Tag: New York Times

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culture National politics

American Debt is No Accident

The fact that Americans have allowed themselves to be led down the rosy path of false economic hopes for a rosy tomorrow – where we can borrow now for anything we want with no thought for the fact that we are paying more by mortgaging our futures all the time – is not surprising. What caught my attention are the actual statistics of this fiscal malpractice and the stark proof that our financial institutions are trying to profit by keeping us individually on the brink of financial ruin.

Since the early 1980s, the value of home equity loans outstanding has ballooned to more than $1 trillion from $1 billion . . .

However, what has been a highly lucrative business for banks has become a disaster for many borrowers, who are falling behind on their payments at near record levels and could lose their homes.

The portion of people who have home equity lines more than 30 days past due stands 55 percent above its average since the American Bankers Association began tracking it around 1990; delinquencies on home equity loans are 45 percent higher. Hundreds of thousands are delinquent . . .

None of this would have been possible without a conscious effort by lenders, who have spent billions of dollars in advertising to change the language of home loans and with it Americans’ attitudes toward debt.

Aside from the precise numbers listed above, none of that information should surprise anyone with their eyes open to the economic situation of the country.

It might seem hard to believe, but not long ago people borrowed money to buy a home with the expectation that they would eventually pay off the debt. A mortgage had a finish line. . .

The newly mortgage-free even used to throw mortgage-burning parties to celebrate their financial freedom. . .

Now the idea of paying off the mortgage and owning a home outright is disappearing. . . banks now enable homeowners to keep borrowing. In fact, they encourage it. . .

As a result, the United States has become a nation of half-home owners. For the first time since World War II, the portion of home value that Americans own has fallen to less than 50 percent. In the 1980s, that figure was 70 percent. (emphasis added)

Let me translate that – we now own less of our own homes as a nation than we did 20 years ago. We have sold majority interest in the most valuable piece of property we have to our bankers for the sake of extra stuff which, while often nice to have, does not provide any of life’s necessities (shelter being a necessity while wave-runners, trampolines, nice furniture, and timeshares are not).

If the majority of our citizenry acts that way with their own money, it should not be surprising that our government does the same with public funds. (In the last 40 years, the only time our deficit spending has even tapered off was from 1998 to 2000.) Our public financial blinders have brought us to the attention of Nouriel Roubini:

After analyzing the markets that collapsed in the ’90s, Roubini set out to determine which country’s economy would be the next to succumb to the same pressures. His surprising answer: the United States’. “The United States,” Roubini remembers thinking, “looked like the biggest emerging market of all.” Of course, the United States wasn’t an emerging market; it was (and still is) the largest economy in the world. But Roubini was unnerved by what he saw in the U.S. economy, in particular its 2004 current-account deficit of $600 billion. He began writing extensively about the dangers of that deficit and then branched out, researching the various effects of the credit boom — including the biggest housing bubble in the nation’s history — that began after the Federal Reserve cut rates to close to zero in 2003. Roubini became convinced that the housing bubble was going to pop.

By late 2004 he had started to write about a “nightmare hard landing scenario for the United States.”

Anyone who is uncomfortable with the fallout of private homeowners beginning to default on their mortgages is going to be aghast at the results of the government declaring bankruptcy – and unless we change our thinking we’re going to have to declare bankruptcy – already we are faced with a debt that we are going to hate paying off. If we kept paying our current taxes and the government did nothing but pay debt at 0% interest it would take four years to pay it off and if we kept paying our mandatory spending programs it would take 10 years.

It’s about time our nation put both our public and our private financial houses in order.

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National politics technology

Ambitious Pronouncement

I’ve already stated that I believe the goal of using only energy from clean, renewable sources is attainable but I think the Green Prophet might be getting ahead of himself.

{Al Gore} said the goal of producing all of the nation’s electricity from “renewable energy and truly clean, carbon-free sources” within 10 years is not some farfetched vision, although he said it would require fundamental changes in political thinking and personal expectations.

“This goal is achievable, affordable and transformative.”

I would love to be proven wrong on this, but I’m skeptical of the 10 year time-frame. The only real question in my mind is, will Barack Obama endorse this idea before I publish this post?

I guess my personal expectations are among those that he predicted would require fundamental changes.

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National politics

Raising Fiscal Awareness

Considering the importance of importance of fiscal policy it seems to evade any serious media coverage in favor of more exciting topics. Ross Perot has launched perotcharts.com to make the information accessible to people. Former Comptroller General, David Walker, has been lecturing around the country about the cliff we are speeding towards and now Peter G. Peterson is pledging to spend $1 Billion in a media campaign to raise public awareness of the issue. (Remember how much a Billion is?)

Ready and waiting as people start to recognize the trainwreck ahead, Downsize D.C. has a campaign which helps people let their congressional leaders know that they are aware of this issue. I think many members of congress are aware of this, but they don’t want to address it because there are no easy answers or short soundbites.

Categories
culture National politics

Promote Job Creation

Bob Herbert and I often differ in our views but I really like what he said about economic stimulus as is being discussed in D.C.

There is no question that some kind of stimulus package geared to the needs of ordinary Americans is in order. But that won’t begin to solve the fundamental problem.

Good jobs at good wages — lots of them, growing like spring flowers in an endlessly fertile field — is the absolutely essential basis for a thriving American economy and a broad-based rise in standards of living.

Forget all the CNBC chatter about Fed policy and bargain stocks. For ordinary Americans, jobs are the be-all and end-all. And an America awash in new jobs will require a political environment that respects and rewards work and aggressively pursues creative policies designed to radically expand employment.

I’d start with a broad program to rebuild the American infrastructure. This would have the dual benefit of putting large numbers of people to work and answering a crying need. The infrastructure is in sorry shape. New Orleans comes to mind, and the tragic bridge collapse in Minneapolis. (emphasis added)

What is a political environment that respects and rewards work? The answer is – one where we don’t perpetually give money to people who don’t work (I’m talking welfare here, not pensions or social security as those are supposed to be earned benefits). What we currently have is a policy that discourages people from taking work that is “beneath them.” If I am receiving unemployment I lose the benefits if I take work that pays me less than I’m worth and thus it is in my interest to turn down temporary or lower paying work so long as I can receive those benefits.

Even unemployment could be considered an earned benefit. People on government welfare can stay there as long as they are willing to live at that level of poverty – their health care is free to them even if it’s somewhat limited, and they never have to worry about going hungry even if Food Stamps don’t provide any luxuries. For those who lack the skills to get a job that pays noticeably more than welfare hands them, there is no incentive to go work when staying home gives them the same economic standard of living.

Herbert is right, economic stimulus should come in the form of work programs not unlike the WPA which would provide income and training for  those in need of new or improved skills. As the economy grew the program could be terminated (again) but until then people would have work and the nation would be improved in whatever ways were deemed necessary at the time. This would be much better than a one time tax rebate or extension of unemployment benefits. It would be more valuable than manipulating bankruptcy laws to save a few people from foreclosure. On-the-job training would even be more effective than paying people to seek new or improved skills in an academic setting.

Categories
culture politics

Conspiracy of Confusion

Diet is about as far from my normal topics as I can imagine. Part of the reason for this is that I generally follow the world’s simplest diet:

“Eat food. Not too much. Mostly plants.” (Michael Pollan January 28, 2007)

I have followed that basic idea for years without knowing anything about Michael Pollan or what he had written. Today I stumbled upon An Omnivore Defends Real Food and could not help but make some connections between the confusion surrounding nutrition (as opposed to the apparent simplicity of the dietary plan above) and the confusion surrounding so many other social, economic, and political issues.

I would not make the argument that everything could be simplified as much as that maxim on diet (or even that everything should be so simple in a perfect world) but the thing that struck me, and the very purpose of my advocacy for liberty, is that we need to be free to our own level of complexity or simplicity in most things. With diet I can choose to ignore all the advertising about the latest health fad, or I can choose to test or follow any given news about the dangers of whole milk or the virtue of Omega3 fatty-acids. On the other hand I am not free to opt out of social security and many politicians are talking about making it illegal for me to choose not to have health insurance.

The argument is that if I don’t get health insurance and something happens to me then I become a financial burden to society as I use government funded health care. The same argument is applied to whether I am allowed to pay in to unemployment taxes – what if I lose my job. The real problem is that government has created a system whereby people can freeload on the system so it does not matter how much someone protests that they won’t. Personal responsibility is a thing of the past because Uncle Sam can/will bail you out. Personal liberty is also reduced because everyone is required to participate (at least on the paying in portion – you can opt out on the receiving benefits side of most programs).

I can’t think of any of the entitlement programs that the government runs that would be a bad thing if they were based on voluntary participation. The universal problems they share are their coercive nature and the complexity that makes themboth inefficient and exploitable.

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culture politics

The Electability Trap

In what is probably the best non-partisan political commentary I’ve read recently, Ron Klain at Campaign Stops (a New York Times blog) writes about the dangers of choosing a candidate based on electability.

Whether you are looking for the person you think would be the best president or the person with whom you agree on key issues; the person whose experience is best suited to the job or the person who is most likely to bring change to Washington, there are many good reasons to choose a particular candidate. Character, personality, leadership skills, resume or accomplishments are also good things to consider. Almost any reason will do, just please don’t pick someone because you think that he or she is the most “electable” candidate that your party can nominate.

Of course we would all like to vote for the winner, but voting is our chance as citizens to make a statement. We should be standing for what we believe by the way we vote, not hazarding a guess as to what the majority believes. Again, I like the way Ron makes his closing argument:

Taking something as sacred as your presidential preference and turning it into an act of political prognostication cheapens your choice: being a voter is a more important job in our system than being a pundit or a consultant. Why should you cast your vote based on how you think others will vote (even if you could guess that accurately)? Why should their choice matter more than your own?

Yes, ultimately, presidential campaigns are about winning: a candidate who does not win cannot achieve policy changes or make the country a better place. And being mindful of the consequences of our votes is important, as many people who voted for Ralph Nader in 2000 — only to put George Bush in the White House, instead of Al Gore — have painfully learned.

If you want to back a winner in 2008, focus on persuading your neighbor to come over to your choice, instead of guessing how he will vote.

Categories
culture

Case for Absitnence

I was surprised as I read this Op-Ed piece in the New York Times by Caitlin Flanagan. I doubt it was her intent, but I found a very strong argument in favor of abstinence as the preferred attitude toward extra-marital sex. She argues that there is a double standard related to the burdens of teenage pregnancy that falls more heavily on girls than on boys.

. . . the last scene [of “Juno”] brought tears to my eyes. To see a young daughter, faced with the terrible fact of a pregnancy, unscathed by it and completely her old self again was magical.

And that’s why “Juno” is a fairy tale. As any woman who has ever chosen (or been forced) [to give a child up for adoption] can tell you, surrendering a baby whom you will never know comes with a steep and lifelong cost. Nor is an abortion psychologically or physically simple. It is an invasive and frightening procedure, and for some adolescent girls it constitutes part of their first gynecological exam. I know grown women who’ve wept bitterly after abortions, no matter how sound their decisions were. How much harder are these procedures for girls, whose moral and emotional universe is just taking shape?

Of course those who disapprove of abstinence education also want to prevent unwanted pregnancies. On that everyone is agreed. The problem that they ignore is the fundamental fact that the natural result of sexual activity is pregnancy. We can lower the chances, but we can’t eliminate them. Regardless of what they may wish, there are side effects to abortion as well.

It would be helpful for the pro-life groups to admit that their preference for adoption over abortion is not without side-effects either. The reality is that regardless of the course taken afterwards, the universal result of unwanted pregnancies is emotional pain and suffering for the mother if not for anyone else.

Ms. Flanagan wonders if there is a way to level the difference in the burdens between teenage fathers who can escape the consequences in many cases and teenage mothers who can’t. Even her own words seem to promise that the answer is no.

Pregnancy robs a teenager of her girlhood. This stark fact is one reason girls used to be so carefully guarded and protected — in a system that at once limited their horizons and safeguarded them from devastating consequences. The feminist historian Joan Jacobs Brumberg has written that “however prudish and ‘uptight’ the Victorians were, our ancestors had a deep commitment to girls.”

We, too, have a deep commitment to girls, and ours centers not on protecting their chastity, but on supporting their ability to compete with boys, to be free — perhaps for the first time in history — from the restraints that kept women from achieving on the same level. Now we have to ask ourselves this question: Does the full enfranchisement of girls depend on their being sexually liberated? And if it does, can we somehow change or diminish among the very young the trauma of pregnancy, the occasional result of even safe sex?

The trauma that will always accompany unwanted pregnancy has become more common as we first accept that “boys will be boys” and then we glorify that attitude, excusing (and demeaning) young men as being unable to control themselves. We have followed that moral irresponsibility by trying to teach our girls to be boys in adopting a callous attitude about sex. Sexual activity was never meant to be taken lightly which is why it was meant to be reserved for a marriage relationship. Any other relationship and it does not matter what precautions you take, you are flirting with the consequences of pregnancy and STDs.

This is why we must teach young women to guard themselves and we must teach young men to guard the young women they care about. This teaching is not meant to be done publicly. It should be undertaken within the setting of family. No other setting can ever be fully satisfactory for the intimacy of discussion that is warranted on this subject.

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National politics

The Pull of Youth

I can’t really explain why the following passage stuck in my mind from Frank Richs’ column in the New York Times yesterday. Something about it just caught my attention and has been hanging on in the background ever since. Speaking of the winners of the Iowa caucuses:

The two men are the youngest candidates in the entire field, the least angry and the least inclined to seek votes by saturation-bombing us with the post-9/11 arsenal of fear. They both radiate the kind of wit and joy (and, yes, hope) that can come only with self-confidence and a comfort in their own skins. They don’t run from Americans who are not in their club. Mr. Obama had no problem winning over a conclave of white Christian conservatives at Rick Warren’s megachurch in Orange County, Calif., even though he insisted on the necessity of condoms in fighting AIDS. Unlike the top-tier candidates in the G.O.P. presidential race, or the “compassionate conservative” president who refused for years to meet with the N.A.A.C.P., Mr. Huckabee showed up last fall for the PBS debate at the historically black Morgan State University and aced it.

The “they” who did not see the cultural power of these men, of course, includes not just the insular establishments of both their parties but the equally cloistered echo chamber of our political journalism’s status quo. It would take a whole column to list all the much-repeated Beltway story lines that collapsed on Thursday night.

One thing that struck me was the admission that the established leaders of the parties and the professionals of political journalism can’t grasp what is happening in this year’s primaries. The second thing was the comment that these are the two youngest candidates. I had known that Obama was the youngest candidate, but I had never really considered the age of Huckabee. Back before Huckabee was a top candidate I noticed in my study of the candidates that Mitt Romney was the youngest of the major Republican candidates and he was a couple of months older than Hillary who was the oldest of the major Democratic candidates. That was an interesting split between the two parties in my mind.

Looking into the ages now I find that Huckabee is two years younger than the next youngest candidate (John Edwards) and only 6 years older than Obama. I wonder if part of this is more than just the rhetoric of change, but the evidence that the electorate is ready to pass the reins of leadership over to a younger generation. If Huckabee goes on to get the Republican nomination there is only one viable Democrat left who could represent the Baby Boom generation in the general election – that would be Hillary Clinton (unless by some miracle Rill Richardson can leap from 4th place to 1st among the Democrats).

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National politics

A Tax Debate Would Be Wise

Apparently the New York Times would like to have a public debate about taxes. The editorial board expresses their despair that none of the presidential candidates talk about taxes. I think that they are completely right that such a debate is necessary. Beyond that it seems that there is hardly anything that we agree about on this subject. When they turn to discussing their views as opposed to the positions and rhetoric of the candidates they start by saying:

Still, going forward, competent governance, let alone achieving great things, will require more revenue, period.

I consider it to be a very safe bet that they mean that on an perpetual basis. As a proponent of fiscal responsibility I could be sold on the idea that we need more revenue for the time being (meaning the next few decades) to help us dig ourselves out of the financial pit we are in (as a result of our spending in the last few decades). But I think that part of the solution will have to include reducing the spending on some government programs this should include increased efficiency in such programs, but wisdom dictates that it also include a reduction in some programs or services.

The editorial board suggests three opportunities that we can address in the necessary tax debate. Of those three, only one really strikes me as a real opportunity rather than empty dialog:

  • To create a system that does not disproportionately favor investment income over income from work.

I think we agree that the idea that the Democrats gave lip-service to when they gained the majority of both houses of Congress – paying for new programs with reductions elsewhere or new taxes – is a nice idea. The problem is that it really makes little difference if they do that without also making sure that they are actually paying for existing services as well, rather than allowing for deficit spending where it already exists.

The bias of the New York Times is irrefutable when they make statements such as:

. . . the exorbitant cost of the flat tax would likely be paid by cutting Medicare, Social Security and other bedrock government services.

If Medicare and Social Security are “bedrock government services” then I wonder how our nation survived its first 150 years without those services. Though I may easily be accused of being willing to punish poor people for being poor by cutting these government programs, I promise that I would happily support any such program if we did not have debts in the Trillions and if Congress were not deficit spending to implement the programs. Though I believe that these programs are not necessary for government, I am not one to believe that government can never do any good with such programs. The problem I see is in allowing our federal government to use illusory tricks such as deficit spending that even state governments (let alone private individuals) are not allowed to do. The fact is that if a business operated like the government the leaders of that business would be prosecuted and jailed in a truly just society.

More difficult than tax reform itself may be the search for a candidate with the political courage to speak frankly to the American people about the nation’s budget problems and the leadership skills to solve them.

There is a candidate with the political courage to speak frankly about our budget problems – his name is Ron Paul. They might decide to argue that he lacks the leadership skills to solve the problem but nobody can credibly argue that he lacks the political courage to speak frankly about it. I think that this is a debate we should have. Perhaps the New York Times could start it by hosting a debate or forum in which they could invite Dr. Paul to participate. They could also invite David Walker, the Comptroller General of the United States, who is also anything but timid in speaking about this subject. They can invite whoever they want to defend their positions where they obviously differ from these two men, but with their influence the debate would be hard to ignore once they got the ball rolling. We might even get all the candidates talking about it like they should be.

Categories
National politics

NYT On Health Care

I was impressed with the New York Times editorial The High Cost of Health Care. I don’t really have time to review it here right now (it’s quite long) but it is well worth the read and I would like to come back to it later to review it. They talk about some of the approaches to lowering our health care costs, but they don’t attempt to endorse any particular approach. I hope, and believe, that this was an attempt to paint a broad picture in advance of future articles which will explore the issue in more depth.