Who Is to Blame For America’s Present Economonic Malaise?

If you listen to the Mitt Romney political ads it is entirely Barack Obama’s fault that we have not already seen a complete recovery.  And if you listen to Barack Obama political ads it is the failed policies of the Bush-era that are to blame.  Personally, I think there is more than enough blame to go around that neither party is any more guilty than the other.

But first, let’s look at the world economy.  To look only at the American economy is a mistake because we do not operate in a vacuum.  Independent of what has been happening in America, Europe has gone through its own economic travails chiefly on the shortcoming of the Euro and the countries who use it as their sole currency.  In particular, Greece, Italy, and Spain have had it the worst.  Right now, Spain is reporting an unemployment rate of 25% which is similar to the U.S. great depression of 1929 – 1934.  That the Greek government has not gone bankrupt is largely due to the banks of Germany insuring Greek debt.  But northern Europe is hardly exempt from this as the Bank of Scotland is on particularly shaky ground at this point.

What does all this have to do with the U.S. economy?  The Bank of Scotland owns Citizen’s Bank which is headquartered in Providence Rhode Island.  Similarly, U.S. corporations have investments in every country in Europe and are therefore affected by that economy.  If a large U.S. conglomerate, say Ford Motor, is experiencing the European downturn, as it is, then that necessary reflects upon its overall corporate earnings.  And, as we saw in the Wall Street melt-down of 2009, corporations like AIG have considerable overseas accounts where they are insuring debt and investments.  If Europeans companies are defaulting or failing to make payments on their debt, that too necessarily affects U.S. corporations.

President Obama’s $750 billion stimulus plan has been roundly criticised by the Republican party.  They are suggesting that it did not work.  If it had not worked unemployment would have continued to rise and that just did not happen.  It did not, unfortunately, have the hoped-for effect but that does not mean it was a failure.  Every single dollar of that money, at least initially, went into the U.S. economy.  There is no where else it could have gone.  Was it as effectively used at it could have been? No, and that is where Obama failed.

People love to look at two journalistic publications and quote them as being authoritative on economic, and other, topics, the conservative Wall St. Journal, and the liberal New York Times.  That fact is, neither is quite so authoritative as they would have to believe.  The WSJ has more weight in the field of finances because that is its entire focus.  Even so, the people who write such articles are journalists who have a vested interest in reporting in a manner pleasing to their readership.  Simply put, such articles are biased towards conservatives which means they will emphasise data that supports conservative ideals and give less weight to data that supports more liberal ideas.  The New York Times, of course, does exactly the same thing.

The real question that should be asked in this presidential elections is, how much effect can the government, and even more so, any single person, even the president, have in the nation’s economic affairs?  The government is, by definition, the guardian of the public trust.  In deriving its power from the people, it is supposed to act in the best interest of all people without favoring any single person or group of people.  In the late 19th Century and early 20th Century, people like Rockefeller, Vanderbilt, Carnegie, and a few others, were in virtual control of the U.S. economy.  Because of that, the Chicago fire of 1872 helped precipitate the economic crisis of 1873.  Wall Street and corporate America was entirely unregulated and did as it pleased.  Corporate trusts and monopolies were accepted practices.  The titans of business and finance had themselves so well insulated from all civil and criminal prosecution that they were able to act with impunity.  But then during the Populist era, McKinley, Roosevelt, Taft, and Wilson, laws like the Sherman Anti-trust Act were put in place to curb these excesses.  The public demanded that the government regulate and pass laws to reign in these men of great power and influence.  Corporate America was reigned in by 1920, and then after the collapse of Wall Street in 1929, the U.S. financial concerns were also reigned in.  In both cases the method of reigning in was the use of regulation and oversight.

Contrary to concerns raised by industrial giants and financial gurus of those early days, America boomed until 1974 when America was hit by an artificial oil shortage, the inception of the oil cartel, also known as OPEC.  Democrats, largely in power at the time, responded slowly and poorly.  But when Reagan took office in 1981 he decided, and sold a rather naive American public, on the idea that heavy government regulation was holding back the expansion of corporate America.  Had anyone at the time been versed in history they would have instantly known that nothing could have been further from the truth.  The truth was, corporate America, particularly in heavy industry, had not bothered to retool after World War II and were still using 1940 technology while rising industrial giants like Germany and Japan had entirely retooled and were on a firm footing to sell in a global economy.

The 1950s and 1960s American domination of the electronics market, for example, quickly gave way to the Japanese, and in time to Taiwan, Malaysia and other Asian countries.  America was importing cheaper steel from Germany, and then cheaper, and better made, Japanese cars.  It was not until the bailout of the American auto industry in 2009 that it became apparent to all that Detroit’s decision the all the status quo had been an abysmal failure, and only a government infusion of cash would save it.

When Reagan brought about the deregulation of corporate America he was effectively saying, “We trust that corporate America will behave itself and always work in the best interest of America.”  You would have to be a fool to believe such things.  Corporations, by their very nature, always and only serve in their own best interest.  And that is exactly as it should be!  They are not required hold sacred the public trust, that is the government’s role.  Good business practices dictate that you will always buy from the least expensive source.  If that source happens to be China then that is where you buy.  It is unreasonable to expect American businesses to act otherwise.

As to what the U.S. owes foreign governments the Romney’s campaign that Obama has borrow money from China is foolish!  Does the U.S. government owe China money?  Absolutely!  But that comes as a result of international commerce.  In an attempt to gain a foothold in mainland China, a number of large U.S. corporations have invested heavily in China.  In doing so they necessarily us U.S. dollars.  And what is a dollar but the federal government promising to pay.  It is a debt that says the federal government guarantees payment on each and every dollar proffered.  When China gets those dollars it can then put a demand for payment to our government.  One form of payment, of course, is gold.  But whatever form that payment takes it is always between governments and not individuals.

One thing every American needs to be aware of.  About every 25 years or so America goes through an economic downturn, some worse than others.  This is one of those.  Most such events happen as a result of what is called a “market correction.”  When stocks do not properly reflect their value of the company they represent, this overvaluation brings a downturn.  This time is was the real estate market that was way overvalued.  Part of it was over-investment, but another part, and more important, was a lacking in regulation and regulatory oversight that allowed speculators to reap huge profits where none should have existed.  This was the state of the “sub-prime” market.

American businesses resist regulation because they want as free a hand as possible in doing business.  But the truth is, regardless of the degree of regulation, they are going to continue to do business in a manner that reaps them the greatest profit possible.  And that is exactly as it should be.  But it is not, by any stretch of the imagination, the responsibility of the government to assure our economic success.  That is the responsibility of corporate American and there is one thing you can always be certain of, corporate America will bring about success regardless of anything and everything else.  That means that they were responsible for the malaise and they will be in line for the credit when things improve.


Got Your BA or BS Degree? Don’t Stop There!

Most people, by the time the finish their first college degree only consider getting into the job force as quickly as possible.  They feel their college loans have a stranglehold on them, and that it is only responsible to get a job and start paying them back.  While it may be the responsible thing to do, it may not be your best next move.

Now, more than ever, entering into fields that require a college degree only gets you in the door.  Once there you discover that to truly get ahead you are going need a graduate degree of some sort.  And certain professions, teaching chief among them, require a master’s degree within a certain time period.  But what if you are one of those people who get a pretty good BS degree and then find it is not what you really want to do?  Here are a few suggestions of master level degrees that do not require a comparable bachelor’s degree.

Master of Science in Mathematics — I spent a career in the field of engineering.  But one of the most sought after persons in that field was not an engineer at all but a mathematician.  Why?  Engineering, and many other fields, require a lot of mathematics to support it.  Mathematicians are frequently used for their analytical skills in resolving not just engineering problems, by problems in physics, business, medicine, and a large array of research fields.  The demand for a person with a master’s degree in mathematics has been and is likely to always be high.

Master in Business Administration — It is not unusual for a person to get a BA degree in economics, advertising, marketing, and many other fields only to discover that they can greatly improve their situation within their company by getting an MBA.  Having an MBA is attractive in fields that may see far afield from business such as public policy, government, and even engineering.  No organization exists successfully in the world today that does not have someone within who does not have a keen understanding of business, and is therefore likely to have an MBA.

Nurse Practitioner / Physician’s Assistant — While both these degrees require a prior degree in nursing or allied field, they are in great demand today and that demand is growing fast.  Right now it is believed there is at least a 14,000 shortage of physicians.  And while a NP or PA cannot fully take on all the responsibilities and duties of a certified MD, he can help fill in the gaps where they do exist.  The needs for NPs and PAs is expected to grow for the foreseeable future.

If you are expecting to receive your bachelor’s degree in the near future or have recently received one, the time is now to plan for your next degree regardless of you field of choice.  Once you have left college behind it becomes increasingly difficult with each passing year to return.  And if you are in either of these situations and have come to realize that you have the wrong degree, by all means, return to college and get the right degree!  Master or bachelor!  Remember, as long as you are enrolled and attending college your student loans are not due.  And even though it means increased debt, in the long run you are putting yourself in a better position to pay off that debt sooner rather than later.

Understanding Socialism

The Republican Party likes to demonize certain Democrat ideas of being socialist, the idea being a direct correlation between socialism and communism.  While socialism is certainly a hallmark of communism, it existed in certain forms long before communism.

In 17th Century Massachusetts the town of Dedham was founded as a utopian community.  In those days Dedham extend from what is now South Boston all the way to Plymouth.  Today’s Dedham is a smallish town not far from Boston.  The next utopian idea happen at what was called Brook Farm near Boston.  It too was a utopian/socialist attempt that failed.  But these were not isolated attempts.  Other attempts in states like New York happened throughout the 18th and 19th Century.  All, of course, failed, but none was ever condemned as they were mostly economic endeavours.

Socialism got its greatest traction in 19th century Europe.  It came as a result of the old feudal systems still in place in much of Eastern Europe, and to a lesser extent because of Western European monarchies and their tendencies towards excesses of self-enrichment.  It is no coincidence that Word War I put an end not just to the Russian monarchy but also the Italian, German, Prussian, Polish, Austrian, and numerous others.  The cost of waging war is so great that the armed populace that monarchies sent to the battlefields turned on their own governments.  The Czar was replaced by the Soviet, the Kaiser by a Chancellor, and so forth.  The people, impoverished by these monarchies, demanded a redistribution of wealth and the leaders of the various revolutions were only too willing to oblige, and in doing so, gain wide-spread support for their particular cause.

In the first half of the 20th century, socialist groups were not necessarily liberal or left-wing.  The formal name of the ultra-right wing Nazi party of Germany was the National Socialists.

The United States in the first 20 years of the 20th century had a number of socialist mayors, congressmen, and other elected officials.  And if you lived in the United States in 1936, 1937, and 1938, and understood the evil that Hitler was visiting on his people, you supported the German Communist party as it was the only opposition to Hitler at the time within Germany.  They were throughout World War 2 the underground in Germany.  Similarly, it was French Communists who were a large part of that underground.  All that, of course, changed when the war was over.

Socialism has existed in some form in most countries since World War 2.  By definition, socialism is any government-owned or administered production and distribution of goods.  By that definition socialism does not exist in the United States in any form, and is constitutionally prohibited from existing.   But as soon as you expand that definition to include services the waters become muddy.  Health care is by definition a service.  But so too is airport administration.  That means most U.S. airports are run, in a socialist manner, at some level of government.  Does that mean we should turn of administration of O’Hare Airport in Chicago to private enterprise?  I would hope not, and I doubt any Republican will ever support such a measure even if it does mean they must compromise on their definition of socialism.

If Republicans are truly anti-socialist, as many claim, they are going to have to turn over to private corporations all seaports, AMTRAK, the Tennessee Valley Authority, all state-run liquor stores, all state lotteries, all draw-bridge operations, all transportation authorities, all port authorities, all air traffic control, all public hospitals, and many other operations.  If you think about it, any and all of these functions could be run by privately owned corporations.  The only question is, in the desire to eliminate any possible socialist type government operations, are you willing to give up these?

If, for example, our airports were turned over to corporate America, I for one would stop flying.  I simply do not trust private enterprise to act in my best interests.  And therein lies the central concept of why we entrust certain parts of our existence to the government.  We quite simply have more trust in the government looking after our best interests than we do corporate America.  And to this end, health care, which corporate America has so totally failed to include all Americans, needs to have government participation at a greater level than previously experienced.  Here, in Massachusetts, the Mitt Romney inspired required health care coverage has been a huge success in spite of its critics.  If anything, corporate America has benefitted from the Massachusetts experience in health care.

The bottom line is this; when corporate America has not given a service through lack of desire, has abdicated responsibility for whatever reason, or has refused to offer essential services to all Americans, we expect our government to step in and either provide the service, such as most forms of surface transportation, or make a provision whereby corporate America is compelled to make their service available at a reasonable rate to all Americans, and this is the case of health care.

Most Republicans want to bring an end to AMTRAK and turn its operations over to corporate America.  I am guessing they have not bothered to read much history, because it was corporate America that begged out of the passenger rail industry in 1971, with but four exceptions, the Southern Railroad, the Boston & Maine Railroad, the Rock Island Railroad, and the Rio Grande Railroad.  All except the B&M gave in to government take over within a few years.  It is difficult to imagine that so much has changed, even in the densely populated northeast, that any private corporation on its own can turn a profit in the passenger rail business.  But do you want to imagine a US that does not have it?

Republicans are not being the least bit truthful about any government enterprise that they call “socialist.”  It is not socialism they fear, it is their loss of leverage at the corporate level they fear.  What will happen to corporate America if the government requires fairness, openness, and equal access?  The Reagan deregulation made certain that corporate America not be responsible to anyone but its board of directors as witness the blatant abuse of power and privilege during the Wall Street meltdown.  They will never admit to this being true but rest assured, it is!  But rest assured, socialism, even as it exists in democracies such as Canada and England, is not being suggested by anyone in the Democrat Party, or anyone else for that matter.  It is simply a Republican ploy to make undesireable something that will actually serve the good of all.

Who Is the Real Mitt Romney?

Romney’s election committee was quick to distance their candidate from remarks made by Indiana US Senate candidate Richard Mourdock vis-a-vis rape and abortion.  Mourdock said such thing reflect “God’s will” and he opposes abortion even in such circumstances.  The Romney campaign quickly said that Mourdock’s views do not necessarily reflect his own.  There is just one problem with that statement, in this case they do.

You rightfully ask how I can possibly know that.   It is really quite simple.  Mitt Romney is a devout and practicing Mormon.  Mormons are a very conservative sect as religions go, and are known for that.  Mormons are known, and take pride in, their extremely conservative views, particularly those regarding abortion.  There is nothing wrong with such beliefs, and I am not trying to suggest there is, but for Romney to say he does not share Mourdock’s views is very disingenuous.

Mitt Romney is probably the most conservative candidate since Calvin Coolidge and Herbert Hoover, and even more so than either of them.  There is nothing wrong with being so conservative, of course, but I am more than a little surprised that the Obama campaign has failed to even suggest it.  Maybe they are afraid as coming across wrong in pointing out how conservative the average Mormon is.  But it is true, and what is wrong with telling the truth?

Let’s Kill a Few Democrat Sacred Cows

If you were to check my status at the city hall where I live you will find that I am a registered Democrat.  I bring that up simply to point out that this is not some conservative’s rant against liberals.

The Minimum Wage — This is like the holy grail of Democrat policies.  The minimum wage was first enacted in 1938 under the Roosevelt administration.  At that time it was intended to help raise people out of the abject poverty so many were in.  According to an Oregon State University study, that 1938 minimum wage raised the purchasing power of the employee to well above the poverty level.  Since 2006, however, that same study shows the minimum wage and the poverty level are almost identical.  This begs the utility of the minimum wage at all.

The federal government for decades now has had in place a wage scale for its employees that is adjusted for the area in which they live.  That is, a GS-5 level employee in Mobile Alabama gets a lower base pay than does his counterpart in New York City.  It is well-established that the cost of living can vary greatly from one locale to another.  That suggests that, at the very least, the minimum wage needs to be adjusted according to the locale.  Some states, Washington, Oregon, Connecticut and others, have already adjusted that rate upwards but the question is, is that really necessary?

I suggest that the minimum wage is entirely unnecessary any more for a variety of factors.  First, and foremost, the economics of 2012 have so drastically changed from those that existed in 1938 that the logic of any minimum wage is not defensible.  For example, the minimum wage here is Massachusetts is $8 an hour as opposed to the federally mandated $7.25.  Still, I can assure you, that a person working the front at any local McDonald’s is getting well above that $8 an hour which bring into focus who is getting the bare minimum?  Another clarifying point, exempt from minimum wage laws nation-wide are farm employees and certain other tip-based employees.  That is the federal government recognizing that certain exceptions need to be made.  But it also leaves you with the question, if market demands for labor keep minimum wages above mandated levels, why do we need a minimum wage?  I suggest we do not.

Federally Supported Welfare  —  I am not against welfare at all.  But I do believe in needs to be reigned in and the best way to do that is to switch that responsibility to each of the individual states.  The theory behind such programs is everyone feeds into the top as it serves the greater good.  That is, the good people of Grasse River Nebraska reap the benefits of helping Detroit poor.  It is absolute redistribution of wealth.  But it unfairly takes from wealthier better run states and given to poorer less well-run states.  The source of all welfare funds is the individual tax payer.  The closer you put the distribution of those dollars to their source, the control of those dollars improves.

Federal Funding of Public Schools  — To be clear, I think the funding of public schools needs to increase.  However, I do not want my Massachusetts-based income tax going north to support New Hampshire schools.  I think the Federal government needs to continue to mandate educational minimums and standards, but it needs to get out of the business of funding those schools.  Again, this is another place where redistribution of wealth is just not fair.

The bottom line is, by removing these, and other Democrat and Republican sacred cows, we will necessarily remove from the federal budget many items which are viewed as “pork.”  A thing like Sarah Palin’s “bridge to nowhere” would not have received a dime of federal funding and probably would not have been built by the good people of Alaska.  It is a simple recognition of personal responsibility within any given state.  When a state is fully responsible for funding its projects, its citizens are much likely to sit up and take notice of how much it costs and why they might even need it.

Whatever Happened to the American Dream?

The simple answer is ‘it is alive and well.”  But the form it takes varies greatly.  That form is, of course, defined by whoever has that dream.  But like so much of what I write, this subject needs a little history behind it.

The first people to have a dream that America could possibly answer were English merchants, followed by the group of separatists we now call the Pilgrims.  They were followed by the Puritans.  Each of these first three groups had their own separate and specialized version of the new American dream.  The English merchants saw huge economic possibilities in the New World.  The Pilgrim came purely for religious freedom, and the Puritans for a combination of both, religion and  business.  All three groups realized the American dream, some quickly, some a little more slowly.

Through 1945 at least, the idea of freedom of some sort, religious, business, personal, was the single most attractive part of the American dream.  Even when immigrants were sold a bill of goods, as the Italians and Poles who were recruited at the beginning to the 20th century to work American factories with the promise of riches, many had come to escape the persecution of the Tsar, military impressment, and starvation that the Italian immigrant had known.  They were huddled into ethnic masses, ghettos, in America’s cities, and while the original immigrants found it difficult to escape the squalor they found themselves in, most quickly came to realize that the potential for their children far outweighed whatever shortcomings they had endured.

But the end of World War 2 saw the return of over 2 million soldiers to the American economy.  The federal government, remembering the economic travails of World War One vets, decided to give veterans a way to buy their own homes through the Veterans Administration which gave rise to the VA Home Loan.  World War One vets had felt abandoned and when the depression hit, they formed what was called “Hooverville” right next to the capitol building.  They were a constant reminder the president and congress of the unfilled promises made them following WWI.

Enter a man named William Jaird Levitt.  In the late 1920s he developed an idea of selling a large tract of affordable housing to upper middle class Americans on Long Island.  The idea, while successful, was derailed by the depression.  During WWII he won a large contract to build housing for the navy.  But when the federal government came up with the idea of government guaranteed loans, Levitt cashed in by creating an entire town on Long Island, Levitttown.  Small tract houses were advertised to the veteran as a way to realize the American dream, at least as defined by Levitt.  Levitt invited ex-servicemen to visit his model house and see how they could cash in on the new American dream, a house, a car, a wife, and two kids.  That advertising ploy was hugely successful, so much so, that some years later Levitt repeated his idea in Pennsylvania.  But now, burned into the American psyche, was this new version of the American dream and it has survived to this day.

In 1922 Congress passed an immigration law, the first of its sort, the limited the number of immigrants who could enter the U.S.  The law, hugely racist, was passed using 1900 immigration figures as the basis of who could enter the U.S. and in what numbers.  In 1900 the largest portion of immigrants came from northern Europe.

On April 30, 1975, the American embassy in Saigon Vietnam fell to the North Vietnamese communists.  Americans saw on their television hundreds of Vietnamese, friends of America they were called, being airlifted off the top of the American embassy.  Shortly after that hundreds of Vietnamese who feared for their lives took to boats to escape their native land.  They became known as the “boat people.”  Most of those refugees were welcomed to America in no small part because of American guilt over what had occurred in their homeland.  The point here is, first, America made an exception to the immigration law, and second, but more importantly, these Vietnamese had an American dream in their minds that did not include a house, a car, and two kids.  Their dream was a throwback to the original settlers of English North America and the immigrants who came through the early part of the 20th Century.

Today’s politicians are selling the American public the idea that the American dream includes a right to a job, a right to very low taxes, and a right to feel entitled.  Those three things are a gross exaggeration of reality.  At the beginning of the 20th century poor immigrants desired one thing and one thing only, a chance.  They did not feel entitled to anything.  I think Americans today believe the American dream should be given to them and not worked for.

The American dream is alive and well, it is just not the one being sold by the politicians.  It is not up to the government to find you a job.  It is up to you.  It is not up to the government to lower the unemployment rate, it is up to business.  You are not entitled to a car, a house, or anything else save a chance equal to that of anyone else.  The American dream is the chance to lead a happy and successful life according to your own definition of what that looks like, and nothing more.

The Truth About Political Debates

There was a time, long ago, when candidates were forced to go to open air venues to have their debates in public places so people could take their measure.  In the early 20th century, a man named James Michael Curley burst upon Massachusetts politics.  At the time, 1910, he was simply trying to become a U.S. Representative for the 10th district, a seat no Democrat in anyone’s memory had ever held, and no one expected that to change.  But the 10th district had a heavy Irish population and other new immigrant groups.  Curley was a charismatic Irishman who had grown up poor but had worked in the wards under the bosses of the day.  He was an excellent speaker, never at a loss for words.  Curley was anything but a household name but at those debates he skillfully used his opponents own words against him.  He could turn a phrase and get his audience to identify with him.

The Brahmins of Boston, the well-entrenced Republican establishment, were outraged.  In  a later election when Curley ran for mayor of Boston, he said that on his first day of office he would turn the Boston Common into a parking lot.  Of course this was only a slap at the landed gentry who still failed to recognize the trials of the working class.

But it was not until 1960 and the Kennedy – Nixon debate, sometimes referred to as “the checkers debate,” that politics embraced television, and it has been downhill ever since.  Political parties write the speeches, figure out how to portray political positions, and dictate how any given answer needs to be given.  These are not debates at all but well-scripted advertisement.

I have a pretty good sense of who Barack Obama is and who Mitt Romney is, having lived in Massachusetts during his governorship.  I also have a pretty good idea of who Scott Brown is but, sadly, I do not have much of an idea who Elizabeth Warren is.  Something that is very important to me, family, seems to have been avoided by Warren making me very suspicious of her, and pushing me, a Democrat, into the position of likely voting for her Republican opponent.

It was during their last so-called debate that I came to this decision.  I found both of them to be rather disingenuous.  Each seemed to be responding to questions with very well-scripted answers that seldom properly responded to the question on the floor.  Frequently each simply side-stepped the question and said whatever they felt was important rather than simply answer the question at hand.  But this is our present state of politics at the national level.

It is my firm belief that when these politicians speak we are not hearing what they really think but rather what their handlers, those nameless people behind the scenes, want us to hear and nothing more.  The question on every American’s mind when they hear a politician in one of these so-called debates say something that appears to exactly reflect their views, ask yourself if they are simply playing up to you and in reality have another agenda entirely.  I suspect, regardless of party affiliation, the latter is closer to the truth than the former.  We need to go back to the days when two guys would stand on a stage, say their peace without anyone prompting them as to what is proper and what is not.