in defense of regulation

Today’s Star Tribune has an editorial that embarks on an un-enviable position in today’s United States: defending and arguing for more government regulation. The article is not packaged to make friends, but that doesn’t make it’s message any less accurate: “America suffers not from too much regulation, but from too little.”

It’s time for a new accounting of the costs and benefits of regulation.

String of crises has one solution: More Regulation. Mike Meyers, Star Tribune.

Republican dogma betrays a fundamental misunderstanding of capitalism. That’s odd for a party that’s supposed to be the bold cavalier of business. Instead, it’s cavalier with the facts.
Left to their own devices, capitalists are better at making money than at looking out for the other guy. The United States grew rich in the Industrial Revolution, but learned the price of no-holds-barred capitalism.
Somehow, today’s Republican Party either has forgotten the lessons of history or bet that others have.
Bankers once openly contrived with industrialists to corner markets, acquire or bankrupt rivals, and keep employees and customers under their thumbs.
Theodore Roosevelt, a Republican, caught the public mood when he called the robber barons of his day “malefactors of great wealth.”
…
For markets to work properly, they need clear rules and watchful referees.
But Republicans consistently focus on the costs of regulations rather than the benefits. Here’s a line from the 2008 Republican platform:
“Our approach to regulation — basing it on sound science to achieve goals that are technically feasible — will protect against job-killing intrusions into small businesses.”
Somehow, Republicans rarely see sound science through the same prism as actual scientists. Technically feasible sometimes gets confused with technology that can be bought at zero cost.
To be sure, regulators never should publish 2,000-page rule books when 20 pages, or even 200, would do. Indeed, unnecessarily complex regulation can provide cover for corporate lawyers to challenge or evade rules and laws for decades.
But trusting the businesses to do right by society on their own ignores their prime reason to exist — to make as much money as they can in as short a time as possible.
Markets have a term for a good-hearted capitalist who sacrifices profits for clean air, pure water, protected workers and safe products when rivals are not required, by law, to do the same.
The term is “bankrupt.”

David Brooks on America’s Tribes

The truth is, members of the upper tribe have made themselves phenomenally productive. They may mimic bohemian manners, but they have returned to 1950s traditionalist values and practices. They have low divorce rates, arduous work ethics and strict codes to regulate their kids.

Members of the lower tribe work hard and dream big, but are more removed from traditional bourgeois norms. They live in disorganized, postmodern neighborhoods in which it is much harder to be self-disciplined and productive.

That is TRC’s ever-favorite “conservative” editorialist, David Brooks, writing about the widening gaps between American tribes in his piece yesterday, titled, the Great Divorce.

Brooks clearly is enamored by his idea that American culture is tribal, not classist, and he runs and runs and runs with it. As a major news and opinion consumer, TRC thinks it can be pretty easy to notice when a writer has come up with something he or she thinks is quite clever, and, maybe doesn’t think it all the way through. Thus is Brooks’ dilemma.

It looks today as though David Brooks’ piece is causing a bit of an internet uproar. Politico has the rundown. The main complaint seems to be that Brooks, that harbinger of east-coast 1950s conservatism who longs for America to regain its glory by acknowledging it is losing its moral compass and soul (or some such nonsense), is oozing with bourgouis elitism and condescension.

So, internet, I have to ask: Why are you surprised? This is David Brooks. He is a standard upper-class (ahem, upper-tribe) ideas man, who when it comes down to it, is thoughtful, but clueless about modern life. I just assumed everyone knew that was David Brooks m.o. Brooks work in the last few years at the NY Times has represented only a swan-song to golden era nostalgia.

Even Brooks’ conclusion that we need a big national service program to bring the upper and lower tribes together (I agree), falls apart in the need for one harmonious tribe that shares values and practices. He misses the entire point of what comes before in his piece: the tribes don’t have much in common, we don’t all need to share the same practices and institutions and values, and besides, the postmodern neighborhoods of the poor are probably too confusing to find their way to each other anyway.

Marketplace Morning Report Reminder

As the 2012 Election slouches towards November, I thought I’d put up a quick note  from this morning’s Marketplace Morning Report (an essential part of every TRC morning, and one I recommend you add to start your day).

Jeremy Hobson and Josh Brown, of Fusion Analytics, were discussing yesterday’s NH Primary, and Mitt Romney’s warning that President Obama is leading the United States into European-style Socialism (adorable). So Hobson asked if the folks on Wall Street agree, and think that Romney would be better for the economy.

Said Brown: No. Brown called it the ‘dirty little secret’ of American politics: the president, no matter who it is, cannot improve the economy. He can make it worse, but there is actually nothing he can do to make it better. (When Marketplace puts up this transcript, I’ll post the quote, but this paraphrase is pretty close).

I’ve made this argument before, and still agree. The President is capable of ruining the economy, but that doesn’t mean the President can do much to repair it. There’s no reason to think that had McCain won in 08, we’d be better off, or to think that if Obama loses in12, we’ll be better off. Because, frankly, politics doesn’t improve the economy.

**UPDATE: Marketplace has the piece up on their website, and here is Josh Brown:

 Here’s the dirty little secret: the truth is, they could make things much, much worse, but there’s very little they can do to improve things. So typically, when you look at who’s in the White House, who controls Congress, it’s all a myth — there is no correlation. No one is any better than anyone else between Democrats and Republicans.
As a matter of fact, if you would have said back in 2008, I can’t believe they’re going to elect Obama — he’s anti-business, he’s anti-capitalism; in the meantime, the S&P 500 is up over 50 percent since January of 2009 when Obama was sworn into office.
So I think the president’s impact on the economy is not quite what politicians would like it to be.

Student Debt and the Passion of a Lost Generation

Student debt can be a crushing burden. Decisions one makes as a youth can potentially weigh down an entire life. Often, students are told by parents, teachers, and university professors to pursue what they love, that passion is more important than money. And in the walls of a university, this is an appealing argument. Outside school, too, this should be the driving force of one’s life.

If you were a college student in the past 10 years or so, and are middle-class or lower, you probably took out student loans to pay for that degree. And if one loves books, or art history, or 13th century religious iconography, following that advice with passion will cause problems when you have to pay off those student loans. When you graduate, excited about the world and its opportunities, do something big and interesting. Because after that, you might find that the world doesn’t want to pay you, or at least not very much, to pursue your passion.

This is our own fault. Believe it or not TRC does believe strongly in personal responsibility. If you took out a 100K in student loans, you are responsible to the institution which borrowed you that money. It must be paid back, even if, at 25 years old, you realize that you made a terrible decision at 17, and will pay for it for the remainder of your adult life. Alas. These are the rules, which, even when soul-crushing, are still the rules.

The US is in an a difficult place regarding student debt, and it could have serious consequences. The nation now carries more student loan debt than it does credit card debt. The costs of tuition have been rising at staggering rates, and show no signs of tapering off, and in the meantime wages for graduates are decreasing. Student debt, it is being said, could drag this economic recession on and on, and leave a generation of college students unemployable. By year’s end, a projected $1 trillion in student loans will be outstanding in the United States. A trillion dollars. How is repayment going?

 Barely more than a third of loan holders are actively paying down their debts, indicating that the burden may be too much for many. What effect will the ballooning student debt load have on the economy in the long term? According to Alan Nasser, professor emeritus of political economy at Evergreen State University, the American dream is about to become the American nightmare.

That doesn’t sound good. Too many people are having too hard a time surviving and one cause of the difficulty is simply that middle-class kids did what they were told middle-class kids do: go to college. College is a benefit, and it should be encouraged. The college years are the best years of one’s life (they really were), and the intellectual pursuit is among the greatest endeavors of human existence (truly). It is not culture or society’s fault that millions of young, highly educated people are unable to get a job. But culture is not guilt free, either. There is plenty of responsibility for this $1 trillion dollars. The question should be, what are we going to do about it so it does not erase a generation?

Who knows. Are there any viable solutions? At Occupy Wall Street there is a growing cry for student debt relief. There is an argument to be made for debt forgiveness: if we forgive the crushing debt burden, individuals will have money to spend on goods and services rather than sending their money (or not sending money, as the case may be) to pay off interest on student debt. Mrs. TRC and I have discussed this. We are doing well in comparison, working and able to meet our payments. But if we didn’t have to make the monthly student loan payment we would immediately: buy a car, buy a computer, re-do our kitchen floor. Would it help if we opened up what little capital is available to Americans and allowed them to direct that money towards economic recovery? It seems reasonable, but I’m not economist.

Either way, that’s not likely. And no one should be surprised that our government does not forgive a trillion dollars in debt to its own citizens. It’s not our style, and it may not be the best solution anyway. A strong argument against simple debt-relief is that it is unfair to people to worked tooth-and-nail to pay their education off and did not accrue debt. This person, the argument goes, did not need a private school education, and found a way to pay for it without loans. That is true, and that individual deserves the praise of our society; that person is a role-model. I think there are too few of those individuals; I wish I had been one.

Another plan is out today from President Obama to help ease the burden of student loans. The President’s plan “allows borrowers to cap their loan payments at 10 percent of their income, a significant reduction from the 15 percent cap in current law. And the plan would allow for loan forgiveness on a remaining balance after 20 years of payments.” Pay 10% of your income for 20 years, and the rest is forgiven. That seems generous. Whether it will work or be welcomed remains to be seen.

There is also a third option that TRC has thought of lately, and it’s terrifying, but no less realistic. It is said that if you do not find a job within five years of graduation, the odds of ever working into the competitive position you could have decrease significantly (I heard this on MPR, and am looking for the source). That is going to be a lot of students in the wake of this recession. And it will not be just liberal arts majors who want to be curators or book-store owners, but law students and scientists, and individuals from every field with graduate degrees, and thus more loans, because why look for a job when there are none? Better to keep learning and acquiring degrees to be more competitive when jobs come back. One may disagree with this line of thinking, but it is not uncommon and results in a lot of MAs, MSs, PhDs, JDs, etc.

Millions, probably. And the vision of these over-burdened and underemployed college graduates making coffee around the nation will eventually, finally, demonstrate what people around the country have known for a long time: the university system needs to change. The system cannot be: take out loans to go to school to get a job to pay off the loans you needed to go to school. That is a heartless cycle, and will destroy too many people in its wake.

Or we’ll just stop attending higher-education. The US will continue to run colleges and universities that compete with the best institutions in the world and continue to increase tuition to meet costs, but Americans will not attend those schools, at least not the majority of Americans. And this would be a loss of monumental proportions. Learning what you are passionate about, like your teachers said, is what college is for, and learning how to follow that passion for the rest of your life should take priority over monthly interest payments.

GOP can’t actually want a bad economy…right?

I’ve been curious of late as to how Republicans respond to statements like this:

Of course, with their single-minded focus on defeating Obama and controlling both houses in Congress, Republicans most likely will continue to block the most effective job-creating initiatives. 

I’ve said some variation of this a couple of times, and the sentiment is pretty common from the Democratic and liberal spectrum in the United States. The charge is, essentially, that defeating President Obama in the 2012 election is more important than aiding in economic recovery in the United States, right now. It is similar to the idea that liberals wanted Iraq to continue as a clusterfuck during President Bush’s years, to continue to embarrass his unjust war. And some liberals probably did want to see that. But not many, and the rest of us made a strong argument against that kind of barbarism. Now, the GOP is receiving a similar attack.

This is a pretty serious charge, and one that should cause Republicans to get defensive and start working towards improving the economy. Which I don’t see happening. I understand its all politics, and that President Obama presented a Jobs Bill that was never going to pass in the first place. But there are bipartisan ideas on how to create jobs being presented, right? And they are not being passed, right? Presumably everyone in both parties wants the economy to improve (except maybe fringe folks on both sides), and I trust that the Republican individuals in congress want unemployment to go down, and jobs to go up. But the GOP doesn’t even seem to be trying very hard to counter the accusation.

So how do Republicans respond to the charge that they prefer a bad or worsening economy to improve their electoral chances?

philosophical queries about Labor and Economy

Labor day weekend got me thinking about Labor and the United States (surprise), and prompted a few queries that I’ve been considering for the past few months. Specifically, two separate trains of thought have been brewing, and I think that they are (or should be) related.

First. There has been much written recently regarding how the “green economy” that President Obama envisioned rescuing the US from the recession has failed, and that green jobs are not the future, but political hokem that provides great speeches but little results. David Brooks, this morning, for example:

“In his 2008 convention speech, Barack Obama promised to create five million green economy jobs. The U.S. Conference of Mayors estimated in April 2009 that green jobs could account for 10 percent of new job growth over the next 30 years. Alas, it was not to be. The gigantic public investments in green energy may be stimulating innovation and helping the environment. But they are not evidence that the government knows how to create private-sector jobs.”

Or you could just call it like they see it, as  Jennifer Rubin at WashPo does, decrying the “green jobs fetish” of President Obama, and hoping to see an end to the “cotton-candy policies” of the liberals. Well it is true. Green Energy and Green Economy have not created as many jobs as are needed to facilitate a recovery from this recession; a recession not caused, by the way, by the growth of the green economy.

Second. On NPR, yesterday, I heard about 10 seconds of an interview with E.J. Dionne, (full disclosure: the Dionne and David Brooks Politics Chat on Fridays is my favorite NPR segment of the week). The interview was in conjunction with his Sunday Op-Ed: The Last Labor Day, where he argues: We may still celebrate Labor Day, but our culture has given up on honoring workers as the real creators of wealth and their honest toil — the phrase itself seems antique — as worthy of genuine respect.

In this interview, Dionne said something to the effect that the historical notion of Labor Day in the United States is antiquated, because the United States is no longer populated with laborers but with consumers. Even though most Americans actually do work blue-collar, labor-intensive jobs, these jobs fail to be a part of the vocabulary of modern culture, in part because blue-collar, hard-working America is no longer seen as celebratory in-itself, but as a way for consumers to earn money to consume things, and to move up in the world, (boot-strap America, as I call this notion). This lack of focus on labor is not just in the real world where the traditional notion of the laborer is now recession-unemployed (and unemployable?) but even in media and news coverage and popular culture.

To illustrate this point, E.J. Dionne asked listeners to consider Hollywood cinema. One need not go back too far to see regular film portrayals of hard-working low-income Americans celebrated for doing the work they do; the absolute pinnacle of working-class celebration in film is mentioned by Dionne, and has a special place in American cinematic history, and my heart: It’s a Wonderful Life. This today has (mostly) disappeared (Dionne rightly claims that John Sayles still makes films). Dionne cites two “blue-collar” movies that have been successful out of Hollywood in recent years: Good Will Hunting and The Fighter. Both are set in poor, hard-working, day-laboring Massachusetts, and show the plight of two exceptional men who do not belong in the life they are born into, and thus attempt to rise above. They are stories of upward mobility, according to Dionne, not celebration of the worker. Though both of these films are far more complex than this paragraph denotes, I think the point stands: We do not make movies about Ben Affleck’s loyal friend who will toil the rest of his life in construction while his buddy moves on to money and the girl. Maybe I heard more than 10 seconds of the interview.

This all got TRC on to various and sundry matters of inquiry. But here are two thoughts. Work is a good in itself, right? Regardless of the added value later of that which is manufactured for consumption or services that are rendered? Shouldn’t we remember the words of Abraham Lincoln (as quoted by Dionne) when we think about our day-to-day-lives: “ Labor is the superior of capital, and deserves much the higher consideration.” Capital is good, and consumption is good, but the Horse must come before the Cart, no? Otherwise workers are commodities, unions unnecessary, and rights lost because the capital is point, not the person.

But this leads to the second, and more difficult thought that has been stewing at TRC for the past few months. As people decry the green economy a failure, and find that the “green future” cannot provide the economic needs of the country, or the world, should we not ask: do we need to reevaluate the expectations of an employed, functioning economy? Are we at a point where the post-recession economy will not even resemble the pre-recession economy? These are philosophical questions, but they seem extremely important at this juncture in time.

Take renewable energy. Renewable energy requires manufacturing, assembly, installation and maintenance, just like dirty energy. It does not require fuel extraction, which is good because coal mining is a dangerous business. But it is a business that employs a lot of people. Wind and solar do not require daily employees. They are operated by a single man in a computer somewhere in the region who watches the energy demand and manages the generation needs. If we were to create a new infrastructure of renewable energy and high-speed rail and broad-band internet, there would be an influx of millions of jobs. But then these tasks would be accomplished, and then what? What should the future economy look like, beyond recovery from this recession?

Perhaps the green economy will not be able to sustain the US after recession because there will never be enough green jobs. Not because the green economy failed but because the green economy just does not need as many hands to operate. That’s not an endorsement of fossil fuels, but if its true, it means we need to find something else to make meaningful work. And this is just one field. Efficiency is rising in all sorts of tech and manufacturing fields. Robotics will only continue to increase productivity while requiring fewer human hands. And what happens when A.I. becomes A.I.? Which will happen, some day. These are maybe philosophical questions today, but will be actualities in the future, and must be accounted for.

We shouldn’t bandy about trying to destroy renewable energy and the green economy because it’s different from the past like a bunch of luddites. Rather, shouldn’t we re-imagine a new economy, where the future is prioritized over the past, and people are prioritized over capital, and labor means working for something that means something? All while moving society, and the economy, forward instead of backward? Wishful thinking? Perhaps. But I think we can use some wishful thinking in this country right about now, as we pass yet another Labor Day in the midst of economic recession. What this future economy looks like though, is beyond TRC’s current imagination. I guess the United Federation of Planets provides one option (seriously.)

The ship of state will sail past next year.

I like Ezra Klein a lot. He is smarter than the average policy wonk, and he has a way with words that highlights the absurd of politics while getting at the heart of policy. Today, though, I read Klein’s article about President Obama’s upcoming jobs speech and it left me a little torn. I agree with much of Klein’s predictions about the President’s job proposal, but the impact of what Klein writes represents something much worse than the outcome of a speech that, really, few people will see.

Unfortunately for Obama he will be competing for air-time against the opening night of the NFL, so I imagine he’ll get about 162 viewers, mostly bloggers. But it won’t matter if you miss it, the script is already written. Here is Klein:

Here is what will actually happen: President Barack Obama will give a speech. It will include a mixture of ideas the administration has pushed for some time (extending the payroll tax cut, investing in infrastructure, passing trade agreements) and some modest new additions (a tax cut for companies that hire new workers, for example). Relatively few people will tune in to the speech; of those who do, most will be either committed Obama supporters or equally committed detractors.
…
A realistic script…takes the form of a news release issued by House Speaker John Boehner’s office on Aug. 17. All you really need to know is the title: “Statement on Announcement of President Obama’s Upcoming Speech on Jobs.”
Consider that for a moment: Where else but Washington would you see a news release responding to an event that hasn’t occurred and statements that haven’t been uttered?

It’s not difficult to see the cause for despair. But despite the overwhelming evidence for rage, I am generally optimistic about the US  Government, because I believe in what we have established as the Federal Government. It’s the work of many years, shifting glacially and at great cost. But slowly the ship of state sails on, and improves. One of the best traits of the federal government, however, is that it allows for everything to utterly breakdown and achieve nothing. So instead of having a 2 (or more) party system where leaders work together to forge compromise that propels the nation forward (to anywhere), we have 2 parties that absolutely cannot STAND each other. Animosity at the highest levels makes even the simplest task hard. Rather than pick up the phone and discuss when to give a speech, for example, party leaders engage in a public spat  that makes our entire country look petulant and irresponsible.

For these reasons, I am not optimistic about President Obama’s speech. The speech won’t create jobs. The best outcome will be a political success, and the odds of  even that must be rated pretty low.

Obama’s speech will achieve nothing. It will go nowhere because it has nowhere to go. A speech can rally the base, and maybe even temporarily change the topic in the news. But it can’t change the fundamental fact of politics right now, which is that the two parties disagree on the most profound question in Washington. It’s not: How do we fix the economy? It is: Who should win the next election?
…
This is the part of the column where, as a pundit, I lay out my three-point, politically implausible plan to turn the situation around. This is where I tell the president to fight harder, or take his message directly to the people, or fire up the lethargic Obama for America organization. This is where I remind the Republicans that they supported tax cuts as stimulus all through the last decade and even into 2009; where I beg them to put country before party; where I warn them that everything they are doing unto the Democrats today will be done unto them tomorrow. This is where I summon history to show how FDR or Reagan or Truman broke a similar logjam.
But such exhortations — and I am guilty of writing variations on these many times over — are pointless today. The facts are what they are. And what they are is depressing and unlikely to change.

This speech may achieve nothing, Ezra Klein, but the facts are not only likely but guaranteed to change, because we have a strong system built on change. It may seem impossibly far away, but an election will come, and it will have consequences, and things will get better, and the economy will improve, and one way or another our Federal Government will get back to the good old days of fighting about social issues in the Chambers, maybe having a beer after the session, and actually creating policy. This is what TRC remembers when the politics gets so out of control that nothing ever seems like it will be accomplished in D.C. ever again. It might be naive, but I’ll take it.

So while President Obama speaks to an audience of a few politicos about how to create jobs (a task no president can actually achieve, in my opinion), and the Republicans continue to throw science under the bus and blame the EPA for everything from high-priced gasoline to a jobless recovery (Klein:”we have 9 percent unemployment because the global financial system collapsed, not because federal inspectors are overly concerned about coal particulates in the air”), remember that this, like everything else, is only temporary.

Update: A conversation resulted from this post that leads me to a clarifying point. TRC does not think that everything will be fine simply by waiting for things to turn around, we are not accomodationists to the picture of government being painted by certain minorities within the parties. The state of the Republican Party is terrifying to behold, in our opinion, and things could get much worse, and be bad for a long time. For that not to happen, the better half must galvanize and show the dangers that the current Right pose to the constitution.

But the ship of the US Federal Government, we are saying, can contain this Tea Party, like it managed the last one, and will the next one.

You make money from money? So what do you DO?

I understand the differences between rich and poor pretty well, I think. For the most part. But what I don’t understand is the difference between making money from money and making money from a job.

This is a distinction highlighted by Warren Buffett, billionaire and (apparently) stand up guy in his op-ed in the NY Times today. In his editorial, titled Stop Coddling the Super-Rich, Buffett calls for an immediate tax increase on households making over $1 million, of which there were 236,883 (in 2009), and an even greater tax increase on households making over $10 million, of which there are 8,274 (in 2009).

This is all well and good and I totally agree. I actually think we should lower the bar from $1 million. But calling for higher taxes doesn’t need to be unpacked. It just needs to happen.

What really needs to be addressed in this conversation, in my opinion, is this: How have those individuals who have become super-rich by manipulating money gotten super-rich? The distinction as Buffett calls it is between people ‘making money with money’ vs. people who ‘earn money from a job.’ This is certainly not an anti-wealth question. When companies like Apple make piles of cash, who can blame them? They make a product that a generation of consumers want to buy and as such they earn money beyond people’s wildest dreams. Good for them. Wealth is not the problem, but how it is made is.

Bridging this gap might save the country, by calming the animosity that many (myself included lately) feel when they see so much wealth amassed by what, in the opinion of many (myself included) does not count as work, i.e. does not add anything to the United States (except more wealth for wealth’s sake). I’ve heard over and over how much profit companies have been making in this recession, and how much money is out there, but if a corporation makes a dollar, and a trader trades that dollar, and no one ever sees it, is it even a real dollar?

I don’t want this opinion of mine to be correct. I want to think that the wealthy money-movers are bringing something of value to the country other than wealth for the wealthy. But it’s hard not to be frustrated to hear about the low tax rates for these folks, when these  are the people who can most afford to pay a higher rate. And they can afford it. Much more so than the people I know.

The people I know, myself and my families and everyone in the social/cultural/economic spheres that I have ever inhabited, everyone has always worked a job, and gotten a paycheck for that job (or not gotten paid because it was volunteer work). This runs the gamut from farming and construction to desk-job at a clean energy policy shop to health-care to programming pacemakers. Jobs that work towards bringing something actual to the nation.

The  people out there (a lot of them, it turns out) who don’t quote have jobs unquote, but who manipulate money and then get more money have always been around, and always been silently moving behind the scenes, getting coddled by the government. Now they are a part of the national conversation, and it’s important that we know what the hell they actually do and what it does for the country. I don’t like not understanding what this means, and thus feeling antagonistic towards these folks. But lately I have felt this way.

So please, reader, help me understand what making money from money means, and who it benefits. Why shouldn’t money made from money be taxed at higher rates? Why should the wealthy not pay payroll taxes? These people obviously can pay. This piece from Buffett is not unique. The rich can pay, so why won’t we ask them to?

A Government of the People, unfortunately

Hopefully this won’t turn into a rant.
We have a political circus that is overflowing past the aisles, out the entrance, and into the streets. Why? Because raising the debt ceiling can only occur now if spending cuts are attached. That’s where we are, better or worse. And on the issue no one will back down, it seems, and no one will retreat, only advance. Two sides with advance only modes leads to, what? Mutual destruction? The rhetorical  destruction alone is getting seriously out of hand. These may just be editorials, but they are a dime a thousand, decrying the end of American days. I’m not always a reasonable political person, but there are limits.

Roger Simon, over at Politico, has a pretty damning article up today, calling out both sides on this debate, claiming a lack of patriotism, and too much hatred in our politicians. Serious accusations, but unfortunately, not all that hard to understand.

That’s right. Too many Republicans refuse to raise taxes on the rich, no matter what happens to this country.
And too many Democrats refuse to consider cuts in entitlement spending, no matter what happens to this country.
That’s the extremism crisis, which makes people willing to follow their ideologies off a cliff. Are the two sides equally to blame? No, I don’t think so.
But it really doesn’t matter because it has led to a paralysis that has brought us to an economic abyss. Talk to lawmakers about economic theory? Heck, some of them don’t even believe in evolution.

Simon’s last paragraph gets at the heart of TRC’s exhaustion, rage, disbelief and madness over this whole debt ceiling standoff. We have somehow created an environment where in all capacities and on all issues, there is a choice  to believe something or not, regardless of fact or experience. It may be true that we do not know what is going to happen if we pass Aug. 2 without getting a deal done on the debt ceiling. But one of the options seems to be pretty catastrophic.  Why risk that based on the fact that you don’t believe that will happen? That’s a pretty big risk. Especially if, as some believers say, the doomsayers are wrong because no one knows what will happen?

A friend of mine yesterday compared this situation to a man having tingling in his left arm, and chest pain and dizziness. He thinks about these feelings and says: I don’t believe I’m having a heart attack so I’m going to just sit this one out instead of going to the hospital just in case. And by the way, the hospital is across the street and you have free health care and there is a doctor waiting to see you. But, maybe its nothing, so I’m not going. We’ll wait and see what happens. In this case, you believe wrong. Your belief does not matter, your symptoms warrant a trip across the street.

So why can’t our nation cross the street? How did we get to such intransigence? Where belief in one’s own knowledge and rightness can trump anything anyone might say? Roger Simon reminds us:

They scream because they are afraid of losing their jobs. They don’t want to compromise, even if compromise would be best for this country and would avert a financial catastrophe.
And who elected these bozos? We did.

We elected a divided government filled with politicians convinced they know what’s best. And we expect those politicians to stand firm in their values, because in today’s USA, compromise is for the weak. How this happened, I don’t know. Maybe it isn’t new at all. But there is something different in the air now that the circus has taken over the streets. Something smells different now, and pretty soon it will reach a point where it won’t matter who is “right” on the issues, or what one “believes.” It will just be a disaster. This disaster is not inevitable. But it seems more possible every day.

So what should we make of this? I have political values, strong ones that I believe should be upheld at almost any cost. But only almost. There is no purpose in holding on to political principle to the point of government failure. Extended government paralysis doesn’t serve anyone’s political vision. This is why compromise is also a virtue, and should be considered as such.

In the debt ceiling argument you have two political visions: that of President Obama and that of the Republican Party (I know the GOP have about 14 political visions, but for simplicity’s sake…).  The political analysis of Relative Comment has determined that a truly substantive victory for either side is not likely, since both parties are pretty much infuriated at the failure of of the opposition to see how clearly the light shines on their side. So the most Obama or Boehner & co. can strive for is a largely political victory; and if they are lucky, it will be accompanied by a few substantive points.

There may even be a way for both sides to get political victories out this mess. But remember: our government, on some level, has failed by putting itself in a position where political victories are the most we can hope for. I hope my side of the political spectrum wins the political fight. Because losing the political fight yields the ability to move the nation towards one’s vision for government. You may have to compromise the substance on this fight, President Obama or Eric Cantor, but if you do not, and you lose the political fight as well, and lose the Presidency in 2012, you didn’t just lose this fight, you gave away a chance to move the country towards your political vision. This is the kind of cold political calculus that I abhor. But we as a voting nation put ourselves here. We shouldn’t forget that we elected these stalwarts to represent us, and we have to live with the results. Unfortunately, we are mostly a government of the people, and this is us.

Finally.
The Relative Comment is not in the business of making political predictions, so we’ll just say this to our political leaders: Don’t give up on fighting for a country in which you believe. But don’t fight for that vision to the point of destroying the chance to bring that vision to fruition. That would truly be a loss.

When does wealthy become rich?

What is middle-class American? This is an honest question, and seems ever more relevant as our governments become more and more polarized on issues of tax increases on the “wealthy” and spending cuts on the “poor.” If you read TRC, you’ll have no problem knowing where I stand on this issue. So here’s a discussion question: what does it mean to be rich in the United States? I know little about the reality of taxation from the governing side, so this post is for self-education.

Joe Curl in the Washington Times (I know), draws a picture of the terrible plight of the life of an American family making $250,000 per year, who the President apparently referred to as “rich”. These families are not rich, says Curl, but pay their share, and more, to the government in taxes. Curl runs down the list of taxes paid by a family of 250,000 or more, and the picture he paints is, well, terrible. The lesson is: $250,000/year is no money at all, and President Obama, for thinking these people “rich” is extremely out of touch. After all, the President raked in $5.5 million last year. Concludes Curl: “So, scratch that beach house, that trip to Florida. And you can forget about these people setting up their own retirement. They’ll now have to depend on the federal government giving them back some of the money they paid in taxes.”

After reading this, the question arose: how many Americans are in this unfortunate position of clear middle-class economic over-taxation? And should the number of families living with $250,000 or more really matter as to how they are taxed? If they earned over 250K, is that 250K open to greater taxation?

In 2008, FactCheck.org reported 2% of American households made $250,000 or more in a year. In 2009, Soapboxers.com reported that “under 3 of tax returns” claimed $200,000 or more. Many sites and organizations find the same number, 2-3%. The benchmark of 250K seems to have been set the past few years, and the bar doesn’t seem to be moving. So we’ll say 2-3% of US households make 250K or more. Unless there is a newly expanded definition of “middle” it would seem difficult to paint the highest 3% of income in the US as middle-class.

But there are other factors. The disparity of wealth for example. Middle-class, as in the middle percentages of Americans, may not yet have reached 250K, but they aren’t too far behind. And while there may be a lot of people making 250K or more, a small percentage of those folks are making 1M or more, a much greater disparity. And a small percentage of those folks are making 5M or more. And a small percentage of those folks are making 10M. You see how this works. In the public consciousness of the United States, where millionaires are floating around on the TV and internets with a constant need for acknowledgment, a family of 4 making 250K probably doesn’t feel like they are in the top 3% (to which one might say: how do you think the rest of us 97% feel).
And then there are the taxes.

The tax argument surrounding the 250K line often seems to hinge on the notorious, beloved, ever-American “small business owner.” A great deal of our nation’s small business owners, we hear, make over 250K, thus raising taxes at the established benchmark would harm the small business owner, the business, the employees working in that business, those employees health care options, and any potential hire that may miss the chance of employment. Those are serious consequences, and if they are the result of using 250K as the benchmark, maybe we have to rethink it.

So here are the tax questions:
Aren’t there a whole lot of caveats in the tax code? Haven’t we built a tax system designed to protect these small business owners, or are those just to protect the energy companies and millionaires? Or are there no undeserved protections, and that’s simply a liberal line? Are we talking about raising taxes or are we talking about taking away loopholes and benefits we shouldn’t have provided in the first place?  Should we consider the removal of tax breaks or tax loopholes, as I understand a lot of these tax proposals are, the same as raising taxes?  If so, can we ever right mistakes in the tax code in hindsight or is that the same as raising taxes on the “small business owners” of America? Or do we always have to accept tax decisions from the past?Should it matter if that happens on those just over 250K or only on Oil Companies and the mega-millionaires? Do I have it all wrong and this is not how it works in the first place?

These questions might be mainstream left-leaning questions, eye-rolling to Republicans who see this issue as clear as day. But they are important questions that need responding to help folks like myself. Because when I think of myself and my family, who had a nice upbringing in a family of 4 in a solidly middle-class suburb with few (but our share of) hard-times, making it by fairly comfortably in the Reagan and Bush and Clinton days, our household income never even got the tail end of the breeze from the wake of a 250K annual income. Not Even Close. And now that I’m an adult and married, well 250K/year is the kind of household income we don’t even aspire to. So help me understand wealth in this country, because to me, this all makes no sense.

(*NOTE: there is a political discussion here, too, about the-Grover-Norquist-never-raise-taxes-ever-no-matter-what-pledge-theory of government. But good governance, in my opinion, rarely comes through pledges.)