Campaign 4 Imaginability

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With the Ryan choice Romney said that he will deal with the problems.

The next test is:  Can you imagine this guy as a President?

With his acceptance speech I think that he earns the answer yes.

He has my vote in play, but he certainly hasn't gotten it yet.
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campaign 3: Truth to POWER

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The Ryan choice indicated a level of seriousness on the part of the Republicans and I wondered whether it would last.  The first day of their convention indicates that it will.

We have serious fiscal problems.  We have a bigger government than we have been paying for.

There are basically two obvious solutions both of which carry pain:  Pay more taxes to provide for the government benefits (SS and Medicare mainly) or reduce the benefits provided by the government.
(Of course a reasonable person can imagine many combination of parts of each, but we are looking for the essence of the disagreement from which sides are the two parties coming.)

My understanding is that:
The Rs would like to solve the problem by reducing the size of the government which means cutting the benefits.

The Ds would like to solve the problem by maintaining the benefits which which means increasing taxes and therefore the size of the government.

Until recently neither side has been willing to speak that truth to POWER.  In this case the POWER is the great middle class which loves those benefits and hates those taxes. The states have similar problems and in that venue (NJ, Wisconsin, Ohio) the Rs have recently been telling the people what the situation is and offering their solution and with it the pain.  It has been working.
When, on the national scene, Paul Ryan touched the third rail of medicare and proposed revising it = reducing benefits.  When told that it would ruin him, Ryan said, "There are some things that are more important than winning elections."

It appears that Romney is not going to play it safe.  He is going to tell the truth to POWER.

I was at a party about a year ago and told a solid Obama supporter that I wished that Obama would advocate serious taxes (not for immediate implementation) to pay for the social programs that we all three support.  He thought that was ludicris and laughed heartily.

I do not think that the democrats are up to telling their truth to POWER.
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U.S. Firms Move Abroad to Cut Taxes

Well, we have been told that some companies that moved their operations overseas are moving back to the good ol' USA.  But, we are now told that some public companies are moving their place of incorporation overseas to cut their tax burden, among other reasons. 

http://professional.wsj.com/article/SB10000872396390444230504577615232602107536.html?mod=WSJPRO_hpp_LEFTTopStories

Something to think about

If one proposes to increase taxes on the wealthiest 1% in the US, well and good.  If one proposes to increase taxes on the wealthiest 1% in the world is it still well and good?

If the answer is “yes” the 1% may very well include the American middle class but it is consistent.

If the answer is “no” then the question becomes “why not”.

Trapped in his legend

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For the poor unfortunates who have never lived in Texas I should tell you that in 1836 a small band (185 the song says) of American Immigrants and Mexican Natives placed themselves into an ancient mission called the Alamo and proclaimed themselves to be defenders of the Mexican Constitution of 1824 which had been overthrown by the dictator General Santa Anna.  They ended up (perhaps willy-nilly or perhaps with a line drawn in the sand) with no options except to defend it to the death against several thousand Mexicans in Santa Anna's army.  Which they did.   Among them was a legendary Tennessee frontiersman, member of Andrew Jackson's campaign against the Creek Indians, and former congressman, one Davy Crockett.

In the most recent movie retelling of this story there is a very poignant scene, before they are completely sealed into the Alamo, in which Davy Crockett contemplates his options and says: "If it was just me, simple old David from Tennessee, I might drop over that wall some night, take my chances. But that Davy Crockett feller... they're all watchin' him.
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think highly of him

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The following comes from the editorial a-big-ten-strategy-for-romney by George Will:

As Holman W. Jenkins of the Wall Street Journal astutely writes, “Obama’s great political talent has been his knack for granting his admirers permission to think highly of themselves for thinking highly of him.”

Perhaps this is the way it looks to someone who's last president made it hard for you to "think highly of him".
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Campaign 2012 Obama Foreign Policy

I am going to describe the candidates in several aspects of the job.  I am putting this up, not for your benefit, but for mine. I am soliciting your comments in the hopes of improving my own perspective.
The first is an update of what I wrote on Sept 11, 2011   Sept 2, 2011.

Obama’s foreign policy

What I hoped would be characteristic of Obama’s foreign policy went something like this.
1. Be strong where US security is involved.
2. Be reluctant to interfere inside other countries even “for their benefit.” Use all other available means first.
3. If you must go into another country, then go in carefully and get a lot of other countries to go with you so that it is (and appears to be) a world action.
4. Lay the groundwork for reducing the military budget (I would hope to about 3 % of GDP) AND reducing the military mission by a concomitant amount.
and finally I hoped that he would:
5. Agree with Walter Lippman’s belief that: "Foreign Policy is bringing into balance the nation’s commitments and the nation’s power, with a comfortable margin of power in reserve."
I hoped that he would consider that dictum in light of the fact that, in the last 60 years, our GDP has dropped from 50% to 25% of the world’s GDP. Then begin moving us away from the (unsustainable) KATN (kick ass and take names) U S foreign policy and toward the next proper (and sustainable) American role in the world: that of being first among equals.  For an example of how that could work without being  (or appearing to be) weak, see Fareed Zakaria's book:  The Post American World, 2.1.

So how is he doing after 43 months in office? Well, we have some examples. This is very preliminary and therefore subject to change – probably they will not go quite as well as I hope they will. So with that caveat

In the war in Afghanistan he upped the ante and increased American forces. How it will end is not clear. But he has showed himself willing to be quite aggressive in the war widely believed to be justified for American security. As aggressive as, say, Bush 41 was.

When the pirates had Capt. Richard Phillips as a hostage Obama directed the military to take them down directly and totally. They did it with coordinated gunfire that left 3 dead and one captured. I don’t think he checked with Congress about that and I’m glad he didn’t.

In Iran I suppose that he judged that our intervening would not increase the chances of a good outcome. Obama resisted the urge to get us involved in what could easily have become our third simultaneous war with Muslims. In Egypt there was a very strong institution, the Army, which had a positive attitude and appears to be able to handle that transition without any outside help. In both of these examples I think that what Obama understands (and some of his detractors do not) is that if we jump into these situations early in a big way we will cripple the revolutionaries because they will be labeled as U S stooges (= traitors).

In Libya where, again, we could not afford another war, somebody(?) got NATO (usually thought of as an extension of the US military) to undertake a very effective action in that country. That somebody got those folks in France, whom some ridicule as “cheese eating surrender monkeys”, to take a leading role in that action. His detractors call that achievement “leading from behind”. Finally in Syria, Obama waited a long time before ordering US sanctions on Syria. Some people thought it was an outlandishly long time. However, the great majority of Syria’s oil is sold to Europe. Obama and Europe have been doing a dance the last few months while they took turns increasing the pressure in Syria. The real potential for pressure in this case lay with the Europeans. Perhaps he is, again, getting the world to take a larger role. It might be appropriate here to recall Harry Truman’s observation that, “It is amazing what you can accomplish if you don’t care who gets the credit.”
Napoleon famously said, “If you set out to take Vienna, then take Vienna.”
Obama’s corollary is: “If you set out to get bin Laden, then get bin Laden.” 

These things are consistent with moving the U S role in the world from KATN toward first among equals.

On the negative side there are the leaks about the bin Laden mission and the mishandling of Fast and Furious and the stonewalling on it.

So I will give him at least a B+.

YAMSLT 3

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This is the Yellow Armadillos Math Science Literacy Test. Revised August 18, 2011

I expect political candidates that I support to be able to pass this test.

Q.1. If the annual budget for program X has a built in annual bump up of 11% per year and you reduce that bump up by 3%, then the change in the amount spent for program X is most accurately labeled as:
a) an 8% decrease, b) a 3% decrease, c) a 24% decrease, or d) an 8% increase.

Q.2. Can we eliminate the deficit by returning to the Clinton tax rate for those making over 250,000?

Q.3. Do you believe that, regardless of what the income tax rate is, cutting that rate will stimulate enough growth in the economy to increase revenue?

Q.4. Do you oppose teaching religious belief in science class?


Appropriate answers: 1. d, 2. no 3. no 4. Yes .

Tax medicare as income

To the receiver of Medicare it is insurance (very good insurance I might add).  That insurance has a value which can be calculated in a simple way (or complicated if one wanted to).  The government gives me that insurance like it gives me SS.  In the case of SS the govt computes how much I paid for it and  calculates the rest as income.  We should do the same for Medicare.  (I would do the same for any insurance paid for by an employer.  But that is another question.)

It is simple "fairness".  If you work you pay taxes on the income.  If you win the lottery you pay taxes on the winnings.  If the government gives you healthcare insurance, then you should pay taxes on it.

Notice that it is elegantly simple and also progressive.  This income would be taxed at the taxpayer's highest marginal rate.  Someone with enough income to pay at a higher rate would pay more.  I would pay (considerably) more.  However,  the poor (including a lot of our mothers) could add the value of their healthcare onto their income and still not be owing any income tax.

The proceeds should be placed in the Medicare Trust Fund.  It would go a long way to solving medicare's  long term problems and be quite progressive without the onerous label of "means testing" medicare.

If you have not heard about this proposal, that is because it would hit the biggest sacred cow in the American tax universe:  THE MIDDLE CLASS.

The reason both sides offer pixie dust solutions is that they want the public to believe that they are the ones who can solve the money problem WITHOUT hitting the middle class.  I do not believe it.

Of course the rich should pay more per person than anyone else,  they do so now, and they would pay even more with this proposal.  But you can't get it all from them.  The tax  loopholes uh "opportunities" that are owned by the middle class are huge:  untaxed healthcare, mortgage interest deductions, child deductions, and charitable contributions.  These are called tax expenditures and they are defended vigorously by all of the middle class's agents in Washington i.e. the politicians.

Of course, this is not a complete solution to the fiscal problem.  But it would be a significant step.
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Campaign 1: The Ryan Choice

It is a bold choice and it changes my perspective on Romney.  Bold in that it increases the likelihood that the election will be seen as a clear choice.  That clarity wins Romney some points with me.

My main concern is the money. 

It is hard to determine from both sides massive campaign of pandering to the middle class, what (if anything) either of them has in mind with regard to this problem.

I, of course, do not believe in the Republican approach with their tax cuts and fairy dust.

But they do seem to be saying that we have to cut spending.

The Democrats do not convince me that they are even serious about the problem.

For example if they use Mediscare (as they already have, showing a Ryan look alike pushing granny off of a cliff) it will suggest that they believe that there are no serious problems there and that no reductions will be needed.

The claim that a $70 billion/yr tax on the rich will solve our financial problems (which include but are not limited to a $1400 billion/yr deficit) without resorting to taxing the middle class borders on lunacy.

So if they get elected by promising folks that we will not have to give up anything, then how will they solve the problem?

The first job of a leader is to define reality. 
I see more reality from the Rs than the Ds right now.

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Paul Ryan, VP Candidate

Well what do you guys think of that choice?  I was not as surprised that he was asked as I was that he accepted.  I guess he hadn't read the words of John Nance Gardner, a two term VP under FDR, who said famously that the Office of the Vice President wasn't "worth a bucket of warm piss" (not my words, his words I'm quoting directly for historical accuracy).  It seemed to me that Ryan really took his position as chairman of the House Finance Committee seriously and felt that he was making a difference.  If VP Gardner's description of the VP office is accurate then there is not much of a difference he will be able to make as VP.  Of course you do get free housing.  It's hard to discount that as a pro to acceptance.  Ryan then will be living in a house paid for by the taxpayers (oh irony). 

Perhaps the party called upon his sense of duty or loyalty to the party or convinced him that his name on the ticket was their best chance of ousting Obama.  He is after all the anti-Obama, with Obama being the tax and spend Democrat and Ryan being the slash and save Republican.  The only problem with that, I think, might be if people start wondering why Ryan never made a peep when the Bush Administration was running up the national debt to over $10 trillion.  I guess he was just being a team player.

I really don't know if Ryan will help Romney or hurt him on election day.  It seems there are very few undecided left, percentage wise.  By all accounts Ryan is a decent man, smart as a whip and a fine speaker.  He'll likely eat Biden's lunch if they debate.  But I don't know if that will help since VP Biden has been known to eat his own lunch quite often.

Romney's taxes

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Romney should have released lots of tax returns no later than Santorum's withdrawal from the race.

When you know you are going to be attacked as the richman's richman candidate of the richman's party, there are a few things that you can do:

1.   Get a lot of disclosures about your money out there early and later refer to it as old news.  Now he is stuck with releasing them just before the election (now) or letting that mess sit there and stink.

2.   Don't have a horse of yours give a very exotic performance in the Olympics.

3.   Come out firmly against the "big banks" in some serious way as some sort of "Sister Souljah moment" to at least suggest that you are not their pawn.

Fiscal Cliff and More

"All together, the fiscal cliff’s total impact equals slightly more than $600 billion, or 4 percent of gross domestic product, and if no action is taken, the Congressional Budget Office projects the economy will shrink by 1.3 percent in the first half of 2013 as a result."

http://www.nytimes.com/2012/08/06/business/fear-of-fiscal-cliff-has-industry-pulling-back.html

I am totally frustrated with our "leaders".  From the outside looking in this looks like a total train wreck waiting to happen.   I would wager that it looks at least as bad from the inside looking in, if the viewer is not stricken with partisan political I-can't-see-the-forest-for-the-treesitus.  The numbers in this article speak for themselves.  I hate to sound like a broken record but now is not the time to be taking money out of the economy through taxation OR drastic spending cuts.  The worst part of these 4 years of almost total gridlock in Washington has most definitely been the uncertain business climate that it has created.  My clients aren't sure which way to turn and I am not sure which way to advise them to turn. 

I am sure that when Obama agreed to extend the "Bush Tax Cuts for the wealthy" at the end of 2010 that news was not greeted with enthusiasm by his base.  I understand that.  I have gone on record here as saying that I was not a fan of the tax cuts when they were put in place and I haven't seen anything to change my mind.  But there is truly a time and a place and now is certainly not the time.

One thing that government CAN do for business that I think we can all agree on is to try to provide a stable economic environment legislatively going forward so business people can make decisions based on how things are going to be with some degree of confidence.  It's been awhile since we had that.  This running everything right up to the deadline on every major issue hoping the other side will blink is just irresponsible childish governance.

And where are our leaders now?  Working diligently to fix this very serious problem?  Burning the midnight oil in smokey back rooms trying to come up with a deal?  Nope.  Gone home to convince their constituents of what a good job they are doing representing them so they can get reelected to go back to Washington for another fun round of political chicken, while businesses get jerked around and try to see the future in their crystal ball.  What other choice do businesses have?  Decisions must be made.  For the most part my clients are preparing for the worst.  Hunkering down.  Hunkering down is not good for an economy that is just limping along already.  So not only do we have the specter of the "fiscal cliff" but, and perhaps even worse, we have the business and investment community pulling back out of fear and uncertainty. 

I know we have self-professed optimists on the YA blog.  But I can't work up any optimism over these issues based on anything I have heard or read.  How about you?

Campaign finance

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This website from the Washington Post promises to keep track of the amounts of money spent in the campaigns.

Ted Cruz

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Ted Cruz won the Republican nomination for the US Senate seat in Texas that is being vacated by Kay Baily Hutchinson.

Most people see that in terms of the fact that he is supported by the Tea Party.

That may be short term, but long term I think that the main thing about it is that it represents the success of another Hispanic American in and through the Republican Party.

I see that as a good thing.   Good for the Republican Party's effort to broaden its base.  It will be good for the country if both of its major political parties have more of a multiracial constituency.
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August's question

This will mark the beginning of a discussion topic in the form of a question of the month series.
If you have a suggestion for question of the month send it to diogenes@twc.com.  Indicate whether you want your name attached to it.

The second question involves two people and their "carbon footprint" all other things about them are equal.

A.  Drives a minivan which gets 24 mpg and has no  descendants.

B.  Drives a hybrid which gets 40 mpg and has 3 children.

Which person has the larger carbon footprint?