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Domestic issues Economics Election 2008 McCain Obama Politics Videos

McCain Ad Echoes Smear Emails

[digg-reddit-me]Is it just me, or is it a bit eerie how closely McCain’s ad (just released today) mirrors the Obama smear email that started going around a few days ago – based on it’s earliest posting on the internet?

Breakdown of the Ad

It starts with the “Celebrity” attack that worked so well a few weeks ago.

This time, the image of the Obama crowds with blue banners morphs into old white men with a red Capitol Building in the background. The image is reminiscent of Communist propaganda posters of the 1940s or 1950s. Over this image, and the text appears – “Old ideas” while the narrator intones: “Old ideas masquerading as change.” This is the same charge a co-worker of mine made more crudely, and the right-wing talk radio bloviators make repeatedly day after day – Obama is just the same old liberal ideas packaged with a brown face and nice words.

Next in the ad, the actual claims come:

“Obama and his liberal allies promise higher taxes on your income.”

Not true if you’re making less than $250,000 a year. In fact, if you make less than $111,000 Obama promises higher tax cuts than McCain does – because he believe the middle class has been hurting in the Bush economy. Obama is actually promising higher tax cuts for 90% of Americans than McCain is – so McCain’s ad is deliberately misleading those 90%. McCain has made this claim in several of his ads before – and continues to despite it’s inaccuracy.

“Your life savings.”

Even less true than the claim above. Obama does not plan on changing the law to further tax life savings – but he does propose this measure to encourage individuals and families to save:

Obama will ensure savings incentives are fair to all workers by creating a generous savings match for low and middle-income Americans. His plan will match 50 percent of the first $1,000 of savings for families that earn less than $75,000.

“Your electric bill.”

Partially true for both McCain and Obama. This ad again directly echoes the smear email by saving that Obama plans on taxing your “electric bill”.  The only “tax” that this could be referring to is the “cap-and-trade system” proposed by both McCain and Obama which would impose a cost on businesses’ carbon emissions. Although neither McCain nor Obama call these costs “taxes” they can reasonably be called that. Further, Obama, though not McCain, plans to offset any potential increase in costs for consumers with a refund from a windfall profits tax.

“They oppose offshore drilling.”

False. Obama does not oppose offshore drilling – but he does not believe the small amount of oil we have in those few protected areas off of our coasts will significantly effect either gas prices or our dependence on foreign oil. As he has been saying for over a month, he is open to offshore drilling – but only as part of a package that tackles the real issues. Since the 1970s, McCain and other Congresspeople have been saying that we need to end our reliance on foreign oil – and they have done nothing to accomplish that. Obama believes we need to create incentives and push for federal funding in concert with market forces to establish a green energy industry in America. This is the only solution that will reduce our dependence on foreign oil. “Drill, baby, drill” is a chant for morons.

“It’s not change. It’s more of the same. Obama and his liberal allies: Not Ready to Lead.”

The final claim is obviously meant to echo the Democratic attacks on McCain – pointing out that he supported Bush more than 90% of the time, professed his fealty to Bush on all “transcendent issues”, and advocates doubling down on Bush’s disasterous economic and foreign policies. McCain is charging that Obama does not offer anything new – which is a hard charge to rebut because while Obama claims that McCain and Bush have similar economic and foreign policies – a position that can be checked – McCain is not specifically linking Obama to anyone. What is true is that Obama is supporting an emerging Democratic consensus on a number of issues – a consensus that has only gradually emerged as the Bush administration exacerbated long-term trends that are destabilizing the country. In addition, Obama’s campaign does have some new ideas – with Samantha Power, Lawrence Lessig, and Cass Sunstein acting as key advisors to the campaign, and influencing his foreign and economic policies.

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Domestic issues Economics Election 2008 McCain Obama Politics

Lies About Obama’s Tax Plans

[digg-reddit-me]I just received another one of those mass emails being used to spread lies about Obama. I’ve interspersed the text of it with data contradicting the claims:

INTERESTING DATA JUST RECEIVED ON TAXES

Spread the word…..

This is something you should be
aware of so you don’t get blind-sided.
This is really going to catch a lot
of families off guard. It should
make you worry.

Proposed changes in taxes after 2008 General election:

CAPITAL GAINS TAX

MCCAIN
0% on home sales up to $500,000
per home (couples) McCain does not
propose any change in existing
home sales income tax.

OBAMA
28% on profit from ALL home sales

How does this affect you?
If you sell your home and make a profit, you  will pay 28% of your gain on taxes.
If you are heading toward retirement
and would like to down-size your
home or move into a retirement
community, 28% of the money you
make from your home will go to taxes. This  proposal will adversely affect the elderly who are counting on the income  from their homes as part of their retirement income.

This claim about Obama taxing profits on home sales comes from nowhere. Any gains on the sale of one’s principal residence is not taxed under section 121 of the Internal Revenue Code. Neither McCain nor Obama has proposed to amend this section.

DIVIDEND TAX

MCCAIN 15% (no change)

OBAMA 39.6%

How will this affect you?
If you have any money invested in stock
market, IRA, mutual funds,
college funds, life insurance, retirement  accounts, or anything that pays or reinvests dividends, you will now  be paying nearly 40% of the money earned on taxes if Obama become president.
The experts predict that ‘higher
tax rates on dividends and capital gains would crash the stock market yet  do absolutely nothing to cut the deficit.

As for Capital Gains taxes in general, Obama is proposing to raise the capital gains tax rate from 15 percent to 20 percent for those American families making more than $250,000.00 per year or singles making over $200,000.00 per year. Those families or singles making less than these respective amounts will not have a tax increase. Further, IRAs and college funds are exempt from taxation entirely – and neither candidate is proposing to change this.

INCOME TAX

MCCAIN (no changes)

Single making 30K – tax $4,500
Single making 50K – tax $12,500
Single making 75K – tax $18,750
Married making 60K- tax $9,000
Married making 75K – tax $18,750
Married making 125K – tax $31,250

OBAMA
(reversion to pre-Bush tax cuts)
Single making 30K – tax $8,400
Single making 50K – tax $14,000
Single making 75K – tax $23,250
Married making 60K – tax $16,800
Married making 75K – tax $21,000
Married making 125K – tax $38,750

Under Obama your taxes will
more than double!
How does this affect you? No explanation needed. This is pretty  straight forward.

This claim is worse than all those above – because Obama is actually proposing to lower taxes for all of these groups listed. Here’s a site which provides an Obama tax cut calculator. I can’t vouch for its accuracy, but it seems to be based on the Tax Policy Institute’s analysis of both candidates’ plans. The email also inaccurates states that Obama plans to revert to “pre-Bush tax cuts” which is only true for those making over $250,000.00. As Obama said in his speech on Thursday night:

I will cut taxes for 95 percent of all working families. Because in an economy like this, the last thing we should do is raise taxes on the middle class.

Sarah Palin in her speech this past Wednesday made the same claim the Republicans keep making:

Taxes are too high, and he wants to raise them. His tax increases are the fine print in his economic plan. And let me be specific: The Democratic nominee for president supports plans to raise income taxes, and raise payroll taxes, and raise investment income taxes, and raise the death tax, and raise business taxes, and increase the tax burden on the American people by hundreds of billions of dollars.

As Politifact.com writes – Palin’s claims are deliberately misleading. This email is worse than misleading – it is entirely fase.

This little list conveniently does not include those making over $125,000.00. It is this group of people – especially those making over $250,000.00, and even more, those making over a million dollars a year – to whom the profits of the past eight years has gone. The economy has been growing for eight years while the income of those in the middle class has decreased by approximately $2,000.00 when accounting for inflation since Bush took office.

INHERITANCE TAX

MCCAIN 0% (No change, Bush repealed this tax)

OBAMA Restore the inheritance tax

How does this affect you? Many families have lost businesses,  farms and ranches, and homes that have been in their families  for generations because they could not afford the inheritance tax.
Those willing their assets to loved
ones will not only lose them to
these taxes.

As for this section – again, falsehoods galore. According to FactCheck.org:

The claim that Obama proposes to “restore the inheritance tax” is also false, as are the claims that McCain would impose zero tax and that Bush “repealed” it. McCain and Obama both would retain a reduced version of the estate tax, as it is correctly called, though McCain would reduce it by more.

The tax now falls only on estates valued at more than $2 million (effectively $4 million for couples able to set up the required legal and financial arrangements). It reaches a maximum rate of 45 percent on amounts more than that. It was not repealed, but it is set to expire temporarily in 2010, then return in 2011, when it would apply to estates valued at more than $1 million ($2 million for couples), with the maximum rate rising to 55 percent.

Obama has proposed to apply the tax only to estates valued at more than $3.5 million ($7 million for couples), holding the maximum rate at 45 percent. McCain would apply it to estates worth more than $5 million ($10 million for couples), with a maximum rate of 15 percent.

Again – this email is counting on people accepting its’ allegations without checking them and hoping that stereotypes about liberals are strong enough that people will accept these charges.

NEW TAXES BEING PROPOSED BY OBAMA

* New government taxes proposed on
homes that are more than
2400 square feet

* New gasoline taxes (as if
gas weren’t high enough already)

* New taxes on natural resources
consumption (heating
gas, water, electricity)

* New taxes on retirement accounts
and last but not least….

This section is even more fanciful than the rest. Obama has never proposed taxes on water. He isn’t proposing to increase gasoline taxes. He isn’t proposing to increase taxes on retirement accounts. The taxes on homes with more than 2400 square feet – neither the number nor general idea can be found anywhere aside from in references to this email.

The one thing that is partially true is that Obama – and McCain – are proposing to create a “cap-and-trade system” which would impose a cost on businesses’ carbon emissions. Although neither McCain nor Obama call these costs “taxes” they can reasonably be called that. Further, Obama, though not McCain, plans to offset any potential increase in costs for consumers with a refund from a windfall profits tax.

* New taxes to pay for socialized medicine so we can receive the same  level of medical care as other third-world countries!!!

This final claim is way over-the-top. Obama’s plan calls for every American who wants to preserve their health insurance plan to be able to keep it. His plan even includes incentives that reward employers that do provide health insurance and penalizes employers that do not (with exceptions for small businesses.) In addition to this, Obama’s plan will open up the government health care plan used by members of Congress to allow consumers – in a free market – to opt into it. Obama’s plan is designed to create incentives within our current system to gradually close the huge holes in insurance coverage and over time bring down costs. It’s a conservative plan, in the best sense of that word.

John McCain’s health care plan is radical. McCain says he wants to:

Reform The Tax Code To Offer More Choices Beyond Employer-Based Health Insurance Coverage

In other words, McCain wants employers to stop providing health insurance coverage. He proposes to include the cost of health care in each employee’s taxable income – and to offset this by offering a $2,500.00 tax rebate for individuals and $5,000.00 for families. This isn’t enough to purchase health insurance coverage in many states, so in addition, McCain proposes to effectively deregulate the insurance market and allow insurance to be sold across state lines – eliminating the consumer protections states provide, including protections for those with pre-existing conditions.

The theory behind the McCain plan is that we already have too much health insurance coverage and are going to the doctor too often because we don’t have to pay every time we do. So he proposes that every individual – or family – purchase individual or family health insurance – a radical change, and one that places much greater power in the hands of the insurance industry. As a matter of fact, it would be accurate to say it is exactly what the health insurance industry is asking for.

Conclusion

So, there we have it. An email full of lies deliberately designed to mislead those Obama’s plans are designed to help. Obama’s plans – which are the fruit of a kind of Democratic consensus that has emerged in the past ten years on how to deal with the destabilization that has come from globalization. Obama is asking that those individuals who have gained the most from our society and economy should give a bit more in this time of need. All McCain and Palin and the Republicans offer is more tax cuts for the richest indivudals and the biggest corporations (tax cuts that go further than Bush’s tax cuts in favoring the wealthy) – for which their only defense is to make the false claim that Obama is planning on raising everyone’s taxes.

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Domestic issues Economics Election 2008 Foreign Policy Iran Iraq McCain National Security Obama Politics Russia The Opinionsphere The War on Terrorism The Web and Technology Videos

11 Reasons to Donate to Barack Obama Tonight

[digg-reddit-me]Sarah Palin’s speech last night galvanized Obama’s supporters and created a surge in fundraising for him. Tonight, it’s John McCain’s turn to speak. Though it seems unlikely he will inspire feelings as strong as Palin either for or against him, he is the candidate we are running against. And now that McCain is the official nominee and is accepting federal financing, he will be forced to curtail his spending. ((To $84.1 million dollars – so it’s no chump change.))

We all know this is an important election. This is the time to donate for the maximum effect – to allow Obama to out-manuever McCain over the coming months.

Here are some reasons to donate right now, while McCain is giving his speech, and in the immediate aftermath:

  1. To throw the bums (aka Republicans) out. Enough is enough. We need change before it’s too late.
  2. To prevent (another) unnecessary war. A new cold war with Russia? Killing the United Nations? Sabre-rattling with Iran – which would be further destabilized if the situation with Russia deteriorates. John McCain thinks that Iraq and Pakistan border one another and can’t tell the major Muslim factions apart. All he knows is that there are enemies, and we must defeat them. Sun Tzu said that you must know your enemy to defeat him. John McCain prefers to wing it, and he has quite a temper.
  3. To save the internet as we know it. Barack Obama supports net neutrality. John McCain opposes it.
  4. To get out of Iraq. The Iraqi prime minister said he likes Obama’s plan. The Iraqi people prefer Obama’s plan. George W. Bush is moving towards Obama’s timeline. The only person still too stubborn to acknowledge the facts on the ground is John McCain.
  5. To reinvest in America – with tax cuts to the middle class, with investments in infrastructure, with incentives to develop green energy alternatives, with health care reforms.
  6. To stop Palin from burning our books, teaching creationism, and opening up our local parks to hunters in helicopters.
  7. To restore the Constitution. To restore the balance of power in Washington, to stop the cruel and inhuman torture of our prisoners, to acknowledge the vice presidency is part of the executive branch, to have a president who does not consider himself above the law, and to punish those who have committed crimes against the Constitution in the Bush administration. ((For those whose thoughts immediately went to FISA when seeing this, I gave my opinion already.  And regardless – you have to admit Obama would be better on these issues than McCain.))
  8. To get my tax cut.
  9. To finally have a president who will be serious about national security.
  10. To demonstrate against the crass politics of celebrity and the crowds chanting, “Drill, baby, drill!” so that we can take on the serious and complex challenges facing America – including terrorism, global warming, the destabilizing effects of globalization, the massive shifts in power in the world, and the economic stratification of America.
  11. Because after over 25 years of Republican dominance in Washington, four more years is not an option.

Bonus:Because John McCain’s campaign will be under spending restrictions from here-on out. And Obama can pursue a 50-state strategy.

Aside from all this, here’s my one sentence explaining why I support Obama.

If you think this election will be important, now is the time. Our moment is now. Donate tonight.

Believe that there is a better place around the bend, as yet unseen. And help make that a reality.

Thank you.

Categories
Economics Election 2008 Foreign Policy History McCain Obama Political Philosophy Politics The Opinionsphere

Vision versus Compromise

Sam Tanenhaus, an historian and editor of the New York Times Book Review, had a piece in Saturday’s Week in Review discussing vision and compromise in politics. The byline was: “Vision has its limits. Compromise has its opportunities.” While I agreed with the overall thrust of the piece – that a mediocre man’s compromise is often more effective a great man’s vision – Tannenhaus is setting up a false dichotomy:

Visionary leaders are inclined to create or imagine their own goals and then try to propel others toward them. Sometimes these leaders achieve greatness. Lincoln is the salient example. But he was also a canny and calculating politician, attuned to the nation’s mood, whereas another visionary president, Woodrow Wilson, was stymied precisely because of his imperious disregard of the public will.

I don’t see how an historian who had studied Lincoln can believe that vision and compromise can be mutually exclusive. The genius of Lincoln was that he first saw the world for what it was, saw what was possible and what was not, identified the core challenges ahead, and took what steps were necessary to achieve his objectives. Lincoln did have a vision – but it was a vision anchored in reality, and one that changed as realities changed. For Lincoln, his vision was not an independent idealistic end, but a goal that was based on the best he could do at that moment. He was willing to allow slavery to preserve the Union; he was willing to fight a brutal war to prevent secession; he was willing to let Britain commit acts of agression without retribution in order to keep the nation’s focus; he was willing to contravene the Constitution in order to preserve it. Lincoln cast a cold eye on war and peace and did what he believed was needed. Lincoln was neither an idealist nor a flip-flopper. He did not act as if there was something irreconcilable about having a vision of a better nation and actually accomplishing something. Lincoln believed that through powerful words and determined action, and most important, an understanding of the world and the possible – an individual must strive to do whatever they could, and to make the world a better place. Wilson failed because he was a stubborn idiot (whose stubbornness was exacerbated by medical issues) – not because he was a visionary.

Tanenhaus tries in his piece to treat John McCain and Barack Obama evenhandedly. But clearly, he favors Obama. He treats Obama’s flip-flip on public financing and change in tactics regarding telecom immunity (which Tannenhaus grossly mischaracterizes or misunderstands as a change in position on FISA) with McCain’s radical changes of position on tax cuts and on whether or not to run an honorable campaign. (He doesn’t mention McCain’s other flip-flops on offshore drilling and torture.) In attempting to treat them equally, he does a disservive to both men. But most importantly, by setting up an inherent conflict between being a visionary and a statesmen, he ignores the clear lessons of history. (And by equating partisan politicians with visionaries, his argument verges on the ridiculous.) Statesmen have propped up some of the worst regimes on the planet and protected the worst practices – all in the name of reasonableness and compromise. Visionaries have wreaked the worst violence on the history of the planet, attempting to remake the world to match their visions.

If all we can do is choose to compromise or choose to see a better world, then there are no good choices. But history shows us a better path – one which Lincoln demonstrates above all. Radicals are visionaries who seek to remake the world to match their visions; apologists are statesmen who compromise to protect the status quo at all costs. Lincoln was a pragmatic politician who had a few ideas about how to approach the challenges our country faced, who was willing to compromise to get something done, who saw the world as it was and not as he wished or feared it to be,  but who most of all attempted to push – to nudge – the country in a better direction.

As Sam Tanenhaus knows, and as I know – John McCain is not that type of politician. He has a set view of the world – and he believes that America can demand everything it wants and get it. He does not realize that we live in a nonpolar world in which states have great power, but not all power. He does not realize that if we kick Russia out of the G-8 as he was threatening to do before their invasion of Georgia – then we will pay a price in less cooperation on other fronts. He has accepted the failed orthodoxy of the far right-wing on economic policy – an orthodoxy that has led us to Enron, to a shrinking and less stable middle class, to a destabilizing dependence on oil, to an ossification of American society into classes, ((Except that those in the middle have no safety net to prevent them from falling into poverty while those as the top have various safety nets to prevent them from becoming middle class.)) and to the perfect storm of crises we are in the midst of now.

As Sam Tanenhaus knows, and as I know – Barack Obama could be that politician. He might fail – but there is no doubting that he is a pragmatist who sees that we are the single most powerful force in in a nonpolar world; but who also sees that unless we invest in our infrastructure, in new industries, and take steps to prevent us from becoming a stratified society, we will not be able to maintain our power. He has a vision of a better America, still unseen, around the corner – and his policies are all attempts to nudge our society in the right direction.

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Domestic issues Economics Election 2008 McCain Politics The Opinionsphere

The Intersection of Rich, Out-of-Touch, and Old

Jonathan Chait to Matthew Yglesias in conversation over at Bloggingheads.tv, discussing McCain’s lack of awareness of the number of houses he owns:

Chait: It’s right at the intersection of rich, out-of-touch, and old. It’s like the perfect –

Yglesias: Right…

Chait: …it’s in the perfectly overlapped center of all these things.

Yglesias: I actually feel kind of bad…

Categories
Economics Election 2008 Obama Politics

Obamanomics

[digg-reddit-me]In the past ten years, a Democratic consensus has emerged from opposing poles represented by Robert Rubin, Secretary of the Treasury under Clinton, and Robert Reich, Secretary of Labor under Clinton.

The consensus stems from a shared conclusion:

In the past generation, the American economy has been benefiting the vast majority of Americans less and less; and the trends that are causing this cannot be stopped.

There are many factors that have caused, worsened and continued to escalate this core problem:

  • the demise of America’s manufacturing base;
  • the increasing gap between the pay of CEOs and top corporate officials and the average worker;
  • the way the tax code has begun to tax labor at a far higher rate than it taxes capital;
  • the shrinking of organized labor;
  • the increasing instability due to globalization.

All of these are the symptoms and all of these are the causes.

Our economic system is breaking – the middle class is being squeezed; we are transferring a tremendous amount of our wealth to autocracies and our rivals around the world because of our dependence on oil; budget deficits are burdening our government which now practices a nefarious for of socialism, only for the rich; globalization is creating insecurity; our society is becoming more stratified ((Subscription now required.)), with many traditionally class-conscious European countries becoming more socially mobile; our infrastructure is eroding.

Barack Obama’s answer to this – accepting the Democratic party consensus – is a mix of short-term and long-term measures.

  • To alleviate the squeeze on the middle class as certain industries leave America looking for cheaper labor, he proposes to create jobs with infrastructure improvements and to push the development of a green energy industry.
  • To aid small businesses and to reduce the instability created by the greater turnover in jobs in a globalized marketplace, he proposes a universal health care plan that combines a government plan open to all citizens, various incentives for businesses to offer coverage, and various incentives for individuals to get coverage on their own.
  • With regards to taxes, he proposes tax cuts (graph) to those who need it and tax increases to those who have benefited most from our society – those making over $250,000.00.
  • To prepare the next generation for the globalized marketplace, Obama proposes various improvements to education.
  • Barack Obama is also the only candidate who has pledged to protect the foundation of the internet. (John McCain has recently come off the fence to support a policy that directly undermines the architecture of the internet since it began.)

For a more in-depth and reflective look at Obamanomics, check out David Leonhardt’s cover story this weekend in the New York Times Magazine.

Addition: What Obama and the Democrats have been struggling with is a way to frame this in a visceral way that can be easily understood. Here’s my proposition:

McCain and the Republicans want to give big corporations whatever they want – even if it hurts American in the long term. (Offshore drilling; telecom immunity; free trade without sensible provisions regarding labor and environmental regulation; tax cuts on corporations and the wealthy while the government needs more income; opposing the protection of the basis of the web, net neutrality, so that internet providers can make a bigger profit.)

Obama and the Democrats want corporations to do well, but at the same time, they want to protect American society from the destabilizing forces of globalization and to protect what has made America the most prosperous nation on earth – including a stable middle class and social mobility – both of which we are in danger of losing due to reckless Republican policies.

That’s the narrative – it’s not class warfare. It’s about protecting what has made America great against the forces of globalization, overly greedy corporations, and rapid change.

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Economics

Quote of the Day

The [companies] that are too big to fail may be too big to manage.

Warren Buffett in an interview with Becky Quick on CNBC, commenting on Freddie Mac, Fannie Mae, Bear Stearns, and other large financial institutions.

Categories
Economics Election 2008 McCain Obama Politics The Opinionsphere

Change Before It’s Too Late

Frank Rich in yesterday’s Times coins a new slogan for Obama’s campaign:

…[T]he unsettling subtext of the Olympics has been as resonant for Americans as the Phelps triumph. You couldn’t watch NBC’s weeks of coverage without feeling bombarded by an ascendant China whose superior cache of gold medals and dazzling management of the Games became a proxy for its spectacular commercial and cultural prowess in the new century. Even before the Olympics began, a July CNN poll found that 70 percent of Americans fear China’s economic might — about as many as find America on the wrong track. Americans watching the Olympics could not escape the reality that China in particular and Asia in general will continue to outpace our country in growth while we remain mired in stagnancy and debt (much of it held by China).

How we dig out of this quagmire is the American story that Obama must tell…Americans must band together for change before the new century leaves us completely behind. The Obama campaign actually has plans, however imperfect or provisional, to set us on that path; the McCain campaign offers only disposable Band-Aids typified by the “drill now” mantra that even McCain says will only have a “psychological” effect on gas prices…

Is a man who is just discovering the Internet qualified to lead a restoration of America’s economic and educational infrastructures? Is the leader of a virtually all-white political party America’s best salesman and moral avatar in the age of globalization? Does a bellicose Vietnam veteran who rushed to hitch his star to the self-immolating overreaches of Ahmad Chalabi, Pervez Musharraf and Mikheil Saakashvili have the judgment to keep America safe?

R.I.P., “Change We Can Believe In.” The fierce urgency of the 21st century demands Change Before It’s Too Late.

Categories
Criticism Economics Libertarianism Political Philosophy

Holding a Grudge Against the Bank of America (Part 1)


[Photo by Steven Rhodes licensed under Creative Commons.]

Corporations are considered individuals by the law. Yet they have no conscience to guilt; they have no eternal soul to damn ((if you go for that sort of thing)); they have no empathy, no compassion – no emotion of any sort; they cannot be sent to prison; they can live forever; their single purpose is to make money – and they are legally obligated to make as much money as possible. Yet despite the fundamental differences between corporations and human beings, corporations have been given all of the rights of human beings. They have the right to free speech, the right to assemble, the right to be free from unreasonable searches and seizures – and all those other rights we mere humans take for granted.

Is it any wonder then that all large corporations – once they are no longer the responsibility of a single individual – begin to act as if they have no conscience or compassion – exploiting legal loopholes and damaging society at large? Insurance companies derive enormous profit from denying legitimate claims and every claim that they possibly can. Oil companies lobby and erect barriers and do anything they can to eliminate the possibility of alternative energy sources being developed. Manufacturers externalize the costs of their pollution – spewing toxic chemicals into streams and lakes and the air and the ground – and after paying some negligible penalty, the government (with the people’s money) takes responsibility for cleaning up the mess. ((Much of the analysis and examples given in these first two paragraphs is inspired by The Corporation by Joel Bakan – as well as the documentary of the same name. I do not entirely accept the conclusions of the film or book, or the methods they use to come to their conclusions. The book and the film are both extremely useful and worthwhile but are ultimately limited because they are polemics that do not seek to give a fair analysis but to persuade. Sometimes, the tools they use to persuade are a bit too blunt – as when in the documentary, the filmmakers say that the corporation as a type of instituition was responsible – in part presumably – for the Holocaust and other atrocities – when it is easier to blame “the government as an institution.” As a matter of fact – most of the criticisms of “the Corporation” can be equally applied to the State as an institution.)) Big lenders and bankers take unwise risks that allow them enormous profits in the short term – and the American people then pay to bail the companies out of the deficits they find themselves in. ((This is obviously references specifically the Fannie Mae, Freddie Mac, and Bear Stearns deals which the Financial Times of London called the most deceitful kind of socialism.))

The companies survive – they thrive. It is the people who work for them and who are their customers – the people that are fired, and the people that get sick, and the people denied coverage. Then to top it all off – it is these same people who have to pay when companies that are too big to fail end up failing due to their own recklessness.

I don’t believe that corporations are inherently good or inherently evil – they are tools that are used for many purposes. But when we discuss economics and public policy it is essential that we acknowledge the limits of corporations. This inevitably leads to certain positions:

  • If corporations, by their nature, attempt to externalize as many costs as possible – forcing problems onto the public such as pollution – then government regulation is necessary to force corporations to deal with these externalized problems.
  • If corporations have no conscience or compassion, we cannot necessarily trust them to take care of us in times of need. Although random acts of kindness and charity occur more often than is sometimes acknowledged, they do not change the scope of the problem.
  • If corporations do not take affirmative steps to protect public goods and institutions – such as the national infrastructure, education, political institutions, and the nature of our society – someone must. Today, corporations are radically altering our society on many fronts – and as such they are a threat to its cohesiveness – by encouraging mass immigration and sexual immorality from a conservative perspective, and by creating vast inequities between the rich and everyone else from a liberal perspective.

Liberals, progressives, and Democrats have come to a broad agreement in recent years on some general steps that need to be taken to protect our economy and our country in an increasingly globalized world. (Some deeper critiques and potential solutions from a liberal perspective can be found in William Greider’s The Soul of Capitalism.)

This includes raising the tax rates on those making over $250,000.00 a year and on corporations to the same rates as at the end of Bill Clinton’s term; focusing on developing a clean energy industry to replace traditional manufacturing; increasing funding for infrastructure maintenance and development; protecting the foundations of the internet through net neutrality; and taking various steps to reform our educational and health care systems. (A thoughtful piece in this weekend’s New York Times by David Leonhardt delves into Obama’s economic worldview.)

Health Care

The best insight into the Democratic consensus on these issues comes from the issue of health care.

Barack Obama has said that if he were to design a health care system from scratch, the system would be single-payer. At this time, however, Obama believes we need to work within the system that we have. As with most issues, what Obama proposes here is to tinker with the current system to try to reduce the problems immediately and gradually move towards a better solution. On health care, this means working with the current employer-based system – and creating incentives to reduce the number of people not covered. These incentives incude a mandate for children, tax incentives for those who seek their own health insurance, penalties for large companies that do not provide health insurance (in the form of payroll taxes), the expansion of existing programs, and support for small businesses to assist them in providing health care for their employees.

In addition to the above and more short-term solutions, Obama proposes to open up the health care plan used by members of Congress to the public – and to create a “National Health Insurance Exchange” focused on assisting people who wanted individual or family insurance plans while providing rules and guidelines for participating companies. In the long-term these two changes have the potential to remake the field of health care. If the government program is able to provide better services for less cost than it’s competitors, then if the market works as it should, more and more people will move over to the government plan – unless other health insurance companies are able to take steps to compete.

This combination of freedom of choice for citizens/customers, government regulation for companies wishing to get into a potentially lucrative market, government competition against private companies, and letting the market decide who wins in the long-term – this combination may be too clever to work. But it has far more potential than the giveaways to health insurance companies that the Republicans are proposing.

What does all of this have to do with holding a grude against the Bank of America?, you might ask. That’s coming up in Part 2.

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Economics Election 2008 McCain Obama Politics Videos

Barack Obama’s New Ad is Unfair

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The Obama campaign’s new ad is an unfair and personal attack on McCain and his character. It’s a cheap shot. And it’s a perfect response to John McCain’s unfair and personal (and also dishonest) attacks on Obama in recent weeks.

This is how Democrats hit back.

If this is the kind of campaign McCain wants to run, there’s a whole lot more where this came from.