What it means to be an American

I was quite moved by General Colin Powell's endorsement of Barack Obama over the weekend. Less because he supports Obama and more because of the way he eloquently expressed dismay over the tactic, implicit or explicit, from some Republicans that being a Muslim is automatically associated with being a bad person.

If you did not see it, please take a moment and watch this video.

http://www.youtube.com/watch?v=T_NMZv6Vfh8

I think that what makes this country truly great is the ability to take in people of all different cultures, religions, and elasticities and instill in them the values of what this country and our constitution was founded on. Liberty.

This country was founded on the principle of religious freedom. Sometimes that means freedom from religion, but this is a nation that has welcomed people of all faiths to practice their religion without the fear of the state oppressing them.

What is wrong with a Muslim American youth growing up believing that he or she can be president? I can't think of anything more American than that dream.

We the People, and Socialism

To begin I want to extend my thanks to our Blog host, the Angry Moderate, for allowing me to use his forum. Once and for all, let’s put to bed that he has a need to be anonymous on his own blog! I have come to start thinking of myself as an almost columnist, and the Angry Moderate as my editor/publisher.

OK, days to go before the election. If you are not swayed by one candidate or the other by now you are not likely to be swayed. However I wanted to address this biting rhetoric of “socialism” in our current political environment. It has been thrown around with little support in terms of academic fact. The ideas that it is “un-American” (another rhetorical buzz word this year) to be for things that use tax money to help out the less fortunate, and that only a strict constructionist/Federalist view of the Constitution is “pro-American” (a strange choice of buzz-words in an American election), both fail to get to the simple root of the issue. First let’s get rid of the word Socialism. Not because Socialism and Marxism and Communism don’t have some of the same ideas that are at the root of social programs, but because social programs, welfare programs, do NOT share most of the traits of those isms. Those programs do not prohibit free speech, freedom of association, etc. What they do is to provide some relief from the extremes of things like being born into poverty, being an unwitting casualty in unrestrained free market economics, being a victim of poor health, etc., and, arguably, set the grounds for future prosperity.

First let me say that nowhere in the Constitution does it explicitly say that capitalism, as we know it, is “American” nor does it say the opposite. It is important, as with all documents, to read the US Constitution in the context it was written. It was a document intended to protect Americans from the oppression of oligarchies, particularly, but not exclusively, those of Europe. It was by its very nature intended to enfranchise the disenfranchised, protect the weak, and foster the success of all citizens. So that must be our starting point.

For those that are strict constructionists, like those that argue the placement of the commas in the Second Amendment prevent any gun laws (more on that subject in another column), consider the following argument:

Like the more difficult to define idea of “context”, a preamble in a document by its nature and definition explains a documents purpose, underlying philosophy, and/or intent. In other words, in a very legal sense, the preamble of any agreement or contract is the lens through which all else that follows must be viewed. And in our country the Constitution is the ultimate binding contract. I know there are those that take umbrage with this interpretation, but they are also the ones that ask for the widest interpretation of the Second Amendment (Again more on that in another column – and, no, I am not “anti-gun”). The Preamble to the Constitution of the United States of America is very familiar to most of us:

“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessing of Liberty to ourselves and our Posterity, to ordain and establish this Constitution for the Unites States of America.”

Nowhere does this preamble explicitly say it is to promote our Prosperity. Now before you attack me, the idea of prosperity is wrapped up, implied, in that short phrase “general Welfare.” And later in other parts of the Constitution, Prosperity is further implied in the protection of private property. In no way am I saying that Prosperity is NOT part of the American fabric. My point is that Prosperity, and all that means, is only IMPLIED. So absolute Free Market Capitalism, a system set to create individual prosperity, is not sacrosanct in the Constitution, but rather a subject of interpretation. Therefore how we use our national treasure is also subject to some interpretation against that preamble, in particular the phrase “general Welfare”.

So what does the word Welfare mean? And no, I do not intend the pejorative use regarding social programs. According the Merriam Webster “Welfare” is “the state of doing well especially in respect to good fortune, happiness, well-being, or prosperity.” Note that Prosperity is but a small portion of that definition, included to be sure, but not to the exclusion of the other portions. So “well-being” is an equally important part of that definition. Well-being can extend to a myriad of topics, health, education, housing, etc. Again it is another subject of interpretation, not of absoluteness.

Consider that the Constitution was written and debated by some of the most learned, and courageous, men of their time, perhaps of any time in American history. They did not choose words frivolously. So the choice of the phrase “general Welfare” over the potential alternative “individual Welfare” is important. It therefore EXPLICITLY states that the Welfare in question is that of the body politic, the fullness of “We the People”.

So from the outset, everything the Constitution proscribes from the preamble forward, must be of benefit to the greater masses, not just the privileged few. And it is the privileged few, the 5% of our country netting more than $250,000 a year, more specifically the 1% that net more income than the lower 50%, that are most opposed to anything other than the current state of interpretation. Our modern American version of an oligarchy.

The phrase “general Welfare” is used only twice in the Constitution. First in the Preamble, and then in Article 1, “The Legislative Branch,” Section 8, Clause 1:

“The Congress shall have the Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the Unites States.”

Now don’t get to excited about that “shall be uniform” part, it does not mean that progressive Income Tax is unconstitutional. It just means that taxes on goods and services will not be set to favor one State over another within the Union. More importantly note that in the Preamble, and in Article 1, the first place taxes are discussed, everything is in the context of the “general Welfare”. So as with any legal document, it follows that all else in the document must continue to be viewed through the lens of the initial clauses. At this point it becomes clear that taxes are for the “common defense and General Welfare” of the people.

The framers of the Constitution were brilliant, if all too human, men. Their brilliance was in recognizing that a document that is absolute, with no room for interpretation, will not bend far before it breaks. They used the structure of the Constitution to set out the hierarchy of priorities. First there is “We the People,” then “The Legislative Branch, THEN the Executive. Each suborned in one way or another to the preceding. They were brilliant in understanding that the men who pass the laws will not always know how the men who execute them will interpret those laws. So they provided our 3 branches of government to keep each other in check. Their all too human flaws allowed for slavery, suppression of women, and other sins to remain encapsulated in law. But their brilliance outshines their flaws, as we have, by design, continued to refine both the letter of the Constitution and the interpretation of that letter over succeeding generations.

So my point, again I ramble before getting to it, is that while the last 25 years have been dedicated to one interpretation of the “general Welfare”, and to one form of capitalist prosperity, that does not preclude other options. The overall wealth of our nation has grown in these 25 years, but, that wealth has become more concentrated in the top 1% of Americans (both in relative and absolute terms), while the laws passed and the rules applied have served to shift the money from the pockets of the weakest to the pockets of the strongest. The vast majority of us are not better off now then we were 25 years ago. Our founding fathers would have found that state of affairs “un-American.” They would have welcomed an experiment in alternatives to rectify it. After all, they themselves saw this Union as an experiment, THE experiment, in equality and humanist principles. Principles based on, but not exclusive to Christian teaching, and THAT is also another subject for another column.

-ARC

The Weather Underground Velvet Girls

I have remained cautiously quiet on the blog about the presidential race, so far. There has been one current issue that is getting me off my duff to actually blog about. The issue has been beaten into the media by the McCain campaign. McCain has recently been robocalling, which basically means a robot dials all the phone numbers in its database and plays a recorded message. The message is that Obabma "palls around with terrorists". Additionally, McCain and Palin have been making the same arguments on the stump.

Here's the background. Barack Obama and John Ayers served together on a board on issues surrounding education. The board was for the Annenberg Foundation, which is one of the largest philanthropic organizations in the country. Mr. Annenberg was the United States Ambassador to the Court of St. James for the Reagan administration. For laymen, that's what the Ambassador to the United Kingdom is officially called. So, Annenberg was a Republican. Also serving on the same board with Mr. Ayers were many other Republicans, including the president of Northwestern University, which Obama pointed out during the last debate. Mr. Ayers was apparently part of a group called the Weather Underground that during the 1960's practiced domestic terrorism to try and end the Vietnam War. He apparently took a different direction later in life that he was nominated and elected to serve on a Republican board focusing on education. McCain's insinuation is that because Obama served on a board with Mr. Ayers, he must therefor share his same values in all respects. The classic guilt by association.

I want to share my own personal perspective on this issue. I recently completed serving on my local community's board on issues revolving around redevelopment. I was privileged enough to serve as the Chair in the final year of my term on the board. I served with about 20 other people from the community, both business leaders and residents. I enjoyed working with these people who shared a passion on making a difference and donating their valuable time toward forwarding our common goals for the community that we all love.

With all due respect to the people with whom I served, I don't really know them all that well, beyond, obviously the issues that we were working on together. For all I know, they could have been convicted felons. I doubt it, but my point is, as a member of this board, am I expected to do personal background checks on everyone that I serve with, in case I might want to run for higher office (which I don't by the way)?

Honestly, Bill Ayers himself could have come up to me on my first day on my board and said, "Hi, I'm Bill Ayers, from the Weather Underground." My response probably would have been, "Was that the group that had the song It's Raining Men or Sweet Jane?" And that brings me to my next point. I think you have to be over 45 to know who the Weather Underground even are. I can honestly say that I've never heard of these people before this campaign. Barack Obama was 8 years old when this group was active. I don't really remember who was active when I was 8 years old; do you?

When are we going to stop fighting the Vietnam War? I will share with you that I am just south of 40 years of age and the Vietnam War and the baggage that goes with it, means nothing to my generation. You baby boomers and older, really need to get past this. It's beyond old. We have so many problems facing us as a country, the wars, the economy, etc. I can't believe we have to go back to the 60's to conjure up old problems.

Ultimately, this smacks of desperation from the McCain campaign and the Republican that want this brought up. I am disappointed, frankly. I voted for John McCain in 2000. I thought he would run a better campaign for this. To see it come to this is a let down because I thought that he was better than this. I didn't like it when Bush's campaign took similar tactics in 2000 against McCain and I don't like it now. This tenuous guilt by association is petty and stupid.

For this and many other reasons, some of which ARC has articulated in his posts, I am voting for Barack Obama. It's time for a new generation to lead. Whatever conclusion you come to, please vote on November 4th.

Pearls Before Swine (he said intending irony)

Like many Americans I have been following the “debates” with interest. As anyone who reads the Angry Moderate knows I am already coming down on the Obama side of the discussion. But that does not mean I am closing my mind to the logic of each camps arguments. I am annoyed by the rhetoric and at this point will only reiterate the conventional wisdom that those that live in glass houses should not throw stones. But as usual I digress here at the beginning, so back to the argument. The two big debate points on the economy are revenues (taxes) and expenditures or more specifically earmarks (pork). I want to take up that second one in this piece.
I agree with most of the American public that earmarks as a concept are not a great idea. They are tagged on to bills that have nothing to do with the earmark and slip in as if they are skulking through the dark to sneak into your basement and lie in wait. And let’s face it, while the “Bridge to Nowhere” that was not built was a waste of tax payer money, it pales in comparison to the “Road to the Bridge to Nowhere” that WAS built despite having no bridge to feed. On the other hand there are no doubt earmarks that pay dividends well beyond the investment; ones for museums and parks come to mind. But put the debate on the value of this earmark or that aside and take as a given, for the purposes of this discussion, that we are better off without them. I want to take, as I am wont, a simplified and quick look at the US budget for one year. As the most relevant Fiscal Year (FY), 2008 (Oct 1, 2007 to Sep 30, 2008), is also just completed, I will use that budget year to illustrate the relative position of earmarks in our current financial climate. The numbers are rounded off, and no doubt there are some variations but I tried to use numbers that are easy to use for discussion that are still accurate, while being from easy sources to find.
Color By Number
To start with consider the funded US Budget for FY 2008. It amounted to $2.9 trillion ($2,900,000,000,000). It is hard number to get your head around so think of it as about $9,570 for every man, woman and child in the country (based on a population estimate for 2008 of around 303 million). (http://en.wikipedia.org/wiki/United_States_federal_budget,_2008)
Out of that budget earmarks amounted to approximately $16.5 billion ($16,500,000,000). Again, putting it another way, that is about $54.45 per person or just over ½ of 1 percent of each person’s obligation. (http://earmarks.omb.gov/2008_appropriations_home.html)
Now consider that the budget does not include all government expenditures. The wars in Iraq and Afghanistan are funded as supplemental above and beyond the budget. I would not be surprised if there are other supplemental appropriations to take into account but I will stick with those for simplicity (and again for ease of finding source material). The 2008 approved or allocated supplemental for Iraq and Afghanistan amounted to about $182.5 billion ($182,500,000,000). That cost comes to about $602.31 per person. (http://www.fas.org/sgp/crs/natsec/RL33110.pdf)
The total amount of revenue for FY 2008 was $2.66 trillion ($2,660,000,000,000) leaving a budget deficit of $240 billion ($240,000,000,000) or $792 of each of us. (http://en.wikipedia.org/wiki/United_States_federal_budget,_2008)
Stay on Target
But don’t forget the budget and therefore the budget deficit do not include those supplementals. So, a little quick math shows that a closer figure for the actual federal deficit for FY 2008 of $422.5 billion ($422,500,000,000) or about $1,394 for each US citizen.
This means the percentage of the total federal expenditures ($3.082 trillion) in FY 2008 taken up by “pork” ($16.5 billion) was almost exactly ½ of 1 percent. It would have reduced the deficit to $406 billion or to $1,340 for each of us.
So if you, like McCain, think that this is a focal point of fiscal responsibility in this election year you are, as the adage goes, “Penny wise and pound foolish.” (And don’t EVEN get me started about the nearly $1 trillion we have already obligated to the financial bailout)

-ARC

The Most Important Election in Our Lifetime (so far)

The race for the White House has been heating up lately. As a consequence emotions have been running high as both sides have been using emotional rhetoric to try and gain an edge. Nothing divided the two camps more than Governor Palin being selected as the Republican Nominee for Vice President. But like all other emotional propaganda that was just so much window dressing, meant to distract from the issues, and both sides are at fault for that. However, along came an even bigger news item which has begun to move the discussion back to real issues. The economy, specifically the “Wall Street Meltdown of 2008” (that’s mine, do you like it?). You would think 5 million average Americans in foreclosure or receivership would have got our attention, but no, it took malfeasance and mismanagement of some of the richest people in our country to make us sit up and notice. But see, even I am giving in to the emotional diatribe. So I thought I would put us through a short exercise to separate the emotion from the analysis. This is going to come in two parts. The first is a look at the five most important economic crises in the US over the last 80 years, and the second is a look at who we are turning to for ideas and guidance to end the latest. Let us see if we can determine some pattern, and a possible way forward.

“Those Who Cannot Remember the Past, Are Condemned to Repeat It” - Santayana

I believe that this election is the MOST important national election in 45 and possibly even 60 years. Given the market crisis, the global security situation, the growing negative consequences of the energy situation and the environment, and given US dominance and World reliance on the PAX Americana since the end of WWII, this may even be the most important election/political succession in the history of the modern (post Westphalia) world.

I do not throw that out as hyperbole. I believe it is a defensible thesis. Consequently we have a moral/ethical obligation to try and understand the history that got us here so we can find our way forward to a more stable, prosperous and safe future.

Consider before we move forward the supposition that in so far as the President, or Congress, affects the economy, it takes 2-3 years for their policies to have an effect, therefore they cannot take credit or blame in that "grace period". I am sure that this is debatable, but I think it is accurate. Clinton did not deserve credit for the economic up tic in 93 and 94; any more that Reagan deserved the blame for the economic malaise of the first couple of years in the 80s. So if we are too look for the root of any positive or negative long term or deeply impactful economic event we need to look at the people and policies in place 3-5 years before the event in question. So let’s start with today and work our way backwards.

The Wall Street Meltdown of 2008
I have been saying privately that we were headed for fiscal catastrophe since at least 2005. I sold my house in February of 2006 in part because I thought it best to get out with some equity. So if my gut was right then, it is more aptly named the crisis of 2005-2008 and we need to look at the period of 2002-2005 to find who was making the decisions that led us here today. Well it’s obvious to everyone that we have a Republican President and have had one since 2001. What is lost in the debate for some reason I cannot fathom is that Congress (both the House and the Senate) were dominated (I use that word because having a slim voting majority as the Democrats have now in the Senate does not constitute control) by the Republicans from 1994 to 2007. So both the legislation (Congress), and the interpretation and implementation that legislation (The White House) was controlled by the Republicans, meaning they must bear the full weight of the Government’s failure. Note I specify Government, because there is plenty more blame to go around, but this is already going to be a long piece.

The 2000/2001 Bursting of the Tech Bubble
Here we see that both sides of the political debate in the US must own up to some responsibility on financial mismanagement. When this mini crisis occurred the White House was long in the hands of the Democrats. However, as noted above the Congress had been in control of the Republicans for 6 years already. So, as Congress passes the legislation that either weakens or strengthens oversight and regulation, the Republican’s carry the largest blame, but the President can and should stand up and fight back if he or she disagrees. Therefore, the Democrats get to take about 25% of the blame on this one in my book. Mitigating factor – two other economic crises, largely out of the control, but not beyond the influence, of the US government contributed to this financial fiasco, those being the market crises in Latin America and Asia over the 4 previous years.

The 1988 Fender Bender
Let’s face it, it was not a crash, 1929 was a crash, 2008 will be remembered as a crash. 1988 was the second worst economic crisis of post agrarian America until this year, but now it is third. At the time the Republicans had held the White House for nearly 8 years. Additionally from 1981 to 1986 the Republicans also held the Senate, splitting control of Congress. So once again the Republicans had the controlling hand, but the blame is split because the Democrat controlled House went along. 60% Republican, 40% Democrat. No mitigating factor I can think of, but the handling of the crisis into the GHW Bush administration set up the economic recovery that Clinton capitalized on in the 90s.

The Mid 70s Recession
Now here is the beginning of the scary stuff. This recession came after 6 years of Republican control of the White House but the Democrats had and would hold control of both houses of Congress from 1954 till the Republican takeover of the Senate in 1981. But I have to withhold a verdict because of mitigating factors. The US had just come out of a long (nearly 10 years) undeclared and expensive war and OPEC manipulated oil prices to cause steep increases in the cost of everything imaginable. I remember Walter Cronkite lamenting gas going over 50 cents a gallon and wondering aloud how that could mean the end of the American way of life “as we know it.” Sound familiar? Replace Vietnam with Iraq, replace OPEC with oil speculators, replace 50 cents with 4 dollars and throw in the subprime debacle and you can see how the next decade could make the 70s smell like a bed of roses. And if you remember the 70s it was no bed of roses.

The Crash of 1929 and the Depression
Consider the symmetry as we review the political situation preceding the 29 market crash. The Republicans had taken the White House in 1921 and held it till 1933. They also controlled Congress, both House and Senate, from 1921 till 1931 (the first National election period after the crash). In this case it is obviously a Republican failure.

One last set of general observations on the history we so quickly and simplistically reviewed above. Today in the US more wealth is concentrated in the hands of the financial top tenth of 1 percent of Americans than since 1928. Additionally, those same people are taxed LESS than at any time since 1932. Think about that, and all it implies.

Those Who Would Save Us

Treasury Secretary
Well here we are September 2008 and Wall Street is a mess, average Americans are scrambling to figure out how they are going to heat their home, if they can keep it, while still putting $4 a gallon gasoline in the car to get to work. Who is going to save us from ourselves (a little sarcasm)? Right now our knight in shining armor is allegedly the current Republican Secretary of the Treasury, Henry Paulson. Secretary Paulson was confirmed into his position in 2006 so he is not the architect in any way of this calamity right? Remember how I said there was plenty of blame to go around, not just in the Government? Well Paulson could be the poster boy for that shared private sector blame. He was with Goldman Sachs since 1974, and held ever increasing positions of responsibility and influence in the firm until becoming CEO in 1998, when the company went public, until leaving for public “service” in 2006. So he is the main decision maker that took that company to the point where it joined the ranks of so many other overextended financial houses. By the way, Mr. Paulson is personally worth at least $700 million dollars and has suggested a federal bailout that would leave Goldman Sachs in private hands but receiving federal money. Let’s not get into his time during the Nixon Administration as assistant to John Erlichman and what that suggests about Paulson’s ethics.

McCain’s Economic Adviser
Ok, so Paulson is a Bush man you say? Let’s look at McCain’s first choice to help him sort out a subject he readily admits is a weakness for him. Who is the mentor of choice? Phil Gramm former Representative and Senator from Texas. Currently Gramm is employed as the Vice Chairman of the Swiss based USB Investment Bank. As of April of this year USB had the dubious distinction of being the European financial firm WORST hit by the subprime collapse in the US. He was also one of the 5 co-authors of the Commodity Futures Modernization Act of 2000 that created what is now known as the “Enron Loophole”. Two quotes from Mr. Paulson shed some light on his concern for average Americans:

“Most people don't have the luxury of living to be 80 years old, so it's hard for me to feel sorry for them." - (in response to a statement that a Social Security proposal would hurt people over 80)

"I recently told Ed Whitacre (former CEO of AT&T, who retired with a $158 million pay package) he was probably the most exploited worker in American history.”

Obama’s Advisers
Lest you think I only throw punches at the Republicans (true most are aimed that way) let’s look at Obama for a second. First, let’s address the allegation that his adviser is Franklin Raines, former Vice Chairman of Fannie Mae. Both Obama and Raines deny that Raines is an adviser. Though Raines does indicate that they have discussed the economy. So while not a damning indictment of Obama it does indicate he may reach out to some of the same ilk of tainted individuals that are found advising McCain. Finally, Obama’s declared “senior” financial economic advisers are Jason Furman and Austan Goolsbee. Not being an economist myself, I have NO idea who these guys really are. They are relatively young and there is not a lot out there to judge them by. That might be a good thing, as the old crowd got us in this mess. But it might be bad too. I just don’t have enough to judge, and that in itself is a bad thing.

Conclusion
Yep, this was all leading someplace! The bottom line is that the majority of the time the Republicans have been the ones to lead this country, in the last century, into economic chaos. Chaos that has had disproportionate impact on the middle class and working poor, while barely touching the rich. At the same time it has been the ones with their hands deepest in the laissez faire market economy that have shaped and overseen the markets when the markets have let America down the most. So, if this is potentially the most important election in our lives, and if the economy is the most important issue, then I have to take sides. It has to be someone new(er). It has to be someone most unlike those that have put us in this position time and again. It has to be Obama.
-ARC