July 31, 2011
How far could we move toward strengthening our locally-owned businesses if we spent our local money locally. Or more narrowly, what if just our anchor institutions within our communities mostly bought local? How many farms would spring up if school cafeterias bought their produce from local grocers and farms? Or consider if our hospitals, jails, and colleges were added to the scenario. An article which appeared in the Michigan Citizen answers discusses these questions:
Far too much of our recent history has been shaped by efforts to recapture the giant industrial production of a century ago. These efforts dominate our public policies in spite of the fact that statistics demonstrate that small, community-based businesses drive economic and creative development.
Small businesses generated 64 percent of the net new jobs over the last 15 years, creating more than half of our GNP. The majority of these businesses are locally based, employing a range of skilled workers, including about 40 percent of all high tech workers in the country, and they produce 13 times the patents per employee of large firms.
Several anchor institutions have voluntarily committed to increasing local purchasing there in Detroit:
Fostering small cooperative businesses means redirecting our spending in ways that encourage local production. That is why we should all welcome the recent efforts by the Detroit Medical Center, Henry Ford Hospital and Wayne State University to increase their local purchasing. These are key anchor institutions in Detroit that could have a tremendous economic impact on the local business community. Currently the combined spending of these institutions is about $1.6 billion annually. Less than 10 percent of that is spent in Detroit.
The City of San Francisco has taken it one step further by enacting policies for all municipal agencies and municipally-owned anchor institutions:
The city of San Francisco has taken even more direct measures. In an effort to stimulate local employment, San Francisco passed a local hire ordinance that requires all county-funded projects worth $400,000 or more built within 70 miles of the county borders hire at least 20 percent of their people from the city by the end of this year. Over the next seven years, the goal will be to hire 50 percent of all workers from within the city limits.
The author encourages their municipal leadership to set minimum purchasing requirements:
There is no reason why our mayor and city council cannot begin to establish policies that direct local spending by all of our anchor institutions. A modest goal of increasing local spending by these institutions to 15 percent would more than double what they are currently spending, stimulating further activity.
Think of the economic impact if our anchor institutions: the Clay County Hospital, Southern Union University, and all public schools in Clay County for instance purchased just 15% of their food and needs from within 30 mile radius? As noted elsewhere before:
Each school, prison, and public hospital should purchase a percentage of its food from local farms and ranches. We could rapidly revitalize local, family farming if a percentage of every school lunch was grown within its county’s borders. Consider the impact on small farming operations if each prison purchased all its food from nearby.
A recent study from the University of Minnesota corroborates this policy direction (ht to my mom). According to the study: Filling school lunch trays with fresh, locally grown foods that are easy to incorporate into school menus can contribute as much as $430,000 annually to a regional economy, according to new research from University of Minnesota Extension.
The study focused on five rural counties with only 20,840 students and examined the potential economic impact of farm-to-school programs. According to the author, “a $400,000 annual impact could support two to three full-time farms.”
$400,000 could go a long way in east, central Alabama too. Combine this $400,000 with the monetary velocity of money spent locally, the impact multiplies to $1.6 million.
July 31, 2011
In the political environment of today (see here and here), talk like this, unfortunately, will fairly quickly draw claims of treason within the Republican Party. Former Utah Governor and current Presidential candidate hearkens back to TR and is reported as saying:
“We will be judged by how well we were stewards of those (natural) resources,” said Huntsman, a veteran of three Republican administrations who until this spring was President Barack Obama’s ambassador to China.
“Conservation is conservative. I’m not ashamed to be a conservationist. I also believe that science should be driving our discussions on climate change,” he added.
I think him wrong to link conservation with “climate change”, tactically and philosophically, though. A person might deny “climate change” but still wholeheartedly agree for the need for environmental protection on respect-for-neighbor or basic common-good reasoning. I think those which favor supervision of pollution and our commons err when they exclusively declare “climate change” as the raison d’être for environmental protection.
On a side note: I find it interesting that, formerly, consideration and contemplation of environmental protection was not seen as some radical leftist policy: Pawlenty, Romney, and Gingrich have all supported previously environmental protectionist policies.
July 30, 2011
Investment advisers have this explanation of possibilities of our situation:
In June, the debt o f the U.S. reached the ceiling, meaning no more could be issued. That’s bad news for a country that continuously spends more than it takes in. Thus the deadline imposed by the debt ceiling has brought the issue to the forefront. (If the debt limit was reached in June and we’ve continued to spend more than our revenues, how have we financed the shortfall? The federal government has borrowed from federal retirement funds; the courts ruled in the past that when we do this, it’s not an expansion of our net debt, since America is borrowing “from itself.” The well-known deadline of August 2 is the date on which the capacity for borrowing in this way is projected to be exhausted.)
If we reached the debt ceiling in June, why is August 2 so important?
If the debt ceiling isn’t raised, as I said, some people will have to go unpaid. Among the candidates are our nation’s creditors. Failure to pay creditors is called default.
. . . Another thing I’m most sure of is that no one knows what the repercussions of default and downgrade would be.
Neither spending cuts nor tax increases would solve the immediate threat at issue.
When deficit spending is unavoidable, we have to borrow. Since we’re at the current debt ceiling, continuing to borrow requires that the ceiling be raised. If the ceiling isn’t raised and we can’t borrow, we won’t be able to make good on all of our obligations. Someone will have to go unpaid: employees, creditors, soldiers, retirees, vendors, etc. I don’t think anyone believes we can make good on all of our obligations without borrowing. Thus we have to solve this immediate problem. We can enact spending cuts and/or tax increases, but invariably these things will only take effect over the long run. In the short run we have no choice but to raise the debt ceiling and keep borrowing.
What are the obstacles to a solution?
It seems apparent that in recent decades, politics has become more partisan, and solving the nation’s problems has taken a back seat to adhering to ideology and getting re-elected. And what gets people elected? Promises of more: more benefits without increased taxation, and more take-home pay without reduced largesse.
July 30, 2011
Posted by greg varner under Politics
| Tags: adams
| 1 Comment
The country is so thoroughly given up to the spirit of the party, that not to follow blindfolded the one or the other is an inexpiable offense. Between both, I see the impossibility of pursuing the dictates of my own conscience without sacrificing every prospect, not merely of advancement, but even of retaining that character and reputation that I have enjoyed. Yet my choice is made; I am at least determined to have the approbation of my own reflections.
- John Quincy Adams in his diary, on sticking to his principles and supporting the British embargo, knowing that it would harm his home state of Massachusetts and get him thrown out of the Federalist party.
July 30, 2011
A few weeks back, Huntsville talk show host, Dale Jackson, tweeted @DaleJackson:
Do Democrats and idiots like @leftinbama really believe that the GOP “stepped in it” on illegal immigration? It is a #alpolitics winner.
He is right, I think; the Anti-Immigrant Bill is a winner in Alabama politics for Republicans. I really do not see much immediate political gain by opposing the anti-immigration bill. Sometimes though, you must throw out political strategems and advocate for the right. As President John Quincy Adams stated: Always stand on principle . . . even if you stand alone.” Or as Martin Luther King, Jr. expressed in his day:
On some positions, Cowardice asks the question, “Is it safe?” Expediency asks the question, “Is it politic?” And Vanity comes along and asks the question, “Is it popular?” But Conscience asks the question “Is it right?” And there comes a time when one must take a position that is neither safe, nor politic, nor popular, but he must do it because Conscience tells him it is right.
The Republicans will likely not see any electoral blow-back from their passage of Beason-Hammon. At this point in time, the majority of Alabamians probably support a “deport-’em all” policy. The last polling I saw revealed a visceral hostility towards immigration. I expect that similar polling drove Tim James to run his Gubernatorial ads last year in the gubernatorial primary and then Governor Bentley to follow suit during the run-off campaign.
Those Evangelical “conservatives” which have recently come out against the bill will not punish electorally the Republicans for this. It is so easy to justify the bill: “Well, something had to be done.” The unjustness of this bill will not overcome the decades-long repetition of propaganda about the moral evil of the Democrat Party. For evangelicals, this issue no way trumps abortion and homosexual marriage in priority.
And for the blue collar and rural whites, the “Mexicans are stealing our jobs” mantra is too potent to overcome unfortunately. The James ads were aimed at this audience and we saw how dramatically effective they proved to be.
This is the present reality of the situation in Alabama. Unlike in Arizona where the sponsor of that bill faces a recall election, Hammon, Beason, Hubbard, and Dial will face no electoral consequences to the terribly ineffective, poorly drafted, overly broad and fiscally indefensible piece of legislation. I expect vast portions of the legislation will struck down as unconstitutional with only certain parts standing like the E-verify mandates. (The Republicans will trumpet this as well as a badge of courage like George Wallace did. Republican strategists will, in fact, use our opposition to the law against us if not expressly then in illicit whisper campaigns.
On top of that, the law will accomplish its purpose. By attacking every area of the undocumented immigrant, they and their documented and/or citizen family members will be driven away as we have already seen in Georgia. As a consequence, Alabama will be weakened as a society culturally, morally, and spiritually. As Martin Luther King, Jr. taught:
There’s another reason why you should love your enemies, and that is because hate distorts the personality of the hater. We usually think of what hate does for the individual hated or the individuals hated or the groups hated. But it is even more tragic, it is even more ruinous and injurious to the individual who hates. You just begin hating somebody, and you will begin to do irrational things. . . . He comes to the point that he becomes a pathological case. For the person who hates, you can stand up and see a person and that person can be beautiful, and you will call them ugly. For the person who hates, the beautiful becomes ugly and the ugly becomes beautiful. For the person who hates, the good becomes bad and the bad becomes good. For the person who hates, the true becomes false and the false becomes true. That’s what hate does. You can’t see right. The symbol of objectivity is lost. Hate destroys the very structure of the personality of the hater. . . . . But long before modern psychology came into being, the world’s greatest psychologist who walked around the hills of Galilee told us to love. He looked at men and said: “Love your enemies; don’t hate anybody.” It,s not enough for us to hate your friends because to “to love your friends” because when you start hating anybody, it destroys the very center of your creative response to life and the universe; so love everybody. Hate at any point is a cancer that gnaws away at the very vital center of your life and your existence. It is like eroding acid that eats away the best and the objective center of your life. So Jesus says love, because hate destroys the hater as well as the hated.
How irrational is this law, yet we don’t see? How blind are we to its consequences
Politically, we need to continually show the fiscal irresponsibility of bill becomes overwhelmingly apparent in all its forms (swelling rolls of immigrant children in foster care, overcrowded local jails with undocumented immigrant, overwhelmed staff at Homeland Security processing e-verify requests for the 91,000 small businesses, loss of tax revenue from immigrant leaving.
We need to identify the cause when local fruit and vegetable prices rise significantly because of unharvested fields, or enough farms go out of business.
We must identify the culprits when enough citizens are disqualified to work due to e-verify errors.
I am afraid that that large segments of Alabamians will not care about its unjustness of the law but they will care of their pocket books.
No matter how impolitic, we must continue to fight against this law; it is a major civil rights issue of our generation. “As we look out across the years and across the generations, let us develop and move right here. We must discover the power of love, the power, the redemptive power of love. And when we discover that we will be able to make of this old world a new world. We will be able to make men better. Love is the only way. Jesus discovered that.” – Martin Luther King, Jr.
July 29, 2011
According to this international comparative study of small business policies:
The OECD data demonstrate that: The United States has the second lowest share of self-employed workers (7.2 percent) – only Luxembourg has a lower share (6.1 percent). France (9.0 percent), Sweden (10.6 percent), Germany (12.0 percent) the United Kingdom (13.8 percent), Italy (26.4 percent) and 14
other rich countries all have higher proportions of self-employment.
Not only do we lag in number of self-employed comparitvely but also are far behind in resilience based upon small-business employment:
The United States has among the lowest shares of employment in small businesses in
manufacturing. Only 11.1 percent of the U.S. manufacturing workforce is in enterprises with
fewer than 20 employees. Eighteen other rich countries have a higher share of
manufacturing employment in enterprises of this size, including Germany (13.0 percent),
Sweden (14.4 percent), France (18.0 percent), the United Kingdom (18.1 percent), and Italy
(30.9 percent). Only Ireland (9.6 percent) and Luxembourg (8.5 percent) have a lower share
of manufacturing employment in enterprises with fewer than 20 employees. (Raising the
cutoff for a small business to fewer than 500 employees does not significantly alter the
relative position of the United States.)
U.S. small businesses have a much lower share of employment than the comparison
economies do in the two high-tech fields for which the OECD publishes data: computerrelated
services and research and development.
The United States has the second lowest share of computer-related service employment in
firms with fewer than 100 employees (32.0 percent). . .
Similarly, the United States has the third lowest share of research and development related
employment in firms with fewer than 100 employees
This is not healthy for our economy nor our political institutions. (See here, here, here, here, here) Alabama is 47th in entrepreneurial activity. However, we need a change of mindset within our policy makers:
We know politicians love ribbon-cuttings; the bigger the better. Politicians also crave the major industry and big plant opening. (Usually, the politician had nothing to do with the creation of the business; they are just stealing credit from the entrepreneur.) However, real rural development believes “small is beautiful.” As discussed in this article entitled There is Such a Thing as Rural Development by Larry Lee, “rural Alabama and statewide policymakers must look beyond our traditional manufacturing economy.”
“We need to devote far more energy and resources to helping entrepreneurs get their feet on the ground and to helping small business grow and succeed. Alabama has known for many years that about 75 percent of all new jobs annually come from industry expansions. But there is nothing sexy when a cabinetmaker hires one or two people. There is not a groundbreaking or photo op for mayors, county commissioners and officials from Montgomery. We must recognize that, by and large, rural Alabama is the land of small businesses. Census data shows that of the 25,000 businesses in rural communities, 96 percent of them have 49 or fewer employees.
July 29, 2011
Posted by greg varner under Immigration
| Tags: Alabama
| 1 Comment
The Alabama Anti-Immigrant Law is having more an impact than its supporter’s rhetoric suggests.
According to the Times-Daily,
Representatives of the Alabama Department of Agriculture, Alabama Farmer’s Federation and other groups that work with growers said some farmers have told them they’ve already lost half their workforce. The state doesn’t have official figures yet, however.
Everyone knew this was going to happen; it had already happened in Georgia. What Beason, Hammon, and Hubbard don’t want to admit is their overly broad and aggresive law is impacting an overly broad category of people.
“We want secure borders and we work to comply with the federal rules,” Cook said. “But this new immigration law is robbing us of the skilled labor we need in the hardest economic times most growers have ever faced.”
One problem in filling horticulture jobs is that they require a high degree of skill that many people don’t have, he said.
“The legal people are apparently leaving along with the illegal people because they all want to stay together,” he said.
Why would a “legal” Hispanic-looking person want to stay in Alabama and continually be suspected of being “illegal?”
Proponents of the new law, including the primary sponsor, Rep. Micky Hammon, R-Decatur, said the law should open up jobs for Alabamians as illegal immigrants leave. People who work with the growers disagree.
“When they say the unemployment is so high so the workers have got to be out there, they need to come walk a mile in our shoes,” Cook said.
He also debunks the claim that immigrant workers drive down wages or take jobs that U.S. workers could have.
“We’ve tried to do the right thing,” he said. “We hire people that have been through federal screening and they know how to do the job. Don’t take them away from us suddenly now.”
Doug Chapman, Alabama Cooperative Extension System regional agent for horticulture over 10 north Alabama counties, agrees growers aren’t paying workers wages that are below minimum wage.
“I can tell you that all of my growers are concerned,” said Chapman who is based in Athens. “The bottom line is there is no local labor, period. A lot of my growers say they never had a local person come by and apply for a job.”
What Americans see as backbreaking, sweaty, dirty labor, many immigrants see as a ticket out of overwhelming poverty in their home country, he said.
“They don’t want to go back to conditions that are frightening and unbearable at home, but they’re leaving Alabama for states with less restrictive laws,” he said.
Chapman said something is wrong with the system if growers can’t find people to get the job done.
“Some people here would rather sit at home and collect welfare, but these immigrants are eager to work long hard hours for a better life,” he said.
July 28, 2011
I commented yesterday on the current Republican Party visceral (and ideological) opposition to any supervision of environmental contamination from big business and corporation. I stated expressly:
We very well may need to remove overly burdensome regulation that stifles economic growth. As evidenced by their all out assault on all environmental regulation, this is not the Republican’s desire. According to their ideology, ADEM and EPA are illegitimate period. They are opposed to even intelligent regulation that protects consumers and citizens.
My congressman, Republican Mike Rogers, now makes his radical and ideological commitments explicit. In an interview, he comments:
For example, we didn’t have an EPA under Jimmy Carter. Who says the federal government has to have an EPA. Every state has their own environmental protection agency. Why does the federal government need to be doing that? Department of Education: I’m a big believer that education is a state and local matter, why do we need a federal department of education? I think we’ll have to look at a lot of things that we’re doing at the federal level and ask ourselves, ‘is this really what the federal role?’ And if not, discontinue it.
There you go: the EPA is illegitimate. (As well as the Department of Education)
Let’s dissect his statement.
First, as I pointed out yesterday:
Republican doctrine wasn’t always so hostile to environmental protection. The Clean Air Act and the Clean Water Act of the 1970s had strong support from both parties. Republican President Richard Nixon created the EPA and told Congress in 1973 that America’s “irreplaceable heritage” had to be protected, arguing that “the price of economic growth need not and will not be deterioration in the quality of our lives and our surroundings.”
Jimmy Carter came after Richard Nixon; so we did have the EPA under Jimmy Carter.
Second, “is this really what the federal role.?”
At least as early as 1882, the constitutional legitimacy of federal oversight of pollution and enforcement of environmental protection was recognized and approved. Congress passed the Rivers and Harbors Act of 1882 which criminalized polluting rivers and navigable water ways. Federal Water Pollution Control Act of 1948 created federal water quality programs. Then there was the Watershed Protection and Flood Prevention Act (1954), Air Pollution Control Act of 1955, 1956 and 1958 Watershed Protection and Flood Prevention Amendments, Clean Air Act of 1963, Solid Waste Disposal Act of 1965, and it goes on.
I recognize that the constitutional limitation on Congress of just “regulating interstate commerce” has been stretched almost to meaninglessness; however, regulating environmental pollution is certainly within the province of federal power. Even the most strict originalist would agree. Air and water pollution do not stop at state boundary lines, it travels interstate.
There is certainly a federal role.
July 27, 2011
8000 square mile dead-zone in Gulf resulting from chemical run-off and poor supervision.
According to a article this weekend,
Alabama’s lax water protection laws leave the state’s rivers vulnerable to industrial pollution, sewage and muddy construction runoff, say several environmental groups pushing for updated water pollution rules more in keeping with those in other states. . .
The groups have drafted the Alabama Water Agenda, which promotes updates to water protection laws, increased water pollution inspections and tougher penalties for polluters.
“The key systemic problem in the state is the lack of a comprehensive water policy,” said Mitch Reid, program director for the Birmingham-based alliance. “We don’t have that one concrete law that says the rivers and waters of the state are part of the public trust and need to be protected for future generations.”
Reid said an important element in the new water agenda is a push to change the way Alabama approaches water regulation. Not enough attention is paid, he said, to how farmers and industries use both groundwater and surface water.
As evidence of adequate supervision,
One of the primary contentions in the petition was that the state was not providing ADEM with adequate funding to supervise the thousands of water pollution permits issued each year. . .
“Alabama has not increased the budget for ADEM since the 1990s, and the responsibilities of the water division in ADEM have gone up exponentially,” Reid said. “The state is moving in the wrong direction.”
Any hope for better supervision of our water system went out the window November 2, 2010. As has been evidenced by the last six months, the Republican Party viscerally opposes any environmental protection.
For example, earlier this year in February, a major Republican presidential candidate called on Congress to dismantle the Environmental Protection Agency, calling it the “tool of ideologues.” In March, the House Republican’s budget proposal sought to slash the EPA’s budget by an unprecedented $30 billion—one third of the EPA’s budget, and the biggest cut to any other federal agency. In a recent CNN debate,Republican Presidential candidate Rep. Michele Bachmann (R-Minn.) dubbed the EPA the greatest threat to American jobs. GOP presidential campaign and former Minnesota Gov. Tim Pawlenty promised significant cuts to the federal environmental watchdog. Alabama Senator Richard Shelby co-sponsored legislation to eliminate the EPA.
And just last week, as reported here in the Miami Herald:
Republicans in the House of Representatives are waging an all-out war to block federal regulations that protect the environment.
They loaded up a pending 2012 spending bill with terms that would eliminate a broad array of environmental protections, everything from stopping new plants and animals from being placed on the endangered species list to ending federal limits on water pollution in Florida,
The terms also include a rollback of pollution regulations for mountaintop mining and a red light on federal plans to prevent new uranium mining claims near the Grand Canyon.
Another Republican-sponsored bill that’s before Congress would weaken the nation’s 1972 Clean Water Act, taking away the Environmental Protection Agency’s authority to step in when it finds state water-pollution rules too loose.
Republican doctrine wasn’t always so hostile to environmental protection. The Clean Air Act and the Clean Water Act of the 1970s had strong support from both parties. Republican President Richard Nixon created the EPA and told Congress in 1973 that America’s “irreplaceable heritage” had to be protected, arguing that “the price of economic growth need not and will not be deterioration in the quality of our lives and our surroundings.”)
It is not that the public supports these current position, either:
According to Hueber, 67 percent of Americans reject Gringich’s demand to abolish the EPA. This includes 61 percent of Republicans. Sixty-three percent want the EPA to do more to protect air and water from polluters. Less than three in 10 Americans think it already does too much. And even fewer Americans, about 18 percent, want Congress to do what Republicans are threatening to do: block the EPA’s active role in updating pollution regulations.
“Americans prefer to protect the health of their families over allowing more pollution from corporations,” said Altman, climate campaign director for the NRDC, the organization that sponsored the survey.
“The bottom line is clear: Democrats, Republicans and Independents want politicians to protect the health of America’s children rather than the profit-driven agenda of big polluters,” he explained. “People get that the EPA is dedicated to protecting public health and want Congress to let the agency do its job.”
Alabama Republicans politicians have drank from the same stream of libertarian/corporatism. The movers and shakers in the Alabama Republican Party only see in civil government a danger of totalitarianism; however, they fail to see that same danger can arise when the government becomes an extension of private commercial corporations and interests. Their dogmatic philosophy has one standard by which most policies are judged: what is the impact on corporate profit margins.
This dogma disregards the older Christian principles and norms for civil government and business enterprises. Christian moral teaching has always judged business actions according to standards of stewardship. (In fact, the word “economy” is derived from the Greek word for “steward.” On the other hand, civil government is held to a different standard: public justice. When other institutions fail in their God-responsibilities, the civil government has been called upon direct them back when those acts deprive their neighbors and communities of the public honor and treatment due them.
Accordingly, when businesses fail to act as good stewards and consequently impact families and communities unjustly, the civil government is called to remedy that injustice and prescribe such immoral actions.
Economists call pollution an “externality.” It is a business “externalizing” a cost of their activities. Such externalizing occurs when, whether by haste or greed, it forces its costs on third parties not part of their activity or transaction; it is a form of theft and trespass. The obvious example is when a a company treats our waterways and air as a free dumping ground for the negative byproducts of their business activities. The community and its people pay for it though by devastated water systems, contaminated soil, and unbreathable air.
In addition to setting standards and limiting damage, ADEM merely police attempts to externalize costs and re-internalizes these costs by fines. This is not a radical idea. These public standards merely ensure businesses act in terms of care-taking, neighborliness, and peace as well as legitimate profit motives. (UPDATE: We very well may need to remove overly burdensome regulation that stifles economic growth. As evidenced by their all out assault on all environmental regulation, this is not the Republican’s desire. According to their ideology, ADEM and EPA are illegitimate period. They are opposed to even intelligent regulation that protects consumers and citizens.)
Christians have always seen that free markets must be based upon justice and operate within a moral framework. Adam Smith was a moral philosopher after all. What my Republican friends have forgotten is that if our land, soil, water, and air are not healthy and prosperous, then no economic growth in industry or trade or wealth will survive. There are no “rights” to plunder, waste, destroy, and corrupt our communities.
“But the care of the earth is our most ancient and most worthy, and after all, our most pleasing responsibility. To cherish what remains of it, and to foster its renewal, is our only legitimate hope” – Wendell Berry
July 25, 2011
In a stinging indictment of both political parties, Jeffrey Sachs, Columbia economics professor, called for the rise of a third party because of the failure of the Democratic and Republican parties. While I agree with most of his criticisms, I differ on his conclusion; we do not need a third party, we just need the Democratic Party to be true to its historic role. As I argued here,
In recent decades, however, instead of working out this mission for modern times, the Alabama Democratic Party rested on past accomplishments and entrenched power-sharing arrangements. It surrendered the intellectual and moral high ground and thereby failed to inspire this generation to claim the banner of the Democratic Party.
Sachs hones in on the Republican Party first:
Consider the Republican Party’s double-mantra that the deficit results from “runaway spending” and that more tax cuts are the key to economic growth. Republicans claim that the budget deficit, around 10 percent of GDP, has been caused only by a rise in outlays. This is blatantly untrue. The deficit results roughly equally from a fall of tax revenues as a share of GDP and a rise of spending as a share of GDP.
Spending, for example, is higher in part because of unemployment compensation, food stamps, and other federal spending to help the downtrodden in a weak economy. That’s the “cyclical” component. Part of the higher spending reflects long-term patterns, such as rising health care costs and an aging population, as well as America’s chronic addiction to wrongheaded wars and military occupations in Africa, the Middle East and Central Asia.
Taxation is lower also because of short-term factors and long-term factors. The short-term factors involve reduced federal revenues in an economy with high unemployment. The long-term factors involve repeated tax cuts for companies and high-income individuals that have systematically eroded the tax base, giving unjust and unaffordable benefits for America’s millionaires, billionaires, and multinational corporations.
The Republicans also misrepresent the costs and benefits of closing the deficit through higher taxes on the rich. Americans wants the rich to pay more, and for good reason. Super-rich Americans have walked away with the prize in America. Our country is run by millionaires and billionaires, and for millionaires and billionaires, the rest of the country be damned. Yet the Republicans and their propaganda mouthpieces like Rupert Murdoch’s media empire, claim with sheer audacity that taxing the rich would kill economic growth. This trickle-down, voodoo, supply-side economics is the fig leaf of uncontrolled greed among the right-wing rich.
He next goes after the Democrats for their malfeasence:
The Democrats of the White House and much of Congress have been less crude, but no less insidious, in their duplicity. Obama’s campaign promise to “change Washington” looks like pure bait and switch. There has been no change, but rather more of the same: the Wall-Street-owned Democratic Party as we have come to know it. The idea that the Republicans are for the billionaires and the Democrats are for the common man is quaint but outdated. It’s more accurate to say that the Republicans are for Big Oil while the Democrats are for Big Banks. That has been the case since the modern Democratic Party was re-created by Bill Clinton and Robert Rubin.
Thus, at every crucial opportunity, Obama has failed to stand up for the poor and middle class. He refused to tax the banks and hedge funds properly on their outlandish profits; he refused to limit in a serious way the bankers’ mega-bonuses even when the bonuses were financed by taxpayer bailouts; and he even refused to stand up against extending the Bush tax cuts for the rich last December, though 60 percent of the electorate repeatedly and consistently demanded that the Bush tax cuts at the top should be ended. It’s not hard to understand why. Obama and Democratic Party politicians rely on Wall Street and the super-rich for campaign contributions the same way that the Republicans rely on oil and coal. In America today, only the rich have political power.
Obama could have cut hundreds of billions of dollars in spending that has been wasted on America’s disastrous wars in Afghanistan, Iraq, Libya, and Yemen, but here too it’s been all bait and switch. Obama is either afraid to stand up to the Pentagon or is part of the same neoconservative outlook as his predecessor. The real cause hardly matters since the outcome is the same: America is more militarily engaged under Obama than even under Bush. Amazing but true.
The stimulus legislation, pushed by Obama at the start of his term on the basis of antiquated economic theories, wasted the public’s money and also did something much worse. It discredited the vital role of public spending in solving real and long-term problems. Rather than thinking ahead and planning for long-term solutions, he simply spent money on short-term schemes.
Obama’s embrace of “shovel-ready” infrastructure, for example, left America with an economy based on shovels while China’s long-term strategy has given that country an economy based on 21st-century Maglev trains. Now that the resort to mega-deficits has run its course, Obama is on the verge of abandoning the poor and middle class, by agreeing with the plutocrats in Congress to cut spending on Medicaid, Medicare, Social Security, and discretionary civilian spending, while protecting the military and the low tax rates on the rich (if not lowering those top tax rates further according to the secret machinations of the Gang of Six, now endorsed by the president!)
Sachs proposes the rise of a third party to these conditions:
The American people, who have said repeatedly that they want a budget that sharply cuts the military, ends the wars, raises taxes on the rich, protects the poor and the middle class, and invests in America’s future not just in Obama’s speeches but in fact.
America needs a third-party movement to break the hammerlock of the financial elites. Until that happens, the political class and the media conglomerates will continue to spew lies, American militarism will continue to destabilize a growing swath of the world, and the country will continue its economic decline.
A third party is not necessary if the Democratic Party would return to the ancient paths for the 21st century.
The Alabama Democratic Party must offer the people a distinct vision and agenda of reform. To be successful, it will need be an enlivening third-way: an alternative to the stupefying labels of right/left, conservative/liberal. The people of Alabama yearn for something that is not on the table currently. Generally today, Alabamians do not fit well within either party or the stated platforms. Our people demand something unique and different.
This alternative path cannot be some triangulation strategy nor a Republican-lite gimmick. Neither does it include an ideology of “completing the the New Deal.” Only 21st century solutions which appeal to Alabamia’s deepest convictions, morals, and spiritual heritage will suffice to satisfy this desire.
Consistent with the Democratic principles, by embracing policies which relocalize our economy, reject crony capitalism, rebuild wealth to the poor and working people, and rehumanize our markets, the Democratic Party itself would “break the hammerlock of the financial elites.”
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