borders were a baseline for Clinton, a baseline for Bush and until now, a baseline for the Obama administration.  What the administration would appear to not understand is that you don't publicly state what the baseline will be in a forum where you cannot establish the entire baseline.  To wit:  You cannot have a return to 1967 borders with "swaps" without the host of other conditions that must be accompany this baseline.  To the Presidents credit he did try to outline the non-soquitur that is Palestine relationship with Hamas and the improbability of US support for the UN's intent to vote on Palestinian sovereignty.  What the President Obama has done, that other administration did not do is bring to the public eye where negotiations, behind closed doors, are supposed to begin.  Making the statement that the President made was counterproductive because it offers the Palestinians what they want, without requiring what past administrations would have required to achieve that return to borders with a swap.

We can tout the support of the Anti-Defamation League and a host of other supporters of the state of Israel that have praised the work of President Obama in his speech detailing his "return to 1967 borders" to a large contingent, including the Press, at the state department.  The phrase had no place in public dialogue because it makes it more difficult for the Palestinians to give up - something, when seemingly the President of the United States is already saying publicly what the Palestinians should get.  This appears to be a unilateral statement because of what the President doesn't say.  This faux-pas in negotiating tactic is really what is wrong with what the President has done.  As always he means well, he just doesn't seem to get it.  Alan Dershowitz, a fairly well known attorney, and not exactly a right wing ideologue criticizes the President's quite effectively here .  Dershowtiz goes even further in this interview admitting that inspite of voting for the President, Obama's  foreign policy clearly demonstrate a "sophisticated and realistic approach to negotiations which he doesn't seem to have."  Dershowtitz rightly points out the propensity for the President to not understand effective negotiation technique by recalling the Presidents equally unilateral demand for the Israeli's by demanding earlier in his term that the Israeli's impose a "freeze on all settlements".  Fortunately, the administration understood it's mistake and this demand was dropped.  Hopefully, there will be a way for our President to clarify his position on this episode as well.  It seems that there are lots of our congressman asking for clarification - read: retraction - from our President as well.

It would have been nice if neither the President, nor the Prime Minister would have had to bring up the topics they did - but the President took the lead, chose the provocative - and left Mr. Netanyahu no other choice but to attempt to mitigate the damage and clarify.  Awkward, but necessary.