Longing to be Sunk in the Middle

There is an old Lithuanian proverb that says “the older the bed, the closer the couple”. Actually…I just made that up, but old world proverbs – let’s face it - sound better than blogging bromides. The message is a good one nevertheless. Old mattresses worn in the center bring people together and if a couple wants to get some productive sleep they’d better work it out.

There is a construction currently today in America which has built a national mattress with a big lump in the middle. It seems that when too many American’s get into bed they involuntarily roll to one side or the other. It also seems that too many are oblivious to how they got there. Their time is spent primarily on tugging the blankets with those who have rolled to the opposite side.

Once again I’m reminded of one of my conservative friends, retired from business and now a part-time Methodist minister. In political discussions I have had with him, when faced with the inability to answer a point, he falls back on a simple axiom: whatever government does it screws up. He never really expands on what “government” means – Federal, State, Local, homeowners association, or all of the above? Given his fundamental conclusions he finds comfortable consistency from the ravings of (such as) Glenn Beck, who he loves, and therefore is content to be on his side of the bed…although he probably doesn’t get much sleep.

The blanket that he perceives being pulled back and forth is (to him) clearly labeled Capitalism on his side and Socialism on the other. Conservative talk personalities have successfully been able to link as synonymous the terms Liberal and Socialist for their audience, inferring of course that Socialism is just an anagram of the term Communism. They present it as if it was a secret puzzle that is completely obvious for the pure of heart: those pesky liberals are just Communists in disguise. Whipping the blanket to one side goes well beyond practicality. It becomes a duty. Of course it ignores their inherent conclusion that presidents from Washington to Lincoln to Roosevelt to Kennedy to Clinton and even Eisenhower, to a great degree, were all closet Communists.

The radical Right wing Conservatives have been successful in attaching “ism” to the word “social”. In doing so they have made the necessity we all have of coexisting into an economic system that they proclaim is a direct competitor of Capitalism (or its friendly synonym: Free Enterprise).

Free Enterprise is not only the critical underpinning of the American economy, it has proven (to my satisfaction anyway) to be the underpinning of the World’s successful economies and has done so by clear testing – the most recent being the collapse of the Soviet Union’s economic structure. Freedom works, and I have never heard an American economist or politician of any persuasion state anything to the contrary.

However, Republicans would have you believe that our social organization (i.e. Government) is an obstacle to Capitalism. Therein lays my friend’s black and white political/economic philosophy: business good – government bad. Yet it is absurd to think of Capitalism in a utopian fashion. Slavery works just fine in a Capitalistic model, so does child labor, or 70 hour work weeks. The entire concept of a middle class (as we hear used by politicians like it was comprised of nothing but mothers and babies) is not necessary within a capitalistic model for it to be viewed as successful. Poverty generally works against Capitalism as consumption is critical, but losing a fringe of the population to deprivation would be reasonable collateral damage. Today the most blaring example of the weakness of Capitalism is our Health Care System, which (for advanced economies) is the last for-profit Health Care System on the planet and yet the most inefficient and ineffective by a wide margin.

The fact of the matter is with 7 billion people now on this planet, 300 million in this country alone, the merging of Capitalism with social goals requires, like never before, an actively participating government to interact and even modify the direction of free economies. Historians and economists would point out that has always been the case, just never so dire - our last financial crisis case in point. When Ron Paul proclaims that things go wrong whenever Government injects itself into our economy, it resonates with many because it contains some truth. That’s especially true as special interests control legislation. However, his Libertarian conclusion (essentially shared by the Tea Party crowd) that the answer is to move to some kind of free rural economy that resembled those days when he was a lone doctor happily taking “chickens” for his labor and that gold is the answer to financial stability and growth, actually moves us toward chaos. It just isn’t the answer in a world of 7 billion. It makes no more sense than the vilification of business by the 99 percenters.

Government, which regardless what Republicans would have you believe is in fact the People, needs to impose its will to include a common good, not just to protect an individual good. That any politician calls any economic program or policy sacrosanct is reason enough to remove them from office, whether it be taxes or Social Security – throw the ideological bums out. Start with Eric Cantor. When folks roll to the center, one blanket works just fine.

Feeling the Pain…and Not Much More

In last night’s Republican Presidential Debate, somehow dubbed the Western Republican Presidential Debate (is the West seceding…I hadn’t heard?), Michelle Bachmann directed an answer toward a question about how she, and the other candidates, might deal with the foreclosure problem in the Country. She responded as follows:

"That was the question that was initially asked. And what I want to say is this — every day I’m out somewhere in the United States of America, and most of the time I’m talking to moms across this country. When you talk about housing, when you talk about foreclosures, you’re talking about women who are at the end of their rope because they’re losing their nest for their children and for their family. And there are women right now all across this country and moms across this country whose husbands, through no fault of their own, are losing their job, and they can’t keep that house. And there are women who are losing that house."

"I’m a mom. I talk to these moms."

"I just want to say one thing to moms all across America tonight. This is a real issue. It’s got to be solved. President Obama has failed you on this issue of housing and foreclosures. I will not fail you on this issue. I will turn this country around."

Congresswoman Bachmann provided this “detailed solution” to the foreclosure issue while managing to produce dewy eyes on the verge of eruption. I’m somehow reminded of a used car salesman selling some junker by directing the buyer’s attention to the nifty radio and shiny hood ornament. Her compatriots and competitors did no better on the question. The whole debate in fact should have been an embarrassment to the Republican Party, if that’s possible.

Trying to convince voters that she feels the pain may garnish some support, but it won’t do a thing toward improving the economy.

The foreclosure issue is truly a critical issue directly relating to the economic “recovery” most politicians tout - with little resolve. As I outlined in my essay It Isn’t About Jobs (Pennyfound, August 22, 2011), producing some predictability to the housing market is a fundamental first step to recovery. It will, along with some increase in real wages, precede any notable drop in unemployment. The Federal Government can do something to speed that process.

The business-created perfect storm of inflated housing values, along with unbridled credit, has resulted in untold numbers of homeowners stuck in houses they can’t sell while paying mortgages based on pre-crisis interest rates. Many, either by choice or necessity, are just walking away from their homes, which they can do because mortgages in this Country are non-recourse. The resulting foreclosures only exacerbate the problem. This is all happening while mortgage interest rates have dropped to historic lows.

Neither the Obama Administration nor Congress has done anything substantive that might address a no-brainer solution to the issue. Obama’s HARP program was a complete failure by it complexity and limitations. If homeowners could refinance their mortgages to current rates (which they can’t do because of the drop in home value and thus their equity), foreclosures would be dramatically curtailed. Disposable income would increase to those most likely to spend it, having a direct effect on the overall economy. Homeowners would feel less pressure to sell (or walk away), having the immediate effect of boosting real estate values…predictability follows. What don’t these politicians get? Well…one does get it.

Currently (and finally) there is a bill in the House of Representatives, HR 363, introduced by Congressman Dennis Cardoza (D-CA) which is specifically directed toward enabling home owners to refinance their mortgages at current rates regardless of the market value of the home. All other criteria for refinancing would remain, such as credit and income, but there would be some reduction in fees. There is practically nothing but upside to this bill. It’s two years late in the making.

Amazingly this bill has received practically no support from either party or the Obama Administration. How is that possible? There is only one set of losers to this effort and I suspect those potential losers are calling the shots. Those who hold the investments created by the current mortgages and are enjoying the high interest rates, for which people are locked into paying, are the potential losers. They also just happen to be the same people, institutions, and corporations that benefited from the fiscal insanity and negligence that created the housing bubble and associated derivatives markets in the first place. Funny how that works; they know such an improvement would hurt their short term bottom line, and that bottom line appears to be one line these politicians won’t cross.

Michelle Bachmann, et al, may want to show American that she can do more than just squeeze out a tear for the people who continue to transfer their meager assets to America’s wealthiest by supporting HR 363. I’m not holding my breath…and neither should the mothers of America.

Words of Desperation?

In the news clips of Chris Christie’s speech at the Ronald Reagan Library in California last night there was a woman who spoke what the news story claimed was a general consensus. She emotionally pleaded for the New Jersey Governor to reconsider his decision not to run for President… that she and the entire nation needed him…need him? His inability to emphatically close the door on such a run, as he has previously tried, allowed the news media the following morning to hype uncontrollably about the possibility. What is going on here?

Chris Christie has found his niche. Although clearly more educated and intelligent than Sarah Palin, his background has about the same depth. He has held public office now for 21 months. He has virtually no background or even any record of interest in foreign affairs. His glib, self-deprecating, and often bi-partisan approach to public communication has given him a kind of Will Rogers appeal, someone you can laugh with and trust at the same time. Somehow to desperate moderate-right Republicans this is enough to put him in-charge of the United States and the Free World, damn the details.

Sarah Palin is not likely to run for President (see Pennyfound: Ignoring the Obvious 7/5/09). On a recent interview she indicated running would cramp her style as “a maverick”. She’s smart enough to know that increased public scrutiny holds mostly downside for her, especially in the pocketbook. Chris Christie, as I said earlier, is smarter than Sarah Palin…way smarter. Much of what he has given for reasons not to run is both admirable and impressive. He has said “I’m not ready”, indicated it wasn’t the right time, pointed out his shortcomings, and simply relayed a lack of desire, among other things. He knows he’s a darling of the media that has found a talent in himself to be attractive, but he also knows that 21 months as a governor, 7 years as US Attorney (appointed under questionable circumstances), 3 years as a lobbyist, and some squirrely in and out participation in local politics does not a President make.

I think there could be something more to his decision not to run. As opposed to Sarah Palin who grew up in a conservative Christian, cheerleader, beauty pageant, weather girl kind of environment, Christie developed in the raw middleclass environment characteristic of New York/ New Jersey. The controversies that have surrounded his years both as a local Freeholder (like a county supervisor) and later as US Attorney lead me to consider that the kind of pragmatism he may have embraced is something he’s rather not have dug up and set on the table. If such is true, nobody knows this more than him. He may say that he’s not ready to run for President; however he may actually be saying that he’ll never be ready to run. The Peter Principal argues that people often rise one level above their expertise to their level of incompetence. In Christie’s case, it may be that a Governorship is the last level he can rise before he reaches his level of exposure.

It is a commentary in itself that there are so many who would follow an unknown quantity, or in the case of Sarah Palin an incompetent known quantity, simply because they are desperate for someone to believe in. If there is a lesson in here somewhere it is that leadership contains critical elements that are not intellectual or political. We all intuitively know that right…or do we President Obama?

Now and Later

My son is “jacked”, or so I am told. My first image is of a car half way through a tire change. I quickly understand, however, that they reference his physique. He’s in good health, works out religiously with his girlfriend, eats “healthy” (as compared with me, certainly), and takes physical risks (sports, weight lifting and such) without much concern. He is 25 and part of an army of young Americans fit or unfit, roughly between the ages of 20 and 35 (between leaving their childhood home and starting their own home with children), who are careening toward a precipice blinded by their own temporary good fortune. They are, for the most part, oblivious to the social and economic meltdown which is health care in the United States. Yet this problem will impact them so directly and in so many ways that their ambivalence leaves them akin to free-range chickens.

America has evolved its health care differently than every other advanced economy in the world. This was a complex evolution with many factors impacting the current state. Some common factors, however, have affected every economy over the past century; such as exponential population growth, exponential advancements in medical science, exponential dissemination of information, and exponential means of communication. With those common underlying dynamics, why is the US model so different… and so inefficient?

One major reason was the outcome of the 2nd World War, later combined with a manic fear of collectivism during the Cold War. With the exception of Canada (and to a lesser extent Australia) the US immerged from WWII without devastation. To the contrary, the Country was in better shape than it had been during the prior decade. Further, there was a righteousness that came from victory that persists to this very day. It was perceived, in many ways correctly, as a victory of Free Enterprise, but to question such became unpatriotic (or deemed treasonous as what occurred in the mid-50s, or by such sages as Sarah Palin today).

Where the rest of the world after the War saw major portions of their populations in devastation and without means, the concept of universal health care was both a necessity and consistent with a world view of fallibility. Those countries in Western Europe and the Far East had the ability to conceive a collective approach to health care without deeming such as undemocratic. They intentionally or not were able to view universal health care as liberating. Ironically, the United States, an integral player in the reconstruction of Western Europe and Japan, helped construct the bureaucracies to support universal health care. Canada, the noted exception, attempted an expanded free-market approach to health care, but facilitated by their parliamentary form of government later found it unworkable abandoned it for the British model.

The for-profit health care system in post-war America meshed nicely with rapidly expanding free-enterprise. The combination of strong organized labor, combined with a shortage of workers, which persisted from 1948 to 1972, health care (via insurance) became a form of invisible compensation. This was an historical accident without precedent (on a large scale), and without any logical argument for its efficiency. Quite the contrary, given the aforementioned dynamics of population, medical science, information, and communication, this system has proven itself to be extraordinarily inefficient. However, for the most part two generations have lived through it and now too many believe that employer covered health care is a natural state of affairs.

The Republicans in Congress, who argue for the status quo like junkyard dogs at the fence, find sympathetic ears by those employed individuals who can’t see their benefits as an actual use of compensation (i.e., something they’re buying). These so-called Conservative politicians wrap patriotism with the most egregious lies about the quality of our health care, exacting support for their position. You cannot have the “greatest health care system in the world” (as Speaker Boehner and Majority Leader Cantor have said countless times) and be 24th in the world for adult mortality and 26th in infant mortality. These politicians are actually fighting for those on the receiving end of the $1.6 trillion transfer that takes place each year - 2 to 4 times that of all other modern nations on a per capita basis. Tragically, the nation eats what it’s being fed. Obama, unable to compete, ends up creating a politically expedient health law which - once he agreed to drop a public option - only entrenches the for-profit system. There’s not much light poking through the clouds.

The young adults in the US today are playing on the tracks and they can’t see the train coming. Before this American health care system becomes unsustainable too many will find themselves and their children under cared for, their lifestyles compromised by huge health care costs, their parents destitute or without legacy, their mobility compromised, their ability to take risk reduced, and their responsibility for the previous generation a near impossible social burden. None of that even includes the anxiety and diminished quality of life that comes from the fear of uncertainty at the most basic of levels - survival. Right now they have little fear; they unconsciously plan on living forever, just as they are doing right now. If they only knew…

It Isn't About Jobs

It has become more than a little annoying to hear politicians proclaim that what we need in this country is jobs. Even worse is when they have to repeat the word, as if they were firing a clip from a rifle; we need jobs…jobs…jobs. Further, they usually finish this proclamation of insight by suggesting a simplistic solution such as building bridges and roads. In an economy which has been service oriented for decades I am struck by an image of laid off teachers, bank tellers, carpet salesmen, and…oh…say…accounting executives, all donning hard hats and heading off to some dilapidated corner of the country to lay asphalt.

Virtually any economist or even broker can tell you that employment is a lagging indicator of the economy. By the time employment improves or declines the factors that have led to the change have probably long been in place. That applies in times of both peace and war, since the steps taken to war usually ratchet up well before the application of resources and employment (Iraq being a notable exception).

The solution is not jobs - that’s the outcome. Maybe I should put it this way: the solution is not jobs…not jobs…not jobs. That’s not to say that public policy cannot have an impact on employment, it’s just that it can’t magically generate employment by some carefully directed expenditures or by somehow increasing the wealth of the top 2% of the nation that already currently owns 50% of our entire National net worth (excluding housing).

With no more rationality than Michelle Bachman saying gas prices will drop below $2 a gallon as soon as she is crowned, our leaders and contenders say whatever it takes to create an image that will garner them support. Majority Leader Eric Cantor (whose most notable Congressional achievement was getting a name approved for a Post Office in Richmond, VA - the Tom Bliley Post Office) is currently spending hundreds of thousands of dollars from his campaign war chest running ads reaching most of Virginia television viewers. He is proclaiming himself in the forefront of bringing good jobs to Virginia, even without competition for his Congressional seat. What is he really selling?

Public policy (aka Government) is essential to create the atmosphere in which the American style of Capitalism can thrive. That necessary atmosphere is called predictability, the most important ingredient for investment. The lies the Republican Right deliver endlessly, such as taxes are an inherent evil or that the free market will always do the right thing do nothing but instill fear and exacerbate the deleterious concentration of wealth in the United States. They create confusion because the 298 million people, who own less than 50% of the Nation, are deterred or reluctant to take risk because they don’t know what to count on, what is safe, or what is fair.

Free Market health care may be the single biggest drag on the economy since it transfers huge amounts of assets unproductively, burdens business, and renders workers nearly immobile with fear - and those are the healthy ones. Although Obama touts what he got passed (a massive health insurance reform bill) it has or will do little to elevate the control free market health care has due to the continued high level of uncertainty for the average US citizen. It was his worst failure, followed closing by approving the Bush tax cuts extension.

There are two areas to look for a true turn around in the economy. The first is stabilized real estate values; the second is an increase in real wages. The part of the population that own their own home need to be able to comfortably predict that the value of that home will rise at a more or less constant rate slightly ahead of inflation and that the house they may want to buy will do the same, and all workers need to predict that continued work and accumulated experience will result in increased wages at least slightly better than the rate of inflation.

For public policy to assist in those two areas it needs to trim expenditures, especially internationally, and create revenue (taxes) which will both reduce debt and the disparity in national wealth ownership. The objective is not to make the rich poorer, rather, in an expanding economy, to have the bottom 98% increase their wealth at a much faster rate than the top 2% (which currently is the exact opposite).

It also needs to include simplified regulations (not reduced regulations), the reinstatement of the pay-as-you-go policy (enacted during Clinton’s balanced budget Administration and ended under Bush), and start the process toward a single payer health care system by adding a public option to the current health care law. That creates the atmosphere; the free market will take it from there, and leave the Fed to keep inflation at a minimum with a balanced monetary policy. The jobs will come.

Are You Happy?

In June of 1776 Thomas Jefferson penned in his declaration the famous “unalienable” or natural human rights that were to be a cornerstone of this Nation’s political philosophy. It wasn’t particularly original. Popular philosophies in the 18th century from men such as John Locke and Francis Hutcheson had reflected on similar natural rights of Man, and George Mason had only weeks before written his Virginia Declaration of Rights using a similar phrase. However Jefferson, with Benjamin Franklin’s advice, had substituted the pursuit of happiness for (the pursuit of) property, the word used by such as Mason and Locke. This pursuit of happiness, which has been quoted a billion times in America, both in political and non-political contexts, is a befuddlement to me. The pursuit of property I understand, but just what does happiness mean? Of course the unalienable right is the pursuit, but in a real sense is it the pursuit of something which is actually attainable?

Are you happy? That is one of the most common questions in the English language, or probably most languages (but certainly not all). It, or an equivalent question, is asked by parents to children, children to parents, spouse to spouse, lover to lover, sibling to sibling, friend to friend, therapist to patient, and so on. Although the asking is easy, the honest answering of it is extraordinarily difficult. It’s so difficult that most people really don’t answer it at all. They may say “oh sure” or “most of the time” or “things are tough” or “I try to be” or “I’m feeling great”. That’s what we might say, but mostly we’re thinking: I have no idea. We might answer with conviction that we’ve been pursuing happiness, but why is it so difficult to definitively answer whether we’re there or not? We’re not even sure what it feels like… contentment?... tingly?... warm?... rich?

One could probably answer with assurance that “sometimes I’m happy and sometimes I’m not”, which might better reflect day to day life. That conclusion may, however, be confusing happiness with, say, joy. We know what joy is. It happens on a roller coaster, shared passion with one’s love, watching a good movie, or eating something delightful for example. It’s entirely acceptable that completely miserable people might have many joyful experiences. I believe the reason it is so hard to conclude whether your life is happy or, said differently, you are a happy person is because there is no such thing as happiness. Jefferson and Franklin’s natural right is directed toward something that doesn’t exist and as such has been a bedrock of continual confusion.

How can there be no happiness? You might say it’s like saying there is no love (at least we know that love and happiness don’t necessarily cohabitate). No, love is real, however I feel the word happiness is a misdirected term. I had an epiphany some time back when I realized that what we call happiness is really the absence of fear.

Fear is the single most driving emotion we possess, and for good reason. It is the primitive emotion for survival. I don’t know if prehistoric men sat around thinking about whether they were happy or not, but I can be damned sure they knew how to be scared, or driven by the panic of starvation. I can also assume that at those times when their needs were met they probably felt pretty good, but those times were not happiness, rather they were the absence of fear.

Today we find fear everywhere, not just in day to day, meat and potatoes survival. Fear is a tool of our economic and political systems. A majority of commercials and news stories in some way merchandise in fear. Crime, germs, investments, child protection, education, jobs, health, beauty, age, mechanical safety, food, weather, corruption, sex, or anybody who isn’t you. Any one of us could write a list as tall as ourselves. On a day or week or month when you shed yourself of most fear how do you think you would answer the question: are you happy?

If Jefferson had stated in our Declaration of Independence that our unalienable rights were to life, liberty and the pursuit of freedom from fear then maybe as some politicians place a gun to the nation’s head threatening to pull the trigger if they don’t get their way, more of us would have a better understanding of who is on the side of the nation’s people and who isn’t.

The Consensus Trap

There are over 16 months till the next U.S. Presidential contest and it has already invited itself into the home by television, magazines, internet, radio, telephone, and conversation. Paid anti-Obama TV commercials are airing frequently. It feels like it won’t be long before they’re competing with pharmaceuticals for gross intrusion. Like a warm week in February, I can’t help wondering if this is somehow different than last time, is the hot summer starting early or not?

One reoccurring theme is an Obama vulnerability with so-called Progressives (a.k.a. Liberals or “his base”) due to his presumed failure to nail down their positions. That this should be a concern is beyond laughable to the far-right Conservative end of the spectrum, considering they’ve pinned Obama as a President way left of Mother Teresa, burying us with Socialistic edicts. Still, the dissatisfaction of Obama by the counter left seems to have legs. The Obama team, by their proactive protestations to the contrary, appears to be fearful that these legs may be walking away.

That any of this were the basis of a Shakespearian play we might need to be deep into the second act before it became apparent whether we were watching a tragedy or a comedy. I’m thinking comedy at this point. I mean, the characters won’t die in the end, in fact most will probably leave the story richer than when they started…probably whistling. An irony is that the active ends of the political spectrum are both likely to fall behind their candidate and, of course, vote, which makes concern about their support as useless as a father’s worry about the puppy he’s bringing home to his kids. The real story is in the middle.

Obama has reason for concern, but it isn’t about his failure to deliver on a Liberal agenda. A reading of The Audacity of Hope, Obama’s political opus, provides a clear transom into Obama’s real challenge to succeed the Hope candidate. I believe it is entirely possible that this treatise on his own political personality was gift to those who seek to remove him from office. The book makes the “ideal” of consensus a virtually goal, well surpassing more picayune objectives such as health care or campaign finance reforms. Bring everyone together, he essentially proclaims, and the rest will take care of itself. Unfortunately, this doesn’t make for good leadership and it is no formula for re-election.

Franklin D. Roosevelt won election by a large majority in 1937 but not because he had turned the economy around or seduced the opposition. Unemployment was still at 15% (higher if you factor out temporary government employment), equity markets stagnant, financial systems unworkable, deflation unabated, and the military in disarray. He was challenged by business and large conservative coalitions from both parties. What he did offer was strength in leadership which provided a sense of predictability to the general population. History shows both his New Deals were actually shotgun approaches to the economy, with broad uncertain bills, spending cuts, eclectic agencies, and complicated regulations, many thrown out by the courts or not bearing fruit for decades. Still, all most saw was his willingness to pull the trigger. He won the I care about you contest.

Obama was positioned for a similar outcome but instead chose a tactic of Solomon, to lead his flock by the power of his reason and personality. The Republican/Conservatives sized him up quickly as a lightweight and blindsided both him and his Congress with effective stonewalling and nastiness. It was Jimmy Carter all over again. Obama’s accomplishments to date, although notable, have not engendered the necessary I care about you mystique. He could have done it with health care. If the nation’s citizens had awakened to a world where they would never again be alone and at constant risk in obtaining health care Obama would have been politically indestructible. His inability to allow the Bush Tax Cuts to expire combined with reluctance to cut Federal expenditures has left him looking only political.

With only 16 months left it will be difficult for Obama to remake himself, especially with a Republican House. A noticeable drop in unemployment, an increase in real wages, or maybe a meaningful pullout from the Middle East might help. However, I think with the Misery Index staying close to that facing Carter in 1980 Obama’s best hope might come from the Republicans. If they field a Bachmann, a Newt, a Sarah, or even a Pawlenty, Obama could do well. However, all things being equal, if they go moderate and nominate someone like Huntsman (and Jon has not fathered any bastard children by his former Au Pair), well then…Obama is toast.

Who's Taking Care of Grandma?

Somewhere around Scottsdale, Arizona four senior gentlemen are finishing their putts on the 4th green on an early Tuesday afternoon. It’s sunny…of course. They’re growling about the safety of their Social Security payments and the obvious government conspiracy to take those payments away, probably through taxation. Later after the game they’ll have a couple of beers at the clubhouse, mount their Acuras and ride home to wait on dinner. At the same time, somewhere just outside Columbus, Ohio a couple in their early 70s sit at the kitchen table in their small apartment trying to figure out when they can afford front tires for their 10 year old Sentra. Each golfer (with his wife) receives about $26,000 a year in Social Security, representing 30% of his current income. The Columbus couple receives $15,600 annually which represents 91% of their total income - they worry even more about their Social Security.

Social Security, your politicians explain, is fully funded through…well…a run-out-of-money date, no-viability date, buy-the-ranch date, or whatever date floats, so much so it isn’t worth remembering. Just assume it’s some time out there, so they say, which is also so much horse poopee. The reality is that it isn’t funded at all and hasn’t been as long as this nation has run deficits and accumulated debt. How can that be, you ask? They’ve got that account with those trillions of dollars of bonds in it, that bastion of security – the Social Security Trust Fund!!

The Social Security Trust Fund was born in 1983 because the original concept of Social Security in the 1930s as a pay-as-you-go system was no longer functional. It started well, but ended up bad, I guess when nobody was looking. Benefits currently paid exceeded receipts and when you ran the numbers out over decades of aging workers, they got pretty ugly to look at. Alan Greenspan spearheaded the policy to increase payroll taxes essentially replicating the early years of Social Security when current revenues exceeded current payout, but this time we decided to put the surplus in a nice safe place to fund projected claims as the population grew older. Ergo, the Trust Fund. Moreover, it preserved the concept (dare I say: illusion for the conservatively minded) that Social Security was some kind of paid in retirement plan - not the horrid W-word plan. Of course, this contrived concept was not reality; primarily because the nation’s low tax/ high spend mania could not be abated.

To give you an example of this shell game: say you wanted to fund your own retirement plan, but as luck would have it the idea of doing so would put a crimp into your lifestyle, especially when that lifestyle exceeds your income. But, being sensible and thinking of the future (which was looking pretty bleak), you decide to go ahead and put 10% of your income into your retirement plan account. Then you realize that your flat screen is way too small, the green fees down at the club just went up, you know you’d feel a whole lot safer if you drove a Hummer, and all those plans are in jeopardy because you’d be short on cash. Then you come up with a great idea. You can fund your retirement with IOUs…with interest! Now you’ve got this great retirement plan, with great interest bearing notes in it, you can even pay the interest to yourself with more IOUs, and you still get to buy all that crap you can’t live without. Does it get any better than that? One small problem: when you want to start receiving those nice fat retirement checks, you’ll have to keep working to pay for them.

National debt is simply and purely nothing more than deferred taxes (which includes fees and divestiture of public assets). There is virtually only one way to eliminate debt without the transfer of real assets (taxing), and it’s not default. A nation cannot really default, at least not American style; there is no international Chapter 11. The debt doesn’t go away. People just stop lending you money. The only real way to dodge paying it all back is by devaluing what you owe, i.e. inflation. When a $100,000 Treasury bond buys you one quart of milk the Treasury is pretty much out of debt. As it happens, as a citizen and taxpayer you’re pretty much out of debt as well. Of course, there is also a lot of other really nasty stuff that goes along with that - but let’s not dwell on economic Armageddon.

Social Security (funded through whenever) is comprised then of deferred taxes, essentially the same if there was no Social Security Trust Fund at all. We’d either cover the tab on Social Security (and OASI) by taxing the bejeebies out of subsequent generations or (as in the current scenario) taxing the bejeebies out of subsequent generations to pay off the debt - sounds kinda similar to me. Of course we could continue to borrow more and more, but that boat ain’t gonna float...not without taking a broadside from the inflation torpedo.

The only way to deal with Social Security and all so called entitlements in which future benefits are unfunded is to begin to accept what it is and what it has always been since its inception. Someone who bends to the left might call it welfare; someone who bends to the right might call it insurance. It’s the same either way.

Our politicians enacted and we have subsequently accepted that, as a nation, we don’t want people, who because of age or health can no longer work, to be left in the streets to rot in public view. Historically that was actually the case, especially in the early immergence of urban industrialization. Social Security, even with our chest pounding raw dedication to free enterprise, was created during a brief, admirable embrace of humanity. Yet very soon it was subverted into a notion of a personal investment, by those who opposed it from the outset.

Personally I like to call it insurance (does that mean I lean to the Right?). No one can project who is ultimately subject to misfortune. Some perhaps by chance, some by their own hand, but what difference does it make? By paying into a concept of spreading the risk, as we should be doing with healthcare, we cover ourselves, our parents, and our children. With any luck at all we may never need a penny of it, and when that’s the case we shouldn’t get a penny.

The solvency of Social Security should be attained by continually reducing the projected unfunded benefits to those whose needs don’t meet its purpose. There ought to be set target limits on benefits, with benefits providing an honorable lifestyle. Using the Tax Code, Social Security payments should be taxed at rates up to 100% once income reaches and exceeds those levels. There could be some minor means testing of benefits, but it is still reasonable that those who paid in more should still receive higher benefits, since their qualification to receive benefits would presume a greater lifetime drop in living standards.

It should again be pay-as-you-go and be funded through a flat tax, as it currently is, but that tax should not have income limitations. Another dumping on the wealthy, you say? Hardly. The economic and social stability of a society always has and always will benefit the wealthy most. That’s because it increases predictability, which is the cornerstone of investment.

My Pool

I hated my pool.
I didn’t want it, it came
With the house, laying in the
Back yard like an old
Slobbering dog, exacting
Squeals of delight from my
Young children, humming and
Gurgling a ditty of “feed me
With your fortune” and “caress
Me with your time”.
And I relented,
Seduced by images
Of shared joy and clear, warm
Nights where light breezes
Cool my wet hair and I am
Near weightless of care. But
The years passed and I did not
Count on the winters, the
Fallout of nature’s endless
Cycle of death to life and
Back to death again. And I,
Immersed in the struggle to
Keep the waters clear, felt no
Longer capable of finding the
Delicate balance between a
Chemistry of desire and the
Tension that suspends debris
In places I could hardly reach.
I wanted to cover it, permanently,
Or fill it with something
That blended with the landscape.
Perhaps become a place
Where I could plant seeds, seeds
That said “feed me with your
Fortune” and “caress me with your
Time and I will grow for you”.
And in the spring, I did.
With great machines and trucks
Of dirt, it vanished from sight.
It no longer waits to be cleaned and
The shriveled brown leaves of fall
Blow across it unhindered.
It is gone, or good as gone.
Even if the wet earth of winter
Sinks ever so slightly in what was
The deep end.

Is Anybody There? Does Anybody Care...?

…“Does anybody see what I see?” Those are lines in a song from the 1969 Broadway musical 1776. The actor playing John Adams sings this soliloquy lamenting why members of the Continental Congress can’t see what is so obvious to him, namely the need for independence from Great Britain. There are times when any of us might arrive at a conclusion that seems both obviously correct and contrarian at the same time. Later, more often than not, additional information can have us viewing things differently, perhaps even causing a touch of chagrin. Don’t you hate that, when things appeared so certain?

I currently find myself burdened by such a view and have seriously struggled to find reasons why that view might not be correct. I haven’t found any…at least not yet. I’m talking about Health Care in America. I have written about it previously, but, frankly, it cannot be brought up enough. It is the single most import issue in the United States today, because it impacts so many aspects of life simultaneously.

It is the single biggest expenditure for the Nation’s people, dwarfing Defense. It’s the single biggest hindrance for freedom to seek employment. It is possibly the most inefficient system of any kind (based on size) in the history of modern man. It’s the single biggest inhibitor for small business expansion. It is a major cause of disabling anxiety for the middle class. It is the single biggest transfer of wealth in the history of this Country…or any other country. I’m not making this up. Currently $1.8 trillion annually comes out of your pocket (directly, in taxes, public debt – which is only deferred taxes - or for you by your employer) and ends up…well, somewhere else.

Yet the negative nature of this system in its entirety is nearly oblivious to large segments of our population. More amazingly, there are segments which have been convinced to actively support this System against their own best interest.

The wealthy can self-insure and since they are (unwittingly or not) the beneficiaries of the transfer they are hardly inclined to admit what is happening. Their surrogates in Congress will repeat that we have the best health care system in the world, over and over. The employed insured are annoyed but at the same time blinded by not being able to understand the true cost of what they’re paying. The poor have little incentive, because they can tap into existing welfare and have little (materially) to lose. The elderly actively resist change because they already receive universal coverage and are frightened by those who say change will take that away. The young (those say 18 to 30) for the most part are comatose on the subject, primarily kept unconscious by their natural good health.

The opinion of the wealthy will not change; moreover they will do whatever it takes to retain the status quo. The employed insured, most notably working Conservatives, will not challenge the System, unable to recognize their own deleterious behavior, even as they unload every bullet they have into their own feet. They are too malleable by use of fear. It is for the youth of America that I’m writing this piece. They are the only ones who can effect change and they are ones paying the price right now, by the accumulation of extraordinary debt and lost opportunities. They should be shouting from the roof tops or stampeding in the streets. Is anybody there?

The universal dispensation of health care cannot exist in a large modern economy today as a for-profit, free enterprise system…period. It might appear to work if you’re willing to give up the universality. You’d have to let a segment of your economy go without health care regardless of their desire to get it. More metaphorically, you have to let people die in the streets, so to speak.0

Yet even then it wouldn’t work effectively or efficiently. There is nothing in a for-profit health care system that can control the cost because, in economic terms, there is almost no elasticity in demand. That means individual demand for health care services does not drop no matter how high the price goes up. Total demand might drop simply because people can no longer afford health care, fall out of the system and die, but for those paying with their remaining assets the costs would continue to spiral up. The whole concept is not self-sustaining and it is ripping apart the fabric of our nation. Does anybody care?

A young person might ask what is so different now compared to decades past…a lot actually. First and most critical, the population of the United States has more than tripled in the last 100 years. Modern medicine as we know it now is relatively new. The technological changes that have transformed medicine (micro biology, pharmaceuticals, genetics, and numerous others, for example) have mostly occurred during the lives of living generations.

Further, historically through most of the 20th century, the practice of medicine was mostly non-profit. Most doctors worked independently in conjunction with hospitals that were publicly or charitably owned. The massive change toward capitalization of health care with the rise of professional corporations and huge hospital corporations has taken place mostly over the past 30 years. The bones of the beast became the medical insurance corporations, and the life blood of the beast is debt, public and private.

No other large advanced economy in the world has had this experience. Universal public health care in Europe and Asia is as old as the medical industrial complex is in the United States, most originating in their current form just after World War 2. Canada tried the American approach but soon realized the obvious and converted to universal public health care in the early 60s. 

Now Americans pay multiples of what other modern economies pay, on a per capita basis, for health care that barely rates above third world countries for the nation as a whole. And even with all these resources spent, the fear of being turned out on the streets by the insurance companies due to a job change, or contracting a disease, or having an accident, and end up running out of assets pervades the middle class like a perpetual black cloud. Can anybody see what I see?

There should be a revolution between the young people of American against those who are on the receiving end of that annual $1.8 trillion transfer. When Mitch McConnell, John Boehner, and Eric Cantor endlessly repeat the phrase “government takeover of health care” to describe the recent health care law (that only modestly modified the health care insurance industry) they are using fear to maintain the status quo. 

Such should be heard as clarion call for American youth to demonstrate against the hypocrisy. Young people did it during the Vietnam War because they felt personally at risk. Well…they’re at risk now, as we all are. But the youth of America will bear the brunt of the disaster, the longer they wait to show up and open their eyes.