Any person capable of angering you becomes your master; he can anger you only when you permit yourself to be disturbed by him.
Epictetus
Meet the Press: A Rant on 10/30/11: Part 4
The first 3 parts were on David Plouffe's comments. I didn't cover the tail end of the interview where David Gregory was trying to flesh out where Obama stood on the Occupy [Wall Street] movement. The movement is a rather incoherent group of malcontents, mostly to the left of ideological progressive Democrats, including Barack Obama, including, but not restricted to, social democrat/positive rights agenda policies, like a so-called living wage, free college education, etc. Obama and Plouffe know that any identification with this movement's infeasible agenda or public safety concerns could backfire on Obama's hopes to attract center/right independents and moderates next fall.
PLOUFFE: The president passed Wall Street reform to protect taxpayers from ever having to bail out big banks again, to protect consumers. The Republican Party here in Washington, for the most part, and I believe all the Republican presidential candidates want to repeal Wall Street reform...What you see is a party really in unanimity wanting to let Wall Street write its own rules.In short, the financial reform legislation doesn't do what it purports to do, it's too expensive and its costs get passed along to the banks' customers, and it fails to address the real problems (including failures of regulation at the federal and state level) during the economic tsunami. As for Plouffe's pathetic overtly partisan and disingenuous spin questioning Republicans' motives, banking is one of the most regulated industries in this country, the issue is more complicated than banks--it also reflects, among other things, credit rating agencies rating MBS, accountants looking over various companies' transactions and books, and the way the federal government ensures that government guarantees do not unduly put the American taxpayer at risk.
You can put lipstick on a pig, but it's still a pig. I'm tired of the all-or-nothing false choices presented by Obama and Plouffe. Nobody in the industry believes that the bill will do what it purports to do. In fact, a lot of us believe that it bakes in the risk of a big bank failure, which could result in riskier decision making, i.e., it constitutes moral hazard, even if we assume it works. Also, all of this protection is financed by fees or increased regulations, the costs of which get passed along to consumers. The financial reform package also ignored interim industry mechanisms set up for clearinghouses, e.g., the whipping boy derivatives market. It was pushing on a string in other federal regulatory empire building, e.g., consumer credit, debit card fees, etc.: what did debit card fees have to do with the economic tsunami? Ironically, the Democrats rewarded what most of us saw as the party responsible for a huge part of the easy money problem underlying the real estate market bubble by vesting even more power in the Federal Reserve.
But more importantly, Plouffe assumes what is definitely not proven and merely asserted in an incoherent manner that the "greedy banks" were responsible for the economic tsunami. Let's point out that many, if not most banks resisted former Treasury chair Paulson's threats to take unwanted TARP loans. This wasn't like Government Motors and Chrysler's open pandering for the federal tit. Indisputably, what parties gained the most from TARP funding? AIG; the GSE's (Fannie Mae and Freddie Mac); the listed auto companies. Did some banks fail during the crisis? Of course. So have retail chains like Blockbuster, Borders, and Circuit City. And restaurant chains like Steak and Ale and Bennigan's.
In any event, where did the financial reform address the real problems: the general incompetence that I see of government regulators? How did anyone with a functioning brain not realize that housing prices increasing above income trends were not sustainable? How did anyone not know that approving mortgage loans with little or no collateral or job verification at a market top was problematic? (I KNEW we were in a bubble in the mid-2000's when I started seeing infomercials talking about the money to be made flipping condos; that can't happen unless we had easy money out there.)
On to the other piece of work that Gregory interviewed, during his Isaacson (Jobs biography) roundtable, the former Michigan Governor.
FMR. GOV. JENNIFER GRANHOLM (D-MI): [Obama] had to go through a period of time of demonstrating that he was willing to compromise and demonstrating that the Republicans were not willing to compromise.This particular politician is all about spin and disingenuous rhetoric; this is not the first time I've heard this type nonsense from her. There is no way for Granholm to escape the fact that the Democrats during the 111th Congress increased domestic expenditures by roughly 24% (over and beyond temporary funding like the stimulus). Granholm's allegation that Obama has been willing to compromise is a deliberately misleading lie. Obama has not made any significant domestic spending cuts at the same time that state and local governments have been cutting programs and laying off people; in fact, the federal government added over 10% to its workforce.
As I've also mentioned in recent posts, President Obama failed to back the proposals of his own bipartisan deficit reduction committee which had majority support. Every GOP senator on the committee voted for the package. That's an undeniable fact. (Only one Democratic senator voted against it.) So where's the lack of compromise on the GOP side?
PLEASE. The compromises that Obama has hinted at (although not formally) are looking at things at cutting future projected budget increases and maybe stretching the retirement age over time--but absolutely nothing in the short term on anything; he even refused to release unused TARP funds.
His idea of "compromise" is to demand immediate/short-term permanent tax increases for the upper 1% of taxpayers in exchange for promised future spending cuts, probably deferred after his Presidency. We've seen this game played against Reagan and Bush Sr: the Democrats promised to cut multiple dollars of spending for every dollar in tax hikes, and the spending cuts never happened. The Democrats have lost their credibility.
Republicans are concerned about taking money from higher-income people whom spend and invest with their own money. Savings and investment are the seed corn for future economic growth. When businesses grow, they hire more people. Taking money that can be spent far more efficiently by the people whom earned it to throwing their money down the federal rathole. Of course, don't expect Granholm to point out $70B of additional revenue from higher-income taxpayers hardly makes a dent in $1.3T deficits being run up by the Democrats in Congress and the President.
If Democrats were willing to go beyond game playing with baseline budgeting and make REAL cuts in existing/next budgets, we conservatives might agree to an across-the-board tax hike--not just on the 20% of national income going to the economically successful, but commensurate burden across all income quintiles.
But I'm fed up with Obama, Granholm and other populist ideologues trying to rationalize stealing money out of other people's pockets.
GRANHOLM: I mean, Romney's the one who should apologize to his base because he's--he, I mean, he's flipped on core issues. I mean, this is not about more information on abortion or stem cell. I mean, this week I count, I was trying to count this week: the collective bargaining issues in Ohio, climate change, the flat tax, and ethanol. George Will said that he's like a pretzel. I think he's like a wet noodle.I'll let Romney defend himself. In yesterday's post I talked about Romney's so-called flip flops and pointed out Obama's rather glaring inconsistencies. I'll address the collective bargaining issue in an upcoming post, but Romney has a problem similar to John Kerry and Barack Obama, at least from a campaign perspective. Kerry was notoriously nuanced (remember his voting for the $87B before voting against it?) Barack Obama was well-known for being long-winded in the early Democratic debates. I'm somewhat aware that Romney tried to sound agnostic on Issue 2 which sustains public sector collective bargaining reforms; more recent polls suggest that a clear majority opposes Issue 2.
My personal feeling is that Romney was worried about alienating moderate and independent voters whom are leaning against Issue 2 (because they're buying into union propaganda that collective bargaining is about "having a voice"--not about arcane rules that grossly spike public sector compensation at the expense of taxpayers). [I discussed the point in detail earlier this week, pointing out how union rules have contributed to budget problems for the state of California and also our price competitiveness in the auto industry.] So Granholm is intentionally mischaracterizing what happened here; after all, Romney is running to be President, not governor of Ohio. I think Romney would have been better served to simply comment that union contracts tie the hands of government executives trying to cut state budgets; in some states, for instance, LIFO policies may tie the hands of school administrators and force them to lay off talented young teachers. He could have phrased his position like, 'I don't know enough about union contracts in Ohio to know if the same type of abuses in Wisconsin happen in Ohio, and Ohio voters will need to make that judgment. However, I do respect Governor Kasich's judgment.'
I wrote a post several days ago where I gave Romney advice, including 'keep it simple, stupid!'. But, for example, I've explained how additional facts, such as the recent ClimateGate scandal, could be used to explain a position shift. I don't think Romney is well-served by being overly precise and detailed in his statements.
MR. GREGORY: Governor Granholm, Karen Tumulty and Perry Bacon [this week] wrote, "Although the Republican candidates differ on the specifics of their plans, the frame of the argument against the current White House occupant is the same: Obama contends that the rich are not paying their fair share of taxes, the GOP candidates counter that wealthy Americans, along with everyone else, are paying too much. What's bloated, they insist, is the government."
GRANHOME OK. But so this to me is driving me absolutely crazy ... 80 percent of the revenue growth, of the growth in income went to the top 1 percent over the past 30 years, 80 percent. ...What's the tax policy that's going to create jobs in America and that's going to provide middle class jobs here, rather than giving money to corporations, etc., that--where they can just take that extra money or to capital gains investors and invest it somewhere else?...Obama can't pay the Republicans to be able to get them to compromise. We've got a country where we do have this huge inequality...There was a report out this week that said that among the 31 advanced countries, the United States is in the bottom tier with respect to income inequality, poverty, poverty among children and poverty among seniors.Granhome seems to be referring to the recently released Bertelsmann Foundation report, where the US ranked 27 of 31, ahead of Greece, Chile, Mexico and Turkey. I suspect there are some major methodology problems with this report; as of this writing, I have not reviewed the piece in detail, but for instance, there could be issues with a large number of unauthorized aliens averaging well below average household incomes. For example, most Latino unauthorized aliens have a high school degree or less; lower-skilled work is usually compensated less because of labor supply/demand. A number of income inequality studies fail to adjust for government transfer payments and related goods and services. One particular red herring is a methodology error I mentioned in posts several months back: the apples-and-oranges statistics of infant mortality. In essence, we (the US) report statistics over a wider range of babies (say, for example, premie births) than other countries; a lot of countries simply don't count high-risk births in their statistics. We know the US has the best medical care in the world.
I mentioned in a recent post that a lot of the income inequality studies out there are misleading bunk--and Granholm and I have a different world view. I consider misguided and counterproductive progressive Democratic social policies as not only throwing money ineffectually at a problem but fostering an undue dependence on the government which undermines individual virtues, the foundation of income mobility. Playing the victim card, which Obama, Granholm and every other progressive Democratic politician I know plays, and scapegoating higher-income people do absolutely nothing constructive in empowering people to take responsibility and initiative and move forward with their lives. When I was a 19-year-old graduate student leading freshman calculus problem session classes, I had students as old as my Dad in my class; as a teaching fellow with full instructional responsibilities at UH, I had middle-aged women in some of my classes. It's never too late to go back to school, earn those credentials. But fanning the flames of class envy is one of the most irresponsible and unethical things a politician can ever do.
I do want to make a couple of comments on the income inequality issue. First, I don't happen to agree with oversized compensation for most company managers--particularly for those whom don't earn outsized returns for their shareowners. But what I see happening is that top managers and owners may do very well relative to, say, the median worker compensation, they also are willing to pay well for the right talent to help them achieve their revenue/profit goals, and even if the median salary is less impressive, it may be very good pay relative to comparable external opportunities. What Granholm and others don't see is that this is a win-win situation. In this economy, a job is a job. The great thing about America is if you think you can do as good a job as your $13M/year CEO, you can create your own company. Warren Buffett is one of the richest men in America, but 15 years ago, he was living in the same plain house he bought decades earlier and was driving an older model car; most of his wealth will go to charity. The point is--if Buffett is living in a house like yours and driving a car like yours, what difference does it make he makes more money? He's done phenomenally well as an investor, and his investors have gotten rich with him. If you've become a millionaire off his investments and he's a billionaire, why should you care he's done better? He's the one whom finds the right investments.
Let me close this discussion by quoting from one of the many debunking income inequality/income mobility posts on MJ Perry's Carpe Diem blog: The "Imaginary Hobgoblin" of Income Inequality:
Gini coefficients are a statistical measure of dispersion that quantifies income inequality on a range from 0% for complete equality to 100% for complete inequality where one person receives all of the income... [Based on US Census data] the Gini coefficient for full-time workers increased gradually through the 1960s, 1970, 1980s, and then stabilized in the mid-1990s (after rising from 34% in 1967 to 39.5% in 1994, see top chart) and hasn't changed at all in the sixteen-year period from 1994 (39.5%) to 2010 (39.7%).Political Humor
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| Courtesy of Fox News Channel |
"I like Halloween. It gives you a chance to dress up like something you're not, you know? Like when the Miami Dolphins put on football uniforms." - Jay Leno
[Barack Obama wanted to go unnoticed so he decided to dress up like his former Ambassador to China and GOP Presidential contender, Jim Huntsman.]
"President Obama had his annual physical. Doctors say he is in excellent health, except his blood pressure. It's 70 over 14 trillion." - Jay Leno
[The physical was going fine until Dr. Ron Paul started talking politics...]
Musical Interlude: My Favorite Groups
Foreigner, "Hot Blooded"
