Author: Bonddad

I want to disclose up front that I am not a political strategist by trade – either professionally or non-professionally.  I am a lawyer who writes about economics.  The reason for this admission is it has a direct bearing on my reasons for arguing for realignment rather than impeachment.
There is a debate occurring in the Democratic blogsphere about the Democrat’s course for the next 2-3 years.  The debate is whether the Democrats should impeach the president or go for realignment of the current political landscape.  Below I argue for seeking realignment rather than impeachment.

Bush is now the Republican Carter.  Most Republicans that I know dislike Carter (at best).  They pull out the 1976-1980 President whenever they want to make Democrats look weak or appeal to the Republican base.  Personally, I think Carter was one of the most basically decent people to ever be President.  However, I also think the office swallowed him.

One year into his first term, Bush has incredibly low poll numbers, indicating the only people who still firmly support him are hard-core, I “would rather die than vote Democrat” Republicans.  In addition, the percentage of poll respondents who think the country is going in the wrong direction is very high.  

With three years left, Bush is already in one of the worst positions relative to his public standing of any president.  He also shows no desire to effectively change the policies that are hurting his standing with the public.  As a result, the chances of Bush leaving an increasingly bad taste in the electorate’s mouth are very high.  

While Bush is steadfast in staying the course, underlying problems of the country go unfixed.  44 million Americans have no health insurance.  Those who do have insurance face premium escalation far beyond the annual inflation increase.  College is growing more and more expensive, placing graduates into indentured servitude from college loans rather than entering the workforce able to begin accumulating equity.  The trade deficit is already at economically disastrous levels, and is only getting worse.  The Federal deficit is out of control.  The great exodus of high-paying manufacturing and high-tech jobs continues, further eroding the middle class’s standard of living.  

By combining the electorate’s dissatisfaction with the country’s direction with solid policy initiatives, the Democrats can achieve solid gains and perhaps majorities in one or both Congressional bodies in the 2006 elections.  By advancing our policy objectives on Bush, he will be placed in the position of either vetoing popular ideas of health care reform, education initiatives etc… or bowing to the obvious will of the people.  Should he veto, he will further sink Republican prospects.

Should the Democrats seek impeachment, they will hinder Congress’ ability to solve problems that need fixing.  I would love it if Congress could do more than one thing at a time.  However, they can barely do one thing at a time.  And impeachment, being a special situation, would simply prevent a Democratic majority from helping the country deal with its problems.

While I would personally love Bush and Cheney to face criminal sanctions, I would be far happier if I saw the US standard of living increase, college graduates with the ability to increase their new worth without the burden of mammoth college loans, and US citizens with the ability to care for their family’s medical needs.  By solving these problems, The Democrats will increase their goodwill with the vast majority of people, further strengthening the Democratic majority.  

I see impeachment as a short-term solution, whereas realignment would be long-term solution.  In my opinion, long-term is better, for everybody.

(U) Conclusion 85. The Intelligence Community’s elimination of the caveats from the unclassified White Paper misrepresented their judgments to the public which did not have access to the classified National Intelligence Estimate containing the more carefully worded assessments.

Conclusion 86. The names of agencies which had dissenting opinions in the classified National Intelligence Estimate were not included in the unclassified white paper and in the case of the unmanned aerial vehicles (UAVs), the dissenting opinion was excluded completely. In both cases in which there were dissenting opinions, the dissenting agencies were widely regarded as the primary subject matter experts on the issues in question. Excluding the names of the agencies provided readers with an incomplete picture of the nature and extent of the debate within the Intelligence Community regarding these issues.

Conclusion 87. The key judgment in the unclassified October 2002 White Paper on Iraq’s potential to deliver biological agents conveyed a level of threat to the United States homeland inconsistent with the classified National Intelligence Estimate.

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This idea has been floating around my mind for a long time: what is the realdifference between Republicans and Democrats?  I am not referring to the differences at the national level as in between a Republican Senator and a Democratic Senator.  Regrettably, there are more than a few times when the actual difference is hard to distinguish.  I am referring to the difference at the constituent level – what makes a Democratic voter different from a Republican voter?  The idea of an empathy gap between the two parties has been gelling in my mind for a long time.  Below is my explanation of why I think this is the real, fundamental difference between Republican and Democratic voters.  
Webster’s online dictionary defines empathy as:

the action of understanding, being aware of, being sensitive to, and vicariously experiencing the feelings, thoughts, and experience of another of either the past or present without having the feelings, thoughts, and experience fully communicated in an objectively explicit manner; also : the capacity for empathy

Several weeks ago, the Fox All-Stars had a discussion about the winter fuel price increase situation.  Fred Barnes responded to the question with something to the effect of “I don’t see it.”  Notice the use of the first person pronoun, I.  Of course Barnes doesn’t see it; he has a lot of money.  A 50% increase in heating costs won’t materially impact his income.  Notice how there was no statement about the price increase on other people; not one word.  Barnes described the scenario entirely from the first person perspective.

Last week, the Republican controlled house voted to cut Medicaid and Medicare spending.  There was an article on RedState.com about the voting blocks for this proposal.  A majority of Republicans voted for it and a majority of Democrats voted against it.  The RedState author was chastising the Democrats because although we have been arguing for fiscal sanity for the last 5 years we were against this specific spending cut.  There was no discussion in the RedState article about how this cut would affect people.  There was no mention that many people depend on these programs as their sole source of healthcare.  None.  What mattered was the cut not it’s overall effect.

Let’s look at two professions.  The right loves to rail against the national teacher’s union.  But let’s think about what’s involved with teaching.  Teaching is not about money.  Teachers are not well paid; they could probably make a whole lot more money if they went into the private sector.  There’s another attraction – the attraction of helping somebody learn.  According to the American Psychiatric Association, over 90% of therapists are liberal.  Why?  The answer is therapists are about helping people overcome a problem.  Both of these professions require empathy – the ability to see and feel things from someone else’s perspective – to be good at your job.  The emotional fulfillment is just as important as the monetary compensation.  

I have never heard a Republican talk about another person’s perspective.  I have heard a tremendous amount of first person perspective.  The debates about gay marriage presents this issue in all its complexity.  The right’s argument is “Gay marriage threatens my way of life.”  No one on the right has ever thought about what it would be like to be discriminated against because of who you are.  No one on the right has ever thought “what would it be like…”  No one on the right has ever sat down with a person who was discriminated against and asked them “what’s it like…”  

Here is the bottom line:  The right can’t see someone anything from someone else’s perspective.

Free trade in the Americas would be a powerful antidote for poverty — if everyone played by the rules, Prime Minister Paul Martin said here today in a veiled shot at U.S. President George W. Bush.

“The fact is that President Fox, myself, President Bush, all of us believe strongly in the free trade of the Americas. But we know that it’s got to be based on rules — and rules that are listened to,” Martin said.

Martin thanked Fox [not Bush] for vocally supporting the need to respect the process for solving disputes in the North American Free Trade Agreement.

Ottawa has been at odds with Washington over the U.S. refusal to obey a NAFTA ruling that U.S. tariffs imposed on Canadian softwood imports are unjustified. Steep duties have cost producers more than $5 billion.

The U.S. has so far side-stepped a NAFTA ruling that it should repay $3.5 billion.

Martin was expected to raise the issue informally with Bush, but did not have a private meeting planned.

For those of you who are unfamiliar with the softwood lumber situation, here is a rough sketch.  Canada “sued” the US regarding the US’ tariffs and duties attached to imported Canadian softwood lumber.  Canada took the US to arbitration as required under the NAFTA treaty.  Canada won.  The ruling required the US to pay Canada the money collected from the tariffs and duties.  Now the US wants to talk to Canada about the situation.

Basically, Canada played by NAFTA rules and won.  Now the US wants a new sandbox to play in, even though we ratified the treaty thereby agreeing to adhere to its rules.

As a new hockey fan, I have gained a tremendous respect for Canada.  And this statement increases my respect.
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Over the last 5 years, the manufacturing sector has taken a tremendous hit.  Total number of jobs has precipitously declined. Manufacturers are taking advantage of international wage arbitrage and sending jobs overseas.  The trade and balance of payments deficits have ballooned, indicating the US is sending a larger percentage of its wealth overseas instead of reinvesting in the US.  
According to the Bureau of Labor Statistics, the US had 17,101,000 manufacturing jobs in January 2001.  September’s preliminary number was 14,234,000.  This is a loss of 2,867,000 jobs in 5 years.  Higher productivity is part of the reason for this decrease; factories are now able to essentially produce more with less.  However, an increase in productivity is not the sole cause of this loss.  When companies can produce a good in another country for less because the labor costs are far lower, they will move the factory.  Regrettably, the US does not keep statistics on the number of jobs lost directly to foreign displacement.  

Manufacturing jobs pay well.  According to the Bureau of Labor Statistics, the September average hourly wages of production workers was $16.57/hour, or $31,814/year.  While this is not a “king’s ransom”, it’s not bad.  

The National Association of Manufacturers has statistics on each state’s manufacturing jobs.  I looked several of the larger states and found the following.

California had 1,857,000 manufacturing jobs in 2000 and 1,539,000 in July 2005 for a net loss of 318,000.  The average annual manufacturing pay in 2003 was $56,500.

Texas had 1,068,000 manufacturing jobs in 2000 and 891,700 in July 2005 for a net loss of 177,000.   The average annual manufacturing pay in 2004 was $51,300.

New York had 750,000 manufacturing jobs in 2000 and 581,000 in July 2005, for a net loss of 169,581.   The average annual manufacturing pay in 2004 was $50,254.

The bottom line is the US is literally bleeding high paying manufacturing jobs.  These are jobs that helped to create and sustain the middle class – the backbone of the economy.  By letting these jobs disappear, the US is turning its collective back on the middle class, allowing them to fall into economic ruin.

Housing is the engine of the current US economy.  A conservative reading of the last 4 years of job gains indicates it is responsible for roughly 40% of job creation.  Last year, housing was responsible for 44% of the increase in individual net worth.  Mortgages outstanding have increased as well, replacing income gains as the primary driver of consumer spending.  As a result, any slowdown in housing could have serious ramifications for the economy as a whole.  Recent statistics indicate housing is slowing.  While there are not signs of a “bursting”, a slowdown of this asset’s appreciation could lead to trouble in 2006.
The internal numbers of last month’s existing home sales report indicates a possible slowdown.  The West (+.8%), Midwest (-3%) and Northeast(-4.1%) regions showed slight gains or losses in number of units sold.  The only region to show a gain was the South (+3.7%).  This gain is largely due to Katrina’s effect.  However, inventory of homes available for sale remained at 4.7 months.  This number has increased for 6 of the last 7 months.  In addition, available inventory increased 19.6% from last year’s level.  This increase in inventory is likely responsible for the drop in both median ($220,000 – $212,000) and average sales price ($269,000 – $260,000).  This increase in inventory is also probably responsible for the high level of rental vacancies.  

Monday, the Census Department issued its report on housing vacancies.  While the actual homeownership news was very good – a record number of Americans own their home – there was a very bad side as well.  The home rental vacancy rates are near 10-year highs.

The report stated that 9.9% of all houses available for rent were vacant.  This number has slowly crept up for the last 5 years.  The number is coming down from 10.1% earlier this year.  However, the number is still very high in comparison to the last 10-years.  

If people can’t sell a second property, they will be more inclined to rent in order to make-up some of the costs.  However, this increase in rental vacancies indicates rentals are harder for owners to secure.  In addition, a high vacancy rate depresses rental rates, making it more difficult for owners to recoup expenses.

The high level of inventory available for sale combined with the high level of rental vacancies may indicate a housing inventory glut may exist.  If this is true, price will continue to drop as sellers become more interested in closing a deal than getting top dollar.

The Census Department’s housing starts showed a similar regional skew to the existing home numbers.  The West (0% gain), Midwest (+1.9%) and Northeast (0%)all showed slight gains or stagnation.  The South increased 6.8%, again, largely because of Katrina.

The recent declines in consumer confidence add to real estate’s problems.  People are less inclined to make a major purchase.  As the  Conference Board reported a few weeks ago:

The Conference Board Consumer Confidence Index, which had plummeted in September, declined again in October. The Index now stands at 85.0 (1985=100), down from 87.5 in September. The Present Situation Index declined to 108.2 from 110.4. The Expectations Index decreased to 69.5 from 72.3 last month.

Many pundits blamed the drop on Katrina and high gas prices.  While the effects of these two events may be waning, we are entering the winter season.  Energy prices are projected to increase 50-90% due to the spike in natural gas prices.  This will continue to negatively impact consumer confidence for the next few months.  

Consumers already have a large amount of debt, making additional financing less probable.  In 2001, consumers borrowed a total of 464.5 billion in mortgages.  By the second quarter of 2004, that number was 892 billion – an increase of 80%.  Total outstanding household debt has increased from 7.6 trillion in 2001 to 10 trillion in 2004 – a 63% increase and over 90% of total US GDP.  At some point, the consumer will be tapped out in terms of borrowing, unable to add more debt until he pays down existing obligations.  

Finally, we have the Fed’s policy of interest rate increases.  Yesterday, they raised the discount rate to 4%.  There is strong speculation they will continue their 25 basis point increases through the end of Greenspan’s tenure.  In addition, the 10-year Treasury has broken though the technically important 4.5% trading level, closing yesterday at 4.57%.  As interest rates increase, home mortgages become more expensive making borrowing more unattractive.  

In summation,

1.) Sales of existing and new homes are slowing

2.) Inventories available for sale are increasing,

3.) Rental vacancies are high,

4.) The median and average home prices dropped last month,

5.) Consumer’s confidence is lower and their debt level is high, and

6.) The Federal Reserve is raising interest rates.  

It appears all the pieces are now in place for a continued slowdown in housing.

To the women I know online and offline:

Important gains of the last 40+ years are now under attack.  In all probability, they will be eroded over the next 20+ years.  This is largely due to the instillation of a right-wing majority on the Supreme Court and the better state-level legislative organization of the religious right.  Abortion and contraceptive freedom will no longer be a given.  While I do not think this will go so far as to affect individual property rights, I will put nothing past these people.  

Assuming this to be true, it is time to seriously consider underground organization for these dark times ahead.  I have no idea how this should or could be done.  But the time to begin planning is before the storm hits, not after.  
The days when women may have to cross state lines to obtain an abortion are more than possible.  This will require funding, transportation and safe places to stay while in transit.  For contraception, I would strongly suggest day after pill stockpiles in case of rape or incest along with a way to effectively and quietly communicate the whereabouts of such medicine.  Pharmacists in several states are already denying this medication to customers on moral grounds.  It is only a matter of time before this becomes more widespread and state sanctioned.  

This may seem extreme.  I think not.  Bush has publicly demonstrated he is the pawn of the extreme rightwing.  They are the only constituency who still support him.  Politically, he must maintain their approval or fall even lower in the public’s perception. These people will stop at nothing to legislate their morality on the rest of us.  And regrettably, the social advances women have made over the last few decades are the obvious, immediate targets.  

One of the right’s primary arguments against a single-payer national health system is it will be more expensive than private insurance.  They argue against another federal program.  What they have not recognized is all other countries that have public health plans are actually cheaper than the US as expressed in expenditures per GDP and per capita.  In addition, public health systems in some cases provide better overall health service as measured through an increased life expectancy.
The Organization for Economic Cooperation and Development tracks member state’s health systems.  They issue an annual study on the cost of health care and the overall effectiveness of the various systems.  In their latest report on the US, they note of member countries, only the US, Mexico and Korea rely primarily on private health insurance to provide medical care.  The median amount of GDP spent on health care of 29 countries has fluctuated between 7.9 and 8.4 for 2000-2003.  For 2000-2003, US health expense as a percentage of GDP was 13.1%, 13.8%, 14.6% and 15% respectively – by far the highest total of all countries.  Germany was the next most expensive country and their totals for the same years (2000-2003) were 10.6%, 10.8%, 10.9%, 11.1%, respectively.  So, as a percentage of GDP basis, the US spends between 34% and 75% more as a percentage of GDP than countries that rely primarily on public funds to provide health service.

The OECD also breaks health expenses down into amount spent per capita.  For the last four years (2000-2003), the median per capital expense for 29 OECD countries ranged from $2010 to 2248.  Over the same years, the US once again spent more than any other OECD country, with figures for 2000-2003 of $4539, $4888, $5287 and $5635.  Over the same time, Switzerland ranked second in per capita expenditures and Germany third.  It’s important to notice that the US’s private health care system routinely spends at least twice as much per person than other countries with public health systems.  

So, the US spends the most on health care.  Our system must provide some incredible benefits!  Actually, the US benefits are below median for all OECD countries.  In 1990, the median life expectancy of males and females for all OECD countries 75.5 years, while the US’ number was 75.3.  In 2000, the OECD median life expectancy was 78 and the US’s was 76.8.  In 2003, the OECD’s number was 78.5 and the US’ was n77.2.  For the years 2000-2003, the OECD’s infant mortality rate as expressed as number of deaths per 1000 decreased from 5.1 in 2000 to 4.3 in 2003.  In contrast, the US’ numbers increased from 6.9 in 2000 to 7 in 2003.  So, in OECD countries, people are living longer and fewer kids are dying.

Countries with public health insurance spend less per GDP and per capita on health expenses, they live longer, and fewer infants die.  That sounds damn good to me, but then again I like facts instead of faith.  

OECD Link

 http://www.democraticunderground.com/…

Brit Hume, who normally busies himself minimizing the 2000 brave Americans who died for a lie in Iraq, just told the African-American journalist, Juan Williams, “Someone needs to hose you down.”

Of course, this house slave might just say, “Thank you Sir, may I have another,”…or maybe he will say that this kind of neo-con racism proves that he all along has been unworthy of being called a journalist

From a DailyKos Diary.

Please email Media Matters:  mm-tips@mediamatters.org

My father is a saver.  He had a lucrative career as a corporate lawyer.  But, he didn’t spend like it.  Although I never wanted for anything, we were certainly not awash in things.  My mom and dad have had the same washing machine for 20 years.  It works fine, so there is no need to replace it or upgrade to the newest model.  My parents conspicuously saved for their retirement.  And now, they are fine.  I often joke with my dad that he should get the crowbar out, open his wallet and spend some money on himself.  The point is my dad is a saver.  And I am damn proud of his actions.
My dad is also in the distinct minority of Americans.  Collectively, we don’t save anymore.  We spend everything we make.  And it is a problem that is now an epidemic.

Why is savings important?  There are two very important reasons.  First, at the macro-economic level savings is the engine of future growth.  Individuals deposit their savings into the financial intermediaries such as banks, stock brokers, life insurance etc….  The intermediaries in turn lend the money in larger amounts to businesses that in turn invest in assets to increase their profits.   The more money available, the lower the interest rates charged for loans.  A key concept to remember is savings flow-through the economy from households to financial intermediaries to business.  Secondly, and more practically, savings is vital in case of an economic downturn.  If a person loses his job and has enough savings to still pay his bills for an extended length of time, that person has the ability to manage his affairs more prudently.  

At the national level, the US savings levels are pathetic.

The only organizations actually putting aside money are corporations.  The amount of money they put aside was 174.9 billion in 2000, which increased to 397.3 billion in 2004.  

The Republicans are in charge at the federal level.  This means borrow and spend is in full force.  The federal budget deficit has ballooned under the fiscally conservative party again.

At the household level, the numbers are poor.  First, economists define “savings” as disposable income (personal income – taxes) minus consumption expenditures.  A non-ecogeek way to say this is savings is what is left over after you pay your taxes, bills and general expenses.  Essentially, we are trying to isolate money households don’t spend today that they can readily access tomorrow with no financial strings attached (such as interest) should they need it.  

In 2000, savings was 2% of personal income and 1.7% of GDP.  In 2004, the numbers were 1.5% of personal income and 1.26% of GDP.  The latest personal income numbers indicate that number is nearing 0%.  In words, at the macro level, people are spending more and more of their income every month and putting less and less away for future consumption.

Over the same period that people were not putting money away, they were increasing their debt levels.  Total household borrowing was 5.5 trillion in 2000 and a little over 10 trillion in 2004.  Explosive growth in mortgages is the primary reason.  Total mortgage debt increased from 3.36 trillion in 2000 to 8.78 trillion in 2004.  People aren’t saving from their paychecks.  Instead, they are borrowing against future earnings and anticipated asset appreciation.  

The above examples illustrate a fundamental US economic problem: we are too dependant on consumer spending for economic growth.  We are slowing moving away from the concept of making things to the concept of consuming things.   A primary argument used by this administration in trade talks is other countries have insufficient demand.  What they fail to recognize is the US has too much demand and is too dependant on demand for economic growth.  

More importantly, savings allows the US consumer to weather financial storms and enjoy retirement.  The less we save as a country, the more vulnerable we are to economic downturns.  A lack of savings is essentially a huge problem that is waiting to cause serious damage.

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