Topic: Commentary

Reverend Wright, Bill Ayers, "bitter" - when will the nonsense attacks end? While there is some arguable legitimacy to the Reverend Wright controversy there is no legitimacy to either the Ayers or the "bitter" controversies. To make things worse, both the Ayers and the "bitter" controversies were launched into the media spotlights by Democrats, specifically by Hillary Clinton's campaign in the "bitter" case and by a former Clinton advisor, George Stephanopoulos, in the Ayers case.

It is not enough that the Clintons launched the attacks on a fellow Democrat however, the mainstream media has been happy to play along as well.

First let's address the "bitter" issue. What Hillary Clinton did, and what the rest of the mainstream media just went right along with, was take a small part of a long and complex answer way out of context and portray in a way that had a meaning completely opposite of what Obama was saying.

What Hillary Clinton, and following her John McCain, have accused Obama of is being "out of touch" and "elitist" because of his supposed "bitter" remarks. Now, the quote that you see going around and being repeated was a quote that was taken from a Huffington Post blog entry that contained both the full audio recording of his remarks, plus a hand typed transcript by the author of the "bitter" segment. What everyone is repeating is what the blog poster had hand written, but every single media outlet I have seen has failed to actually extend that out and put it into context, even though the audio is right there and accessible.

Here is the portion comment that has been quoted everywhere:

"You go into some of these small towns in Pennsylvania, and like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing's replaced them. And they fell through the Clinton Administration, and the Bush Administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not. And it's not surprising then they get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations."

Here is the blog post that contains the full audio recording of that event:

http://www.huffingtonpost.com/mayhill-fowler/obama-exclusive-audio-on_b_96333.html

Starting at about the 32 minute mark is where Obama starts talking on the subject. It is very clear from his answer that he in fact has a very in-depth knowledge of Pennsylvania and of small town America. Likewise, it is also clear that the theme he was working on was connecting with people who have become cynical of government, which is the whole basis of his message of hope. He was building on this idea that many voters have become cynical and bitter, which is why he has made hope the theme of his campaign.

His answer was very nuance, all of which was cut out from the quote. His answer, when you listen to the audio, displays no hint of being "elitist" whatsoever.

Ironically, there was another article on the Huffington Post from someone else who was at the event that also discusses totality of his comments. You can read that article here: I Was There: What Obama Really Said About Pennsylvania

From the article:

"Obama's response to the questioner was that there are many, many different sections in Pennsylvania comprised of a range of racial, geographic, class, and economic groupings from Appalachia to Philadelphia. So there was not one thing to say to such diverse constituencies in Pennsylvania. But having said that, Obama went on say that his campaign staff in Pennsylvania could provide the questioner (an imminent Pennsylvania volunteer) with all the talking points he needed. But Obama cautioned that such talking points were really not what should be stressed with Pennsylvania voters.

Instead he urged the volunteer to tell Pennsylvania voters he encountered that Obama's campaign is about something more than programs and talking points. It was at this point that Obama began to talk about addressing the bitter feelings that many in some rural communities in Pennsylvania have about being brushed aside in the wake of the global economy. Senator Obama appeared to theorize, perhaps improvidently given the coverage this week, that some of the people in those communities take refuge in political concerns about guns, religion and immigration. But what has not so far been reported is that those statements preceded and were joined with additional observations that black youth in urban areas are told they are no longer "relevant" in the global economy and, feeling marginalized, they engage in destructive behavior. Unlike the week's commentators who have seized upon the remarks about "bitter feelings" in some depressed communities in Pennsylvania, I gleaned a different meaning from the entire answer.

First, I noted immediately how dismissive his answer had been about "talking points" and ten point programs and how he used the question to urge the future volunteer to put forward a larger message central to his campaign. That pivot, I thought, was remarkable and unique. Rather than his seizing the opportunity to recite stump-worn talking points at that time to the audience -- as I believe Senator Clinton, Senator McCain and most other more conventional (or more disciplined) politicians at such an appearance might do -- Senator Obama took a different political course in that moment, one that symbolizes important differences about his candidacy."

So, this whole "bitter" business is literally a misrepresentation of the meaning of what he said and the views that expressed about Pennsylvanians and people in small towns. Now that is to be expected in politics, but it is certainly not to be expected to come from a member of your own party. In other words, the Clinton campaign didn't just attack Obama, they misrepresented him egregiously in the process. Its one thing for a Democrat to attack a fellow Democrat on the issues during a primary, but to smear the front running Democrat with falsehoods is really quite nasty and destructive. Ironically, in the same speech that the "bitter" remarks came from, Obama talks about the possibility of being "Swiftboated" by the Republicans in the general election, but little did he know that his remarks from that very speech were going to be used to Swiftboat him by a Democrat days later.

Now on to the "Bill Ayers connection". There is no Bill Ayers connection, and once again Hillary Clinton, followed up by the mainstream media and John McCain, has manufactured a controversy but in this case even more deceitfully.

There are several points here.

First of all, in every case that Barack Obama has been in the same room with Bill Ayers at the same time, at least as far as anyone knows, it has been due to the fact that both of them were invited to the same place by other people. Now, given that they both live in the same city and are both political figures this should be no surprise. The point is that none of this is even under the control of Barack Obama. I guess it would have been possible for Obama to refuse to be in the same room with Ayers and to have turned down invitations to events where Ayers was going to be present, but what good would that have done?

Secondly, the attempt to connect Bill Ayers comments about not regretting setting bombs with September 11th, which Hillary has repeated several times, is completely just outlandish, since his comments merely happened to have been published on September 11th, they weren't made on 9/11 and they weren't made in reference to 9/11. Hillary, John McCain, and the media, despite knowing that he didn't make those comments on 9/11 or in relation to 9/11, all called Ayers a terrorist and then followed that up immediately with the comment that on 9/11 he said that he didn't "regret setting bombs" (in the 1960s to protest the Vietnam War).

The point here is that while what Ayers did in the 1960s may rightly be viewed as horrible, what these comments do is try to associate Ayers with present day serious terrorism.

But lets look at the fact about Obama's "connections" to Ayers.

Obama served on the board of directors of a local Chicago charity that works to address issues of poverty and homelessness. Bill Ayers served on the board of that same charity. Given that Obama was a rising political figure and a community organizer working to address issues of poverty is makes sense that he would have been invited to serve with such an organization. Should he have turned this position down? Why would he have? Even if he didn't like Bill Ayers and thought he was a horrible person, why would he have turned the position down? By not serving on the board he wouldn't have been able to help the community as much and he wouldn't have been able to possibly exert influence to counteract any possible influence of Ayers. In other words, even if he thought Ayers was a "bad guy" he still would have been wise to join the board. Not joining would have accomplished nothing, and in realty just allowed Ayers to be more influential. Even if someone from the KKK were on the board he should have joined. Him serving on that board is not a relationship with Bill Ayers. Hillary knows that and John McCain knows that.

The next supposed evidence of a relationship with Bill Ayers is the fact that Obama attended a party in his honor at Bill Ayers house. This may sound kind of damning, but Obama had nothing to do with organizing this benefit and it wasn't the only such party. The party was organized by the incumbent state senator that Obama was campaigning to replace (she was leaving the state senate) Ayers was a friend of hers, not of Obama. Obama merely accepted the invitation. This was noted in an AP article on the subject:

"When Obama was organizing his first race for the state legislature, the incumbent lawmaker he hoped to replace introduced him to her supporters and urged them to back Obama. One introductory event took place at the home of Ayers and Dohrn."
- Fact check: Obama and former radical

The way that Hillary, McCain, and most of the mainstream media tell it, Obama was a friend of Ayers who decided to have a party at Ayers house, but that is not at all the case. Again, he could have turned down the invitation, but would it have been wise for a freshman political figure just getting into politics to tell his strongest supporter, a state senator, that he didn't want to attend the event she was throwing for him?

Lastly, there is the fact that Obama was a panel speaker at a few events where Ayers was also a panel speaker. Again, these are situations that arose due to the invitations of others. I've been a panel speaker with people whom I totally disagreed with before. Should he have not attended those presentations because Ayers was there? How would that have been of any benefit? Again, they were both at these types of events because they both live in the same area and both were involved with issues of addressing poverty and homelessness. What was Obama supposed to do, move to a different city or tell people that he refused to be in the same room with Ayers? It doesn't make any sense. Bill O'Reilly has attended several events that Richard Dawkins, the famous atheist, has attended. Should O'Reilly now be condemned as an associate of Dawkins, thus labeling him the "friend" of an atheist, thus  ruining his conservative credentials? Again, this makes no sense, it is "gotcha" politics, and the bad thing is that a fellow Democrat is the main one pulling this nonsense against Obama and that the media is going right along for the ride. As we can see from the Pennsylvania elections, Hillary's deceptive slander has paid off for her.

Meanwhile, as Barack Obama is attacked for the most tenuous of "relationships" with people like Ayers and Rezko, John McCain's involvement in the Keating scandal is barely even mentioned in the news media at all. This is not to say that John McCain should be dragged through the mud over the Keating issue, but clearly his involvement with Charles Keating went far beyond that of Obama's ties to either Ayers or Rezko, and given that John McCain has said that the Keating investigation was worse than his time as a POW in Vietnam, I find it amazing that he is so eager to thrust such abuse onto someone else.

So far Barack Obama has not brought up the Keating issue, but if John McCain were to try and press Obama on things like Rezko or Ayers in the general election, he would certainly have to address the Keating issue once again. John McCain was not found guilty of any crime in the Keating trails, but it is certainly a fact that there was a very close and inappropriate relationship between John McCain and Charles Keating, certainly a relationship that went way beyond that of Obama and Rezko.

Keating was a corrupt land developer who became close friends with John McCain and raised hundred of thousand of dollars for him. John McCain even vacationed with Charles Keating, used Keating's private jet, and invested in Keating properties. Charles Keating was then involved in the Savings and Loan scandal of the late 1980s, and it was determined that John McCain did act inappropriately on behalf of Charles Keating prior to the break of the scandal to head off investigations of Keating's savings and loan.

More about the Keating scandal here:

http://en.wikipedia.org/wiki/Keating_Five

The Keating Five

Keating Scandal Still Haunts McCain

Again, the point here is not to attack John McCain over this issue, but rather to show that the alleged relationships between Barack Obama and people like Ayers or Rezko are quite insignificant compared to similar types of issues of the other candidates. While neither McCain nor Clinton were found guilty of crimes in the relationship scandals that they were involved in (Clinton-Whitewater, McCain-Keating), both of them were much more heavily involved in inappropriate conduct and relationships.

Topic: Commentary
With the deadline for filing taxes have past, we are now getting an idea of the incomes for 2007. It turns out that several hedge fund managers had individual incomes of over one billion dollars last year. Keep in mind as well that this income doesn't count as wage income and so they were taxed at a flat rate of only 15% on most of this income, far lower than the tax rate of most working class people.

The top five hedge fund managers all had incomes of over a billion dollars. The top was John Paulson who had an income of $3.7 billion last year.

The New York Times, using the typical lexicon, states that these men have "earned" this income, but have they actually earned it? They have certainly received it, what did they actually create this value? Certainly none of them created any of this value, they have not "earned" it, they have successfully used the legal instruments of the capitalist system to transfer ownership of value from the people who produced that value to themselves.

Doing this certainly required risk taking and also some effort on heir part and the part of their corporations, but the fact remains that none of these people actually created any value, what they did was use systems that have been designed to redistribute value from value producers to themselves as well as other property rights owners.

How is it possible for these individuals to receive over a billion dollars of income in a single year? Obviously they aren't doing it by working 100,000 times harder or contributing 100,000 times more to society than the average school teacher. They are able to amass this income through the exploitation of complex legal instruments that have been constructed by financial corporations to leverage capital ownership rights in ways that funnel massive amounts of the value that is produced by workers around the world unto themselves and their corporations and investors.

What exactly did these fund managers do to reap these rewards? Several of these fund managers, including John Paulson, received their income by betting against mortgage holding companies and mortgage backed instruments, much like short-selling a stock. When the mortgage industry went bust, they received windfall profits by having bet correctly that there would be major losses, so how exactly does that work. Other investors were betting against them and then of course lost even more money when things went bad, having to pay these hedge funds the original value of these mortgage securities from 2004 and 2005 while they were now worthless.

But in all of this, what value was created? How did any of that produce anything of value or produce any product that improved anyone's lives? It didn't. They produced no products and there is no benefit for anyone other than themselves for these transactions. So, where does that money really come from? How do these people actually receive the billion plus dollars of income since they produced nothing?

Ultimately that value comes from you and me and millions of other workers around the world. It is taken from us and handed to them.

What has to be acknowledged, understood, and accepted, is that the incomes of these people are not a product of the value of the "work" that they do. These incomes are the products of the exploitation of financial instruments and laws that have been developed which allow these people to effectively, and legally, steal from the economic system. These people are not adding value to the system, they are only taking value from it. Not only are these people taking without contributing, but they are taking massive amounts and to top it off they are paying very low taxes on the income.

The United States had a federal budget deficit of $162 billion in 2007. The top 50 hedge fund managers had a combined income of $29 billion. That's fifty people alone, who produced no product, whose combined income is equivalent to approximately 20% of the total budget deficit.

The fact is that the redistribution of value through financial instruments is not a means of creating value. What enables these massive incomes is not any contribution of the individual, it is the leverage of the financial system and the instruments of capital. That isn't to say that there isn't some skill of the financial manager involved, but this skill isn't used in a way that actually creates any value any more than the skill of someone at playing poker in a card game creates value. When one plays a card game the value is brought to the table by the participants. That value is created somewhere else by doing something else. During the playing of the game the value is redistributed, and based on the skill of those involved someone may be able to consistently acquire most of the value by playing the game, but playing the game doesn't create the value it is just a means of determining how the value changes hands.

For example, if the two card players are farmers, one may grow corn and the other cotton. They both work hard to produce tangible products that they sell to receive money. They both work to product $100 worth of product. That is value creation for which they were compensated. They then take that $100 to a card table to play against each other. One man wins and he takes home $200. Certainly the may have won due to his own card playing skills, but his card playing skills didn't produce the $100 that he won, the other farmer produced that value by growing a crop.

This is what is taking place with these hedge fund managers, except the value that they receive is coming from workers who are not voluntarily or knowingly giving it up. Through the financial laws massive redistribution of wealth is taking place to a small handful of capital owners who are amassing insane fortunes while actually not even contributing anything to society or creating any value themselves. (They may or may not use the money they receive to benefit society in other ways after the fact.)

That is the current state of the American economy and of global capitalism. This has always been the basis of capitalism, and it has always been inherently unfair, but over the past 20 years what has happened in America especially is that the level of unfairness and the power of the financial instruments has reached new heights and those issues are now very strongly undermining the very foundation of the American, and indeed global, economy.

Commentators often note that the last time the American economy was this unbalanced was the year before the beginning of the Great Depression. Actually, there are several factors that make the American economy even more unstable than it was in 1929. Today America is a "postindustrial" economy whereas in 1929 is was still a developing industrial power. Today America is massively in debt, much more than in 1929. Today average American families have more financial obligations than that did in 1929. Today America is spending a much larger portion of GDP on the military than in 1929. Today America spends a much larger portion of GDP on health care than in 1929. Today resources are becoming more scarce around the world. Today the world is a much more economically competitive. Today the American grade-school education system is one of the worst in the industrialized world.

In short, there are actually many reasons to view the American economy as being at greater risk than it was in the 1920s, with more at stake and more to lose. That doesn't necessarily mean that another "Great Depression" is coming, but its also not out of the question either, and the more we track down the same fundamental economic path that we have been going for the past 30 years the more likely it is to happen.

See: Wall Street Winners Get Billion-Dollar Paydays

Topic: Commentary

With all of the recent media coverage of the Tibetan protests and the Olympic torch I figure that something has to be said about the reality of the Tibetan issue. Firstly let me say that the way that the Chinese have handled the Tibetan unrest is not appropriate, and that they have done an even worse job handling the public relations of this matter. Nevertheless Western, and particularly American, media have completely misportrayed the Tibetan issue and are seizing on the Tibetan protests as an opportunity for outrageous anti-Chinese propaganda.

The issue of Tibet is in fact very complicated, much more complicated than the vast majority of Americans realize.

What few Americans realize is that the current "Free Tibet" movement in rooted in Cold War anti-Commmnist campaigns launched by the CIA. When the Chinese liberated Tibet in 1950 American leaders immediately saw this as another example of the spreading of Communism that had to be stopped.

In fact, however, the overwhelming majority of Tibetans did view the Chinese occupation of Tibet as a liberation, and the majority of Tibetans fought on the side of the Chinese when they invaded. Even today the majority of Tibetans support Tibet being a part of China and favor Chinese rule over the rule of the Lamas.

The Tibetan uprising of 1959 that we hear so much about in American media was in fact a CIA operation that had little support from the local Tibetan population. The fleeing of the Dalai Lama and the setting up of the "government in exile" in India were all encouraged and aided by the CIA. The Dalai Lama was on the CIA payroll from the 1950s through the early 1970s, and during the 1950s and 1960s the CIA was funding the small Tibetan guerilla opposition movement.

So, the "Free Tibet" movement is, at its base, the remnants of an old Cold War CIA program intent on undermining the Chinese government. From all appearances it seems that the CIA did fully abandon this program in the 1970s and stopped all funding to Tibetan opposition groups, but by that time the movement had taken on a life of its own, similar to how Al-Queda took on a life of its own after the CIA had funded Bin Laden and other Jihadists during the Afghan war against the Soviets during the 1980s.

The reality about Tibet is that Tibet was ruled by a horrible and brutal regime, the regime of the Dalai Lama, prior to the Chinese liberation. The current Dalai Lama was very young at the time of the liberation and personally bore little of the responsibility for the Tibetan government, and he himself has become a moderate and reasonable person during his time outside of Tibet, but the Tibetan system prior to the Chinese occupation was essentially a Medieval kingdom where 90% to 95% of the population were slaves ruled by an extremely abusive and oppressive religious aristocracy. Even in 1950 just prior to the Chinese liberation there were no secular schools in Tibet, 95% of the population was illiterate, the average life expectancy was 35 years, there was no movement towards modernization, there was basically no medical care at all aside for the elite, women had no rights to even choose their own partners, much less to do anything else, all of the land was owned by less than 10% of the population, and people were taught from birth that the Dalai Lama was god, they had to worship him, and they their station in life was a part of the order of the universe and that they could do nothing to change their lot in life. If they were born peasant farmers they were taught that this was punishment for being a bad person in their past life and that they had to suffer punishment and abuse in this life as atonement for their past evils. They were taught from birth that the wealthy were being rewarded for being good in their past life and that opposition to them would only bring more punishment in the next life (as well as this one).

At this time the Tibetan rulers, the Lamas, were also cooperating with the Europeans in the exploitation of the Tibetan population, exporting goods to Europe for low prices on the backs of the Tibetan slaves.

This is what the Chinese liberated the Tibetan people from, and it is why the majority of Tibetans supported the Chinese invasion and continue to support the Chinese rule. However, you don't hear anything about this in the American media.

Not only this, but the charges against the Chinese by Tibetan exiles (mostly former members of the ruling cast or Tibetan who never lived in Tibet) are largely bogus. The Chinese government has put a lot of effort into trying to improve conditions in Tibet. Sure there are cultural conflicts, but these are blown out of proportion by Western media. More Tibetan can read and write in their native Tibetan language now than under the rule of the Lamas. There is in fact more religious freedom in Tibet now than under the rule of the Lamas. Buddhism has never been outlawed in Tibet, though the strongest elements of it were suppressed, but this was in fact a good thing. Tibetan Buddhism was the core of the oppressive feudal system in Tibet. What the Chinese did in Tibet was basically no different than what the Europeans did all over Europe, taking rights, power, and land away from the Catholic Church during the 17th and 18th centuries because the Church was part of an oppressive aristocracy. There was zero religious "freedom" in Tibet under the Lamas. What there was was religious tyranny, more like what currently exists in Saudi Arabia. Now Tibetans can actually learn about other religions and can adopt other religions, which they couldn't do in the past. In fact in the past most Tibetans couldn't even practice Buddhism the way that they do today. Now more Tibetans can practice Buddhism in a fuller way today than they could in the past, where learning about Buddhism was restricted to the elites, just like in past only Catholic priests were allowed to read the Bible but today everyone can.

More Tibetans own their own land now that any time in Tibetan history. Tibetans have far more rights and freedom under Chinese rule than they did under the rule of the Lamas.

The Chinese actually have many laws that are preferential to the Tibetans. They are spending more money to preserve the Tibetan language and to teach it to others than the United States spends on preserving all Native American languages combined. The so-called "one child policy" doesn't apply to the Tibetans, even though it does apply to the Han Chinese. The Chinese government spends far more on infrastructure and services in Tibet than it collects in taxes from the Tibetan region. The Chinese have spent enormous resources bringing electricity and roads to Tibet  without charging the Tibetans a dime for it and the majority of Tibetans are overwhelmingly supportive of such efforts.

Yes there are conservatives and extremists who don't like the modernization taking place in Tibet, this is no different than what takes place anywhere. A perfect example is the FLDS polygamy sect in America that was just raided in Texas. Their first complaint was that the raids were a form of religious oppression by the government. There are always going to be complainers. The problem with the Western media is that it gives voice solely to these complainers and does nothing to look at the reality of the situation or to report fairly on the views of everyone in Tibet.

In addition, the Chinese also make things worse by simply responding with slogans and trying to suppress access to the dissenters. The Chinese actually are on the right side of this issue and have a lot that they can honestly point to as having gone out of their way to help the Tibetans, but the way they react only makes it look like they have something to hide. If the Chinese leadership would be more open and more honest they would get more people on their side.

But really the pattern of anti-Chinese sentiment in the American media and even among American leaders, largely among the Democrats actually, is outrageous.

For more on this see:

Friendly Feudalism: The Tibet Myth
Tibet: who’s for feudalism?
Western media miss the real Tibet story
The unusual suspect
Risky Geopolitical Game: Washington Plays ‘Tibet Roulette’ with China

Topic: Commentary
In response to attacks from the Clinton campaign and from others in the media over comments made by his pastor several years ago, presidential candidate Barack Obama gave a speech Tuesday on the subject of race relations in America.

After having watched Obama's speech on race and read the transcript I think that this was without a doubt the best speech I have seen any politician give in my lifetime. It was honest, blunt, and took a thorny issue straight on with a perfect sense of balance. On top of all that he showed tremendous poise and grace.

The one thing I would have liked to have seen him say that he didn't say is that Geraldine Ferarro is clearly not a racist. He hinted at such a sentiment, but I think he would have done well to completely absolve her of that issue and move on. I think her statements were wrong, but as Obama himself has said in the past, they weren't racist.

I also think that his speech was risky and was an example of real straight talk that by far eclipses the speeches given by McCain or Clinton during this campaign. "Straight Talk" John McCain has been doing more pandering this campaign than anyone, and has surely been giving the least straight talk, unlike during is earlier 2000 campaign.

Overall I would have to say that I was impressed with Obama's speech and very much agree with it. The only thing I didn't really agree with actually was his denouncement of his pastor's sermon, though I understand why that was obviously essential. When it comes to the sermons in question from Obama's pastor, Reverend Jeremiah Wright, I actually agree with, or at least sympathies with, everything he said in those now famous quotes.

Not only that, but the real irony is that one of the statements of Reverend Wright that drew the most criticism, his statements about the 9/11 attacks, actually echoes statements by former Republican presidential candidate Ron Paul.

Here is what Reverend Wright said about the 9/11 attacks:

"We bombed Hiroshima, we bombed Nagasaki, and we nuked far more than the thousands in New York and the Pentagon, and we never batted an eye,We have supported state terrorism against the Palestinians and black South Africans, and now we are indignant because the stuff we have done overseas is now brought right back to our own front yards. America's chickens are coming home to roost,"

This statement from Reverend Wright is absolutely true. As someone who is not a church goer myself, and who largely sees churches as instruments of state support, I'm glad to see such critical and honest discussion in a church. The reality is that Reverend Wright was right, and that perhaps is what scares people even more. But more importantly, look at a speech that Ron Paul gave on the floor of the House of Representatives:

"Excessive meddling in the internal affairs of other nations and involving ourselves in every conflict around the globe has not endeared the United States to the oppressed of the world. The Japanese are tired of us. The South Koreans are tired of us. The Europeans are tired of us. The Central Americans are tired of us. The Filipinos are tired of us. And above all, the Arab Muslims are tired of us.

Angry and frustrated by our persistent bullying and disgusted with having their own government bought and controlled by the United States, joining a radical Islamic movement was a natural and predictable consequence for Muslims.

We believe bin Laden when he takes credit for an attack on the West, and we believe him when he warns us of an impending attack. But we refuse to listen to his explanation of why he and his allies are at war with us.

Bin Laden’s claims are straightforward. The U.S. defiles Islam with military bases on holy land in Saudi Arabia, its initiation of war against Iraq, with 12 years of persistent bombing, and its dollars and weapons being used against the Palestinians as the Palestinian territory shrinks and Israel’s occupation expands. There will be no peace in the world for the next 50 years or longer if we refuse to believe why those who are attacking us do it.

To dismiss terrorism as the result of Muslims hating us because we're rich and free is one of the greatest foreign-policy frauds ever perpetrated on the American people. Because the propaganda machine, the media, and the government have restated this so many times, the majority now accept it at face value. And the administration gets the political cover it needs to pursue a 'holy' war for democracy against the infidels who hate us for our goodness."

There is little difference between the substance of what Dr. Paul said and what Reverend Wright said, its just that Reverend Wright was fired up and speaking from the pulpit, plus he's black, and Dr. Paul is was a white man speaking more evenly, though still a little fired up, before a legislature.

As for Reverend Wright's "God Damn America" sermon, from 2003, I generally agree with that sermon too.

"The government gives them [blacks] the drugs, builds bigger prisons, passes a three-strike law and then wants us to sing 'God Bless America.' No, no, no, God damn America, that's in the Bible for killing innocent people, God damn America for treating our citizens as less than human. God damn America for as long as she acts like she is God and she is supreme."

I don't believe that the government is giving people drugs. Although there is indeed evidence that the CIA was involved in some cocaine dealing in America to help the Nicaraguan conservatives fund their war against the Socialist Sandinista regime, that is was an exceptional case.

But why do people like Reverend Wright criticize America? Because they hate America? No, because they love America and the rest of the world too. If they hated America they wouldn't bother with such criticisms, and I can certainly identify with this because I share much of that same sentiment myself. I'm certainly critical of much of American policy and American culture, but I wouldn't even bother wasting my time on this website if I hated America. Critics put in the effort because they care. And, any true Bible scholar should know as well that Reverend Wright's "damning of America" directly follows Biblical style and motifs. Anyone who has studied the Bible has to know that the vast majority of the Bible is condemnational. Almost all of the books of the Old Testament contain condemnations of Israel and the Jewish people. In the New Testament basically all that Jesus does is condemn everything. Reverend Wright's sermon is deeply Christian and heavily rooted in the Biblical tradition of condemnation of injustices and seeking to find meaning in disastrous events through criticism of the nation for not following God's commandments and principles. Reverend Wright's "God Damn America" sermon could be lifted straight from the pages of the book of Isaiah or any number of other books. So, this criticism of Reverend Wright's sermon by ostensible Christians I find to be completely baseless and reflective of their own lack of any real connection to scripture.

The reality is that many "white Christians" really know nothing about the Bible and nothing about Christianity and nothing about the real virtues of the religion. They tend, instead, or focus on actually the worst aspects of the religion, especially the conservatives. For conservative Christians the religion is more about tribalism, condemning non-believers, believing that their own nation is God's chosen people, and taking ancient stories as literal truth. These are all of the worst aspects of the religion. To conservative white Christians the Bible is a book to beat people over the head with and to reinforce patriotism and subservience.

Many black Americans, however, and liberal Christians in general, identify with the stories of suffering and struggle in the Bible and they focus on the message of working against poverty and oppression. These are the best parts of the religion and the parts of the religion that Reverend Wright apparently focused on. The damning of Israel by God is a constant theme in the Bible, and the reason for this damnation every time is that the people were supposedly not following God's desire to help the poor, to help the oppressed, etc., and in the Bible when the Jews were accused of not helping the poor and oppressed this was accompanied by attacks from foreign invaders, enslavement, and natural disasters. So, Reverent Wright's sermon follows directly in that vein.

The reality, of course is that much of the Bible was written by people just like Reverend Wright, social critics who loved their people and their country but wanted to right what they perceived as wrongs in society. They had little understanding of the real way that the world works, so they often blamed natural disasters and invasions on things that weren't really responsible for those events, but in the case of Reverend Wright's sermon the connections that he draws are real. American foreign policy did play a large role in bringing September 11th upon ourselves. American society and government policy is partly responsible for the strife that we have within our own population, especially among minorities. So, I agree with Reverend Wright and I also can clearly see that his sermon was supremely rooted in Christian an Biblical tradition.

Transcript of Barack Obama's speech on race

Topic: Commentary
There is a lot going on with the economy at the moment and it seems that very few people, neigh hardly anyone, is really grasping the situation. That in and of itself is pretty remarkable.

Recently the media has sounded worries about "stagflation", which is what I have been addressing here for years. The fundamentals behind all of this should be quite obvious, but no one seems to be addressing these fundamentals. A recent New York Times article called Totally Spent by Robert Reich, whom I do respect, hinted at the issue, but even he failed to completely grasp it.

In Totally Spent Reich stated:

"WE’RE sliding into recession, or worse, and Washington is turning to the normal remedies for economic downturns. But the normal remedies are not likely to work this time, because this isn’t a normal downturn.

The problem lies deeper. It is the culmination of three decades during which American consumers have spent beyond their means. That era is now coming to an end. Consumers have run out of ways to keep the spending binge going.
    
The only lasting remedy, other than for Americans to accept a lower standard of living and for businesses to adjust to a smaller economy, is to give middle- and lower-income Americans more buying power - and not just temporarily."

This is all true. Reich's assessment of the situation is spot on, but when he comes to addressing the situation that's when he goes off course.

The remedy that Reich proposes is this:

"The only way to keep the economy going over the long run is to increase the wages of the bottom two-thirds of Americans. The answer is not to protect jobs through trade protection. That would only drive up the prices of everything purchased from abroad. Most routine jobs are being automated anyway." 

Okay, well, he's sort of on the right track, but not really. The keys here are "automation" and "abroad". As I stated back in 2003 (National investment program and Labor in foreign countries), the only real solution lies in both improving wages abroad and increasing ownership of capital among the broad population. At that point automation, which is what we need more of, can actually be a real benefit.

The thing is that the Democrats and the "pro-labor" folks have it all wrong. Improving the economy is not about "protecting jobs", indeed protecting jobs is the worst possible thing we can do. The best way to understand this is to look at the fundamentals.

Improvement in the standard of living, which is what the economy is all about, is about increasing production. More than that, it is about increasing efficiency, and efficiency basically means producing more with less human work or less energy invested. The way to increase efficiency is through automation, not "increasing wages" for Americans. Increasing wages for Americans is what drives jobs overseas, so you can't increase wages in America without increases in wages in foreign countries as well without expecting to lose jobs in the process.

The only solution is two fold. First, increase the distribution of capital ownership in America and secondly work to ensure that wages in the rest of the world rise as well. At present, the exact opposite of these two things are what is happening. It is true that wages are going up in foreign countries, but not as rapidly as they should be, and in fact American policies work to keep wages in foreign countries down, they do nothing to help them rise.

The major key though is distributing capital ownership. Capitalism is all about capital ownership. The owner of the capital is the one who owns the rights to the profits. Workers have no rights to profits, indeed the workers are the ones who work to produce the profits that the capital owners take from them, thus the problem that America finds itself in today. The wealthy have become exponentially more wealthy over the past 20 years, while wages have completely stagnated over the past 30 years. The reason that the wealthy have become exponentially more wealthy as wages have stagnated is because productivity has increased, but all of the gains from that productivity have been realized via profits and thus they are realized by the capital owners and executives.

But we really shouldn't be trying to increase wages or to make people dependent on wages, what we should be doing moving to a situation where the share of capital ownership is more evenly distributed, where every individual is "a capitalist". As automation and computerization, etc., play a larger and larger role in production, individuals have to share ownership of the "means of production". That is the single and only possible solution to the long term economic problems that will be faced in a progressive and technologically advancing economy. The road that some places in Europe have taken, especially France, has been to limit the advancement of technology in order to preserve the role of the worker, thereby limiting profits and productivity. This does preserve a more equal distribution of wealth, but it also limits economic growth and the creation of new wealth.

In America we have taken the opposite tract; we have allowed and encouraged the advancement of technology and productivity, but we have completely left the worker out of the loop and thus all of the rewards have gone to a relative few capital owners. This is why we find ourselves in an economic predicament today and until this fundamental problem is addressed the American economy is going to continue to suffer the problem of increasing productivity while the working classes aren't able to drive demand for goods because they have too little income.

There really is no reason why an economy in which productivity is increasing should have any type of recession. The only reason we are having economic problems is because the fruits of the labor of workers is not being paid to those workers, and because the fruits of capital ownership are not being shared by the population. Over the past 30 years the cost of education and skill acquisition has gone up dramatically. Worker knowledge and productivity has gone up dramatically, and mechanical efficiency has gone up dramatically. That all means that we can produce more with less effort today then we could in the past, and workers have been key to these4 advances, even shouldering the higher cost of education themselves, but there has been zero payoff to workers. All of the fruits of these advances over the past 30 has gone to capital owners, and capital ownership has remained largely consolidated in the hands of a small few. Thus, those small few have reaped the rewards that have been created by millions of workers in America and around the world.

But in order to continue to encourage economic development, we cannot turn to "job preservation" or "wage increases" as the solution to this theft from the working class. The only real solution is to enfranchise the working class with capital ownership, and that is why my proposition of a National Investment Program is the only solution that can address the future economic development of America.

The economic situation in America is very, very different than anything we have faced in the past.As Robert Reich correctly points out, we are now reaching the end of a series of stop gap measures that people have taken to deal with the phenomenon of stagnant wages and increasing productivity. Those steps are primarily the entry of women into the workforce, thereby increasing the number of income earners per household, the extended use of credit, and working longer hours. But we have reached the end of that road. Once all the women have entered the workforce, once we are all working the maximum number of hours that we can healthily sustain (we are already past that, hence some of our healthcare problems), and once we have maxed out our debts (which is the current problem) then there are no more stop gap measures to take. We have finally reached a tipping point in our economy where fundamental structural changes are required in order to continue economic progress and to prevent a long term economic decline and possible depression.

The key to remember is this. As long as productivity is increasing, there is no real reason why any economy should ever go into decline. The only reason for an economic decline during a period of increasing productivity is an improper distribution of the fruits of productivity, such that all of the fruits go to one small group, thereby leaving the other group unable to sustain or improve their standard of living, in spite of the increasing capacity of the economy to enable such progress.

The tools and techniques for extending economic growth in the American economy over the past 30 years are all used up now, they will not able to continue working any longer. Taxes have been cut over the past 30 years to the point that they can't be cut anymore. Interest rates have been lowered to the point that not only can they not be lowered any more, but increased lowering has now also become ineffectual. Workers have already done everything that they can to keep pace, aside from going back to increased working of children there isn't much more that families can do to improve their revenue streams. And now costs are rising, and will continue to rise for fundamental reasons. There is only one meaningful solution, and that is the broad distribution of ownership of capital.

Topic: Commentary
There are many instructive parallels between Hillary Clinton's campaign for the Democratic Party nomination and the Iraq War.

Like America invading Iraq, Hillary had all of the advantages on paper and all of the material advantages from the beginning, yet, those advantages were squandered with poor judgement and lack of planning.

Like the Bush and Cheney administration, Hillary went into this campaign with arrogance and assumptions that it would be a cake walk for her, only to find a strong insurgency that she was unprepared to fight against.

Like George Bush and Dick Cheney, as the failures have mounted she has continued to move the goal posts and blame others for her failures.

Like George Bush and Dick Cheney, she assembled a team of cronies and surrounded herself with loyalists and yes (wo)men who blinded her to reality and in whom she instilled so much fear that they were too afraid to actually exercise their best judgement if it contradicted her views.

Like the Bush and Cheney administrations, when things have not gone her way she has lashed out and attacked her critics and opponents.

Like George Bush and Dick Cheney, she has spread propaganda and lied in order to sell her agenda to the public.

Face the facts, Hillary Clinton had every advantage in the world going into this contest: name recognition, political ties, a national network of supporters, money, and a large head start in the campaign process. Yet, despite all of these advantages she has not just been beaten by a "superior speaker", she has been soundly out campaigned and out organized and out fund raised. Organizationally, she has done many things wrong, while Barack Obama has done many things not just right, but better than just about any political campaign in history. This in and of itself should speak to the leadership qualities of these two candidates.

How can Hillary be "ready to lead on day one" when she obviously wasn't even ready to lead her own campaign? If Obama is so lacking in substance, then why has he been able to materially out-organize her at every turn, despite having none of her advantages?

And now we get to the real issue. Now that Hillary has been backed into a corner her true self is coming out, the vicious attack dog and dirty underhanded politician.

Barack Obama was able to rise to his current standing in the race by the virtue of his own message. He didn't need to attack or insult Mrs. Clinton to make his case. However, now Hillary is not only willing to attack Barack Obama to make her case, but she clearly sees this as her primary strategy even though this is a primary campaign, knowing that her attacks do nothing but weaken the Democratic party and could potentially sabotage the election of the Democrats. John McCain doesn't even need to waste his time attacking Obama at this point; Hillary Clinton, from Obama's own party, is doing all of that work for him. But, John McCain is still attacking Obama as well, but instead of trying to do what is best for the party, which is to run a positive campaign so as not to diminish either Democratic candidate, Hillary is now essentially partnering with the Republican party to tear down the Democratic front runner! Hillary is now sacrificing her own party on the alter of her personal ambition. It is truly shameful.

Lets look specifically at some of the actions that the Hillary campaign has taken in recent days:

1) They fed a story to the press about Obama supposedly "plagiarizing" his own friend Deval Patrick - yet they claimed that they had nothing to do with launching this story.

2) Despite denouncing public financing for her campaign from the start, she is joining the Republicans in unfairly attack Barack Obama on campaign finance issues when he isn't even the nominee yet.

3) Has created a new front propaganda arm called the American Leadership Project (ALP) (kind of like the Project for a New American Century?) that is designed to "independently" attack Barack Obama.

4) Has created a propaganda website called The Delegate Hub, which supposedly "clarifies" the facts about the delegate count in the Democratic race. On this website the delegate numbers assume that the Michigan and Florida delegates will be seated, and a number of other distortions are made.

Look at her campaign, it is so reminiscent of the first term of the Bush administration. Her staff is fighting amongst itself, and I wouldn't be surprised to start seeing leaks against her coming out of her own campaign staff. Hillary Clinton is now doing more damage to the Democratic Party than the Republicans have been able to do in the past 30 years. If Hillary can't even wage a descent campaign with all of the advantages in the world, how on earth could she be expected to run the White House?

Topic: Commentary
It will be a sad day in American history if Hillary Clinton manages to get the nomination of the Democratic Party. Hillary has done her best to convince women that her campaign is an affirmation of feminism, but in reality her candidacy has nothing to do with feminism.

Unfortunately, millions of women have been convinced otherwise, and seem equally convinced that any opposition to her is an affront to all women and an affront to the feminist movement, and thus they will support her no matter what and they simply see the race as an issue of race vs gender.

The irony is that in this primary with the first major viable female and black presidential candidates, the contest is really nothing about race or gender, despite everyone's attempts to make it so, most notably Hillary herself.

The reality is that this is a primary campaign where the choice is not between a woman or an African American, but between one of the most secretive and manipulative political figures of the past 20 years in American politics vs. a new and inspirational natural born leader.

Hillary Clinton truly is the Dick Cheney of the Democratic Party, and the election of Hillary Clinton to president would be to simply put the yin to the Bush administrations yang into power. The election of Hillary Clinton would not be a rebuke of the Bush years, it would not make a change in American society and it certainly wouldn't change American politics. The election of Hillary Clinton would be ensuring at least four more years of Bush style leadership, with the exception that the agenda would be slightly different. The methods and approaches would be the same though.

Sure Hillary would not appoint judges to the Supreme Court that would be likely to overturn Roe vs. Wade, but what we can be sure of is that the nomination process would be virtually identical to the Bush nomination process, with the only exception being that the ideologies would be flipped.

Hillary, like Dick Cheney, has been one of the most secretive forces in American politics since 1992. Like Dick Cheney, she has worked behind the scenes, gone to great lengths to keep her activities secret, and has a history of strong arming those who disagree with her.

Let's look at all of the reasons not to elect Hillary Clinton:

1) Doing so would practically be a violation of the law on term limits. Certainly, though it may not violate the letter of the law it violates the spirit of the law. The intention of term limits is to prevent corruption and the building up of power through cronyism. Clearly, where it is Bill or Hillary officially at the helm, this principle is still violated.

2) There is no way that Bill Clinton will not enter back into a level of power and influence that no other president in American history has had after the end of his term. The whole issue of electing spouses simply sets a horrible precedent. It is bad enough that we have to deal with the political dynasties of parents and offspring, but now we also have to worry about husbands and wives as well?

3) Hillary has been very calculating from the time she was in the White House as first lady in terms of planning to capture the presidency. After her time as first lady, she then carpet bagged her way into New York because she knew that it was an influential place from which she could launch her bid at president. During her time as Senator she has been focused on building her personal political power and alliances, not doing the business of New Yorkers. She is among the top 10 earmarkers in the Senate. Why? Because she has been using earmarks, like all politicians do, do buy political support.

4) Hillary sets a horrible example for women and power. Instead of a woman who has clearly earned her place through the same type of hard work as her peers, Hillary is an example of using underhanded tactics and riding the coat tails of her husband to get to the top. Obviously she wouldn't be running for president today if her husband had never been president. This isn't really a feminist message at all.

5) In her pattern of secrecy she has refused to release her tax filings and also refused to release the documents from her time in the White House. In the process she avoids taking any responsibility for this, saying that it is Bill's decision, not hers.

6) She has pandered to lobbyists and corporations more than just about any political figure in the Senate. In her typical old school politics style, she has worked at trying to amass a base of power by pandering to the powerful. This is reflected in the manner is which she began with the most pledged super delegates as well.

7) Even now she is trying to change the rules of the game and work to seat delegates from states that at the outset everyone agreed would not be seated. I agree that this was a poor decision in the first place, but those were the rules that she agreed to from the start. Changing the rules now is simply one more example of her underhanded ways.

If Hillary Clinton gains the nomination of the Democratic Party, it will be through another Bush style assault on democracy. Having Hillary Clinton in office would be like four more years of Bush/Cheney, with the only exception being that it would be a Democratic version of Bush/Cheney.

Topic: Facts and Figures

First, I have to say congratulations to Barack Obama last night, it was a great victory and an amazing speech. They seem to get better every time.

Now on to business.

Almost a year ago I posted here about the inherent problems with bio-fuels, and recently major scientific studies have confirmed those fears.

The New York Times wrote about these studies in an article called Biofuels Deemed a Greenhouse Threat.

This article makes it clear that my previously voiced fears were well founded, and indeed it does appear that bio-fuels have unleashed a very ugly genie.

It seems clear from this article and these studies that essentially all bio-fuel production other than the relatively small production of bio-fuels from waste and possibly algae, should be stopped.

At the very least, any and all subsidies of bio-fuels should be terminated immediately.

The studies do point out that the sugar cane grown in Brazil is the only real potentially viable bio-fuel crop, but I wouldn't even consider that viable, because this sugar cane still causes land use problems by displacing farmland.

Growing crops for bio-fuel is simply not viable idea, and it is time that this practice is resolutely denounced by environmental groups, industry, activists, and government organizations.

At this point there are only two real groups who have any real interest in bio-fuels, and that is the farmers and industry that stand to profit, as well as the politicians who can use government subsidies to buy votes.

Any politician who supports government subsidies for growing bio-fuel should be absolutely denounced in unequivocal terms, because the only reason to support bio-fuel is to buy votes, and supporting bio-fuel is something that is ultimately harmful for everyone in the long run and it is having major and immediate negative impacts on the economy and on the environment.

Bio-fuel is driving up the price of food, it is driving subsistence farmers off their land, it is destroying forests,  and it is contributing rapidly to greenhouses gases and global warming.

There is basically almost nothing good about bio-fuel at all, unless you are a farmer who happens to be the one supplying it. And I don't begrudge the farmers the desire to make good money by supplying it, and I don't blame the farmers, but the fact is, that this is simply a really horrible product and a horrible movement, and it really needs to be stopped as soon as possible.

From the New York Times article:

"Almost all biofuels used today cause more greenhouse gas emissions than conventional fuels if the full emissions costs of producing these 'green' fuels are taken into account, two studies being published Thursday have concluded."

"The destruction of natural ecosystems — whether rain forest in the tropics or grasslands in South America — not only releases greenhouse gases into the atmosphere when they are burned and plowed, but also deprives the planet of natural sponges to absorb carbon emissions. Cropland also absorbs far less carbon than the rain forests or even scrubland that it replaces."

"In the wake of the new studies, a group of 10 of the United States’s most eminent ecologists and environmental biologists today sent a letter to President Bush and the speaker of the House, Nancy Pelosi, urging a reform of biofuels policies. 'We write to call your attention to recent research indicating that many anticipated biofuels will actually exacerbate global warming,' the letter said."

"But even with such restrictions in place, Dr. Searchinger’s study shows, the purchase of biofuels in Europe and the United States leads indirectly to the destruction of natural habitats far afield."

Please see my previous post on this subject from last March:

Against Bio-fuels 

Topic: Commentary
With the news that the economy isn't quite on track, the reaction from the Federal Reserve and the government is to cut the federal funds rate and to come out with some kind of government "stimulus package". Given the other economic conditions in the country, this is really just a sign of crack addiction.

This all goes back to core fundamental problems that have been discussed on this website for quite some time, and while it is true that economic fluctuations come and go, I think that this is really indicative of a much larger and longer term problem.

This really does go all the way back to the Reagan Revolution and the track that Reaganomics put this country on. That track is a track of major deficit spending, manufacturing off-shoring, and tax and interest rate cutting.

This country has been addicted to these things for 2 or 3 decades now, and its a situation that inevitably leads to problems, because growing an economy through tax cutting, borrowing money, and farming out work can't go on forever. At some point taxes can no longer be cut and the reduction of spending becomes a lack of investment in the future. At some point you can't borrow any more. At some point your income can't be generated without producing tangible goods, and likewise, at some point the gap between the enfranchised wealthy and the working classes becomes so great that the wealthy no longer find opportunity within their own country and their capital increasingly leaves the nation to seek out other opportunities. At some point the working class just can't afford to provide the profits to the wealthy anymore.

So, now, after having recently reduced interest rates to their lowest point in generations, the Fed finds that it needs to reduce them again. But where does it all stop? There never was any real "recovery" after 2001 in the first place. All that there was was another bubble created by massive borrowing, and now apparently the only medicine that the Fed can come up with is more of the same. But borrowing more doesn't help us. We are already in over our heads.

The Bush administration's plan, and those of pretty much every politician, involves simply borrowing more money from the federal government to give back to citizens, but what good does this do us really? Its like you realize one day that you are in over your head in debt and you can't pay your bills so you apply for another credit card. That is basically the only plan that the nation's best economists have come up with so far.

But what is the core of the problem here? The core of the problem is that taxes have been reduced too low on the wealthy for too long, capital ownership in America has become too concentrated in the hands of a small portion of the population, and the public has taken on massive debt essentially as a means of redistribution to the wealthy.

The federal government basically works for the corporations and the wealthy in America, it has done this in earnest since the Reagan era. The wealthy and corporations haven't been paying their way. They have been receiving more value from public resources than they have been paying. As a result, the public has gone massively into debt paying for the services that have primarily benefited the wealthy. The wealthy have realized real material gains and left the public institutions holding the bag. But that can't go on forever of course, and that's where we find ourselves today.

We have the largest gap between the rich and the middle class since just prior to the Great Depression. We have a higher debt to GDP ratio then just about any time in American history aside from during World War II. We have the lowest per-person savings rate since the Great Depression. And, we already have low taxes and low interest rates, which means that we really can't count on cutting those things to continue to help "aiding" the economy. The value of the dollar is falling, the price of internationally dominated resources are rising (namely oil, metals, and labor). A large number of Americans are getting ready to retire. Material American infrastructure is deteriorating and in need of major investment to maintain. And to top it all off we are still stuck in a seemingly endless war, which I don't think we will be honestly and fully out of for another 20 years. This war in the Iraq and Afghanistan is going to be a drain on the American economy for at least 10 years, if not longer, and the only way that it won't be a drain for longer is if we simply cut and run and leave the place in a mess.

My assessment is that 2008 will be the year that people look back on 20 years from now as the year that the long term decline of the American officially began. Of course there will always be ways to push the time back, but 2008 will be the clear demarcation. The only way out of this mess as far as I can see is major technological innovation, but unfortunately the American education system hasn't really put us in the position for that as well as we might want, nor is American society or the legal system really setup to make the right moves anyway, even if we had the technology.

The way I see it, America has absolutely squandered the opportunities of the past 20 years. We are the richest and most powerful country in the world, and even with that we have an overwhelming debt, we have a relatively poor education system, we have overpaid athletes and underpaid teachers. We have totally misplaced priorities, we've wasted trillions on the military, and the capital that wealthy Americans have amassed with the aid of the American public is fleeing the country, which, ironically, is kind of a good thing if it helps to improve foreign economies (not that it necessarily will).

And the kicker to all of this is that all the Republicans want to talk about is cutting taxes more. The dollar is falling and the markets are aborting largely because of the American debt. Cutting taxes while running a deficit, when you already have a massive outstanding balance, is not an option. And that is the predicament, and that is why the problem is as big as it is, because there simply is no easy way out. None of the tools that have been used to "stimulate" economic growth for the past 30 years can continue to work. We are now in a position where every move is a bad move. It's like Chinese handcuffs, where the more you wiggle the tighter they lock on.

As I said, certainly there are economic cycles, and certainly things will improve at some point, perhaps even shortly, but I think that we are looking at the beginning of a long term relative decline in the American economy at this point. This country has become addicted to debt, and right now the only solution being proposed is more of the same...

Topic: Semi-random Thoughts
Unfortunately it doesn't seem that any of the presidential candidates, even Obama and Edwards, have good ideas for economic reform in America. Having said that, here is what I would like to see done:

Healthcare Reform : The primary goal should be eliminating employer provided health insurance. The second goal should be universal or near universal basic care.

Tax Reform : Move to a single income taxation system, basically eliminating the discrepancy between wage, capital gains, and inheritance taxes. Also dramatically reform the income taxation rates. Increase tax collection to pay down debt.

Government Spending Reform : Completely eliminate the current earmark privileges. Reduce the military budget (after ending the war in Iraq). Fully adopt PayGo at the Federal level.

Trade Reform : Eliminate all tariffs. Require labor, environmental, and safety standards for trade with the US. Use fines for violations instead of tariffs. Open trade with every country in the world. Enforce standards on a per-trader basis, not per-country basis.

Social Security Reform : Change how benefits are calculated to use a combined median-wage and inflation index instead of the current average-wage index. Reduce the Social Security payroll tax by 1%.

Those are the basic policy positions I would take, but lets look at them a little more deeply.

Healthcare Reform

I really don't know why the Democrat haven't figured this out, but it is a shame that they haven't. Healthcare reform can be billed as, and can in fact be, the greatest pro-business move in America in 50 years. We have to get employers out from under the burden of providing health insurance. This is the single biggest selling point of a national healthcare system. By removing health insurance from employers this helps both employers and employees.

This would eliminate a huge burden from employers and it would make things much easier for employees. You would no longer need to worry about losing your health insurance if you lost your job, you wouldn't have to worry about health insurance when switching jobs. This is an opportunity for real tangible change that would make everyone's life easier, so I can't figure out why politicians haven't picked up on this. The current growing trend, and what several of the candidates are proposing, is mandatory health insurance. This is a horrible idea, it is the worst of all worlds, and the only reason that this approach is even being proposed is because the health insurance companies like it, of course. This is where Edwards is right, it doesn't seem that Obama has the backbone to stand up against these corporations. Mandatory coverage just puts even more strain on the employers to provide coverage and more strain on people who lose or switch jobs. Employers provided health insurance is horrible. It provides an incentive for employers to discriminate against good workers who have health problems, and it gives them an excuse to pry into employees personal lives. This is an abomination and must be gotten rid of.

The solution is a national health insurance system. This needs to be clear, we aren't talking about government run health care, but rather government run health insurance. In fact, I wouldn't even recommend a truly government run health insurance system either, but rather I would recommend a quasi-government system, where the government acted like a broker, to give government the ability to drive down prices and make demands, but keep the actual insurance in the actual insurance in the hands of private industry. Everyone's healthcare would be provided through the government, but would be held and run by the private insurer, just like it works now with employers. Your employer provides you the insurance, but they aren't the insurer. Same idea here, except the insurance is paid for via taxes, and is provided to everyone who pays taxes. There would still have to be a separate system to deal with people like the homeless, etc.

Tax Reform

The tax code needs to be simplified, no question there. The main reason it is complicated in the first place is due to corporate and special interests. Most of the deductions need to be simply eliminated, including things like the deduction for interest on a home mortgage, etc. Why should renters, generally poorer people, be subsiding the people who can afford to buy a house? It is popular, but it makes no sense. Eliminate deduction for dependents also. Why should without dependents subsidize those with dependants, typically children? Its basically a tax on being childless. There are many other much more complicated rules, most of which are popular, that also need to just be eliminated.

As a further simplification, eliminate the different types of income, and just have income. There are some valid arguments for the different classifications, but they are more trouble than they are worth. The Republicans have been wanting to get rid of the so-called "death-tax", the estate tax, then fine, let's get rid of it, and just count inheritance as normal income, problem solved (not the way they wanted to, but hey). Right now the wealthy a pay lower tax rate on capital-gains than they do on wage income, but the poor and middle class typically pay a higher tax rate on capital-gains than they do on wage income. This further skews investing in America to favor the wealthy.

After we simplify the code and simply count yearly income as income, next the tax brackets need to be radically overhauled.I have tinkered with taxation brackets several times, but here are my latest views. First we have to look at the current income tax brackets for 2007:

$0 - $7,825 - 10%
$7,825 - $31,850 - 15%
$31,850 - $77,100 - 25%
$77,100 - $160,850 - 28%
$160,850 - $349,700 - 33%
$349,700 and over - 35%

Keep in mind that these brackets are cumulative, i.e. we all pay only 10% on our first $7,825 of income, then 15% on our next portion of income, etc., thus what you actually pay is much less than simply looking at the percentage next to you yearly wage income.

The problem with these brackets is that they have way too much to do with low levels of income and don't address income at the really high levels. This was not typically the case in American history, when usually the tax brackets dealt most with the very high income levels.

What I propose is to eliminate most of the brackets at the bottom end and dramatically reduce taxes there, while adding many more brackets going up into the millions. Here is what I would propose:

$0-$30,000 - 0%
$30,001 - $100,000 - 10%
$100,001 - $300,000 - 15%
$300,001 - $500,000 - 20%
$500,001 - $1,000,000 - 25%
$1,000,001 - $3,000,000 - 30%
$3,000,001 - $5,000,000 - 35%
$5,000,001 - $10,000,000 - 40%
$10,000,001 - $50,000,000 - 45%
$50,000,001 and over - 50%

Some things to keep in mind here are that most people with an income under $30,000 today pay almost no income tax anyway, due to deductions. I would eliminate the deductions and just have these people file a simple form saying their total income was under $30,000 and move on with it. We waste tons of money dealing with the nonsense in this tax bracket, and usually it ends up that they pay no taxes anyway, but why waste time with the filing and processing instead of just calling it a simple zero?

The numbers are a little hard to compare since I would eliminate many tax deductions, but generally this would be a tax cut for everyone with an income under half a million. The average income tax rate actually paid by those in the top 1% in 2006 was 19.4, per the Congressional a Budget Office (see blog post from Dec. 18th below).

The percentages I provide here would be much closer to what would really be being paid, whereas due to deductions the current percentages greatly overstate the payments in those brackets.

Keep in mind also that under the current income tax system these percentages are applied only to wage income. Under my system these percentages would be applied to ALL income, including inheritance and capital gains. This means that capital gains for people with an income under roughly $500,000 a year would be taxed less than they are now. For people over that level of income they would essentially be taxed more.

Adjustments to these numbers would have to be made to ensure that enough taxes were being collected. Tax revenue would generally have to be increased over current revenue in order to, combined with cutting spending, be able to operate without a deficit and pay down the debt.

Government Spending Reform

The biggest and most direct spending reform would be the complete adoption of PayGo, where any bill that cuts tax revenue or that incurs a cost must pay for that cost in the same bill. Congress has already adopted PayGo, this was done in 1990, but the Republican controlled congress, under the leadership of Tom Delay, then developed ways to work around the PayGo rules. These ways need to be removed and PayGo needs to become solidly enforced again.

In addition to this, earmarks need to be completely eliminated as they currently are. There were $29 billion worth of earmarks in 2006, for projects considered to be unnecessary "Pork" projects. In 2007, under the Democratic Congress, that number dropped to $13.2 billion, but this is still way too high. There could perhaps still be some earmarking system, but not the current system whereby individuals can add earmarks on their own without any review, to an already established bill. At the very least a committee should be setup to review earmark proposals before they can be added, or a whole new process should be setup for the funding of projects of interest to a given state. I would perhaps favor a standing 6 person bipartisan committee, with an additional 7th person that has to be a Congressman from the same state as the Congressman requesting the earmark. This committee would review and approve earmarks before adding them to current bills. The committee would have to support the earmark by a simple majority.

Trade Reform

Trade is the area where America interacts most with the world, and this is greatly overlooked as one of our greatest public relations tools. Firstly, I do favor free-trade, but I also favor-fair trade and safe-trade and think that these things are immensely important for addressing everything from terrorism to global warming to immigration.

Firstly we should stop, as well as we can (this depends on cooperation as well), from dealing with countries and start dealing directly with corporations. There are many advantages to this, though it also can make things more complicated. When we negotiate trade deals at the national level to reward and penalize companies for things that they aren't directly responsible for, and also this drives companies to move around from country to country based on trade deals, but there is no need for all that, and its a waste of resources and everything else.

We should very simply come up with one set of rules, any anyone who wants access to American markets has to follow those rules. As long as you follow the rules then you get free and unfettered access to the American markets, no tariffs. If you don't follow the rules you can be fined or, if the infraction is bad enough, barred.

The biggest problem with tariffs is that they punish the wrong people. Tariffs typically drive down wages in the country of origin, because in order to stay competitive while still paying the tariff it gives an incentive to pay workers less. This is the opposite of what we should be doing. What we should do instead is require compliance with a given set of pollution regulations, minimum wage, and employee rights. These rules would be the same for everyone. If you can't obey the rules then you pay a fine or are barred. This would move what is currently being paid in tariffs to the US into wages and improved working conditions in the home country, which would in turn also eventually open up more foreign markets for American companies as well, without adversely affecting consumer prices in America. At the same time, it would reward good corporate stewards for being good stewards no matter where they are. This would help to foster better relations with places like Iran and even perhaps Cuba, which could be opened up to trade as long and the proper conditions were met and of course as long as the home country allowed it. This would do more to promote progress and democracy than shutting off interaction with such places as we do today.

Likewise, poor stewards in good countries would be penalized more than what they are now or instead of simply relying on the home country to penalize them. There may be problems getting other countries to agree with these terms, that would remain to be seen, but basically any country that didn't agree would simply still be under a tariff. Regardless, we should work towards removing all tariffs and breaking down the barrier to trade, while at the same time focusing much more on ensuring the quality and fairness of that trade.

Social Security Reform

I have written about Social Security several times on this website and already covered what really needs to be done with it here:

Getting a grip on Social Security: The flaw in the system

Basically, Social Security is really not that bad off and with just a minor adjustment can easily be made solvent. In fact, with the minor adjustment so much money will be saved that it would be possible to reduce the Social Security tax, making it effectively another tax break for the middle class.

All that really needs to be done is to stop using average wage indexing. I think a good way to do would be to use a combined median-wage and inflation index instead. This would currently reduce the rate at which Social Security payment would be projected to increase. Some people complain about this, but there is no need for complaint. Currently Social Security payments are scheduled to increase dramatically above the rate of inflation, so people 30 or 40 years from now are schedule to get as much as 40% more per paycheck, after adjustment for inflation, than people today. This really makes no sense. Why should people in the future be getting paid more than people today? There is no reason why, and it wasn't even understood that this would happen the way that it has when the legislation was passed, because what has happened is that since wage discrepancy has dramatically increased over the past 20 years, the average wage has gone up much higher than the median wage, yet, the people making the high wages in the top 1% that are pulling that average wage up are not paying Social Security taxes on those wages. Thus, the poor and middle class are having to pay for increasingly higher payments even though their wages aren't going up. This is a hugely unfair tax on the middle class, and its really unnecessary.

Conclusion

I think that these economic reforms would strengthen the American economy, simplify the tax system, be more fair, and help the poor and middle class, while not harming American businesses, indeed the overall effect would be beneficial to business.