tag:blogger.com,1999:blog-41239868406309269932024-03-13T12:06:59.959-06:00Mental DetritusA place for me to talk about whatever happens to be floating through my mind.John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.comBlogger124125tag:blogger.com,1999:blog-4123986840630926993.post-64661668463766570392011-05-24T20:24:00.003-06:002011-05-25T18:24:22.335-06:00St. Louis Good Friday Tornado Update<p>As we watch tornadoes flatten Joplin Missouri, Oklahoma City, and now the Joplin area again, St. Louis county is still recovering from its own EF4 tornado a month later. That tornado tore through several municipalities, destroying thousands of homes, hundreds of businesses and doing severe damage to Lambert International Airport.</p>
<p>Tuesday, May 24, Congressman Clay hosted a telephonic town hall along with Libby Turner from FEMA, Mark Randall from the SBA and the mayors from three of the cities hardest hit Maryland Heights, Berkeley and Bridgeton: Mike Moeller, Kyra Watson, and Conrad Bowers. They gave updates on the recovery efforts and took select questions from the thousand or so callers.</p>
<p>The FEMA and SBA representatives started out by giving information about how to request assistance. The most important points, for those seeking assistance, is to contact FEMA to begin your application for assistance, details of which can be found on their website at <a href="http://www.fema.gov/assistance/index.shtm">http://www.fema.gov/assistance/index.shtm</a>, by phone 800-621-FEMA, or their mobile site <a href="http://m.fema.gov">http://m.fema.gov</a>. From there, they will send you paperwork to apply for grants from FEMA for everything from housing and personal loss to medical and funeral assistance. Also, they will send you applications for very low rate SBA loans to assist you in ways FEMA is not allowed to such as deductible coverage. In response to a question from the Post Dispatch's media representative, Lisa Brown, Ms. Turner and Mr. Randall explained that $610,000 in grants have been approved and over 600 SBA loan applications have been processed for homeowners and many area businesses.</p>
<p>The mayors then discussed the current status of the recovery. In the three municipalities represented, more than 1100 residences have been damaged, about ten percent of those flattened or in other ways left unlivable. Bridgeton alone has spent about $2.5 million on the recovery effort. All the mayor praised the volunteers and aid, both from other municipalities in the area and numerous private aid organizations. "FEMA cooperation has been outstanding," Moeller said. More volunteers are still needed, as clean up is expected to continue throughout the summer according to Mayor Watson.</p>
<p>During the question in answer session that came next, many of these details were expanded upon and a number of other issues were brought out. A Ms. Booker and another caller, Arlene, asked why the government is giving those in need loans when they really don't need to take on more debt. Ms. Turner explained that FEMA only offers grants, potentially totaling up to $30,200 while the SBA offers loans and works very hard with the home owner to make the terms as generous as possible, including rates as low as 2.68% and repayment plans as long as 30 years.</p>
<p>In response to one caller's thank you, Rep. Clay responded saying such actions are what government is supposed to do in such times of disaster. But when I asked what the government is doing to prepare for more and more frequent disasters like this, FEMA's first response was that they rely on a prepared citizenry, highlighting <a href="http://www.ready.gov/">http://www.ready.gov/</a>. Turner also highlighted national exercises that FEMA, state, and local emergency responders do to practice their response.</p>
<p>I find it telling that Ms. Turner's first response to "how is the government preparing?" is to say that people need to just prepare themselves. How is a family of four supposed to prepare for their home being hit by an EF5 tornado? How is a city supposed to prepare for a magnitude 9.0 earthquake like Japan faced. As Rep. Clay said, this is what government is for. Yet Republicans in the legislature feel they need to cut programs in order to pay for recovery efforts in Joplin. We are not a nation who says, "We can't help you unless we take money away from these people over here." We aren't a nation that says, "You'd better take care of yourself." We used to be a nation that cared for our neighbors, next door or across the country.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com6tag:blogger.com,1999:blog-4123986840630926993.post-29226760260867843912011-03-09T22:05:00.004-06:002011-03-09T22:23:33.163-06:00@daveweigel Wins the Journalism #FAIL of the Day<p>Dave Weigel is a journalist I generally respect. I don't always agree with him politically, but he is generally honest and often witty. However, today, in what I'm not sure whether it was a failed attempt at wittiness or just a #fail, he attempted to compare two things that couldn't be more different. Whether or not it was an attempt at humor, many others at all levels on the right are saying this.</p>
<p>In a tweet today he said "<a href="https://twitter.com/daveweigel/status/45642273962196992">Well, passing an unpopular bill over waves of protests worked for Democrats in 2010. Right? Right?</a>" and defended the comparison in a couple further tweets. In so doing he compared a law where more than 30% of people didn't support it because it should have done more (myself included), 40% supported it and about 25% were totally against it to one where a plurality of Wisconsinites are flat out against the bill; saying it should not exist in any form.</p>
<p>If this were the only problem with his false equivalence, I would just hit him with a tweet or two on Twitter, but that's only the start. President Obama, Senator McCain, Secretary of State Clinton, and John Edwards (among many others) debated the health care law for almost two years before it there was ever presented to a Congressional committee. Governor Walker, on the other hand, made one mention of changing collective bargaining rights during his entire campaign.</p>
<p>Then there was the legislative fight itself. For health care reform, the entire debate took nearly a year between the myriad committees, several floor debates, hundreds of amendments from both sides and incessant public input. Gov. Walker would hear of no amendments, even from his own party. By his own (tricked) admission, he wouldn't negotiate or even meet with the opposition until after his bill was passed. And just today passed a completely modified bill that few, if any, legislators have had the chance to read in the <strong>TWO HOURS</strong> from when it was put forward to when it was passed (and it still hasn't been released to the public to my knowledge).</p>
<p>While I believe Mr. Weigel is against Gov. Walker's union busting, it is outrageous false equivalencies like this that seriously damage the ability of reasonable people to have real discussions about what's going on in our country. Some times there are no comparably wrong (or right) things done by the other side. There is no comparison to people going armed to presidential events wearing a shirt saying "The tree of liberty must be watered with the blood of patriots." There is no honest "other side" to saying we shouldn't threaten or encourage the threatening of political opponents' lives. And there is no act that any modern Democratic has done that compares in any way to what Governor Walker and those 18 Republican state senators did today.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com1tag:blogger.com,1999:blog-4123986840630926993.post-88068536309022457132011-01-09T10:20:00.006-06:002011-01-09T11:15:19.720-06:00Words Have Power<p>Yesterday, a United States Congresswoman, Rep. Gabrielle Giffords, was shot along with about nineteen other people, six of whom have died. The shooter, who's name I will not mention in order to not bring him any more publicity than he deserves, walked through a crowd of Rep. Giffords's constituents to shoot her point blank in the face and then fired randomly into the crowd. There is no other word for such a brazen act than attempted political assassination.</p>
<p>Such acts of politically inspired terrorism have been growing in recent years: <a href="https://www.nytimes.com/2010/02/19/us/19crash.html">people have flown planes into government buildings</a>, <a href="http://www.huffingtonpost.com/2009/04/04/police-several-pa-officer_n_183130.html">others have shot police officers in fear of an oncoming "Obama gun ban"</a>, not to mention the dozens of people who have been arrested on their way to attempt to kill President Obama. Then there's the increase in <a href="http://articles.cnn.com/2010-03-30/opinion/avlon.hatriots.militia_1_militia-anti-government-death-threats?_s=PM:OPINION">anti-government militia activity</a> and other politically driven violence and intimidation that hasn't risen to the level of killing throughout the country: brandishing weapons or saying "<a href="http://www.allbusiness.com/government/elections-politics-politics-political-parties/14313191-1.html">I didn't come armed... this time</a>" at political rallies, <a href="http://www.huffingtonpost.com/2010/03/22/bricks-shatter-windows-at_n_508117.html">campaign offices vandalized</a>, <a href="https://www.nytimes.com/2010/03/26/us/politics/26threat.html?src=me">shot up (including Rep. Giffords's)</a>, or <a href="http://blogs.riverfronttimes.com/dailyrft/2010/08/man_arrested_for_firebombing_russ_carnahans_campaign_office.php">firebombed</a>.</p>
<p>These things aren't happening in a vacuum. Throughout the country, especially on the Right, violence and violent rhetoric is not just accepted, but becoming rewarded by increased air time and multi-million dollar contracts. Senate candidates can say that if voters don't get their way they should employ "<a href="http://www.huffingtonpost.com/2010/06/16/sharron-angle-floated-2nd_n_614003.html">Second Amendment remedies</a>" and come within 40,000 votes of winning. Other Congressional representatives can say they want their constituents "<a href="http://thinkprogress.org/2009/03/23/bachmann-armed-and-dangerous/">armed and dangerous</a>" against the government, and yet be accepted saying we need to root out those in government who are "anti-American". Using <a href="http://chattahbox.com/images/2010/03/palin_crosshairs_map.jpg">cross-hairs</a>, <a href="http://tpmdc.talkingpointsmemo.com/2011/01/flashback-giffords-opponent-had-m16-shooting-event-help-remove-gabrielle-giffords-from-office.php">shooting</a> and other similar rhetoric to talk about defeating your political opponents is becoming commonplace.</p>
<p>It is this violent rhetoric, and the main stream media's happy acceptance and encouragement of it, that creates people like the one that attempted to kill Rep. Giffords and did kill a 9 year old girl. When people are told "<a href="http://blogs.desmoinesregister.com/dmr/index.php/2009/08/12/grassley-i-understand-fear-that-government-could-kill-grandma/">So-and-so wants to kill your grandma</a>," or "My opponent is a Nazi," or "<a href="http://www.huffingtonpost.com/2009/09/30/alan-grayson-republicans_n_303996.html">These people want you to die quickly</a>," how do you expect people to react. You can't say "Barack Obama is a terrorist," and minutes later "We need to go out and kill all terrorists," and not expect people to put the two together. Saying we have to defend our country to the death, and then turning around and saying one party or the other is trying to destroy our country is only going to lead to more of this.</p>
<p>And this can backfire both ways. Those on the right don't, I hope, want people to use guns to get their way, but their supporters see the acceptance such rhetoric gets and may think it's acceptable. Meanwhile, those others who are being targeted, or feel targeted may feel they need to defend themselves from the perceived threat and act violently preemptively. I fear that especially after this heinous act that there will be both copy-cat attacks and retaliations that would make the blood fued in Romeo and Juliet look tame.</p>
<p>We all, on both sides, need to turn down the rhetoric. Republicans don't want you to die quickly if you don't have insurance, they want you to deal with it yourself and leave them out of it. Democrats don't want to destroy our country by ensuring everyone has access to health care, they want to make even the weakest among us stronger. We may have different visions of where our country should go, but neither wants to harm the country. We can disagree, even fight vocally about these differences without being violent or hateful toward each other.</p>
<p>We have to stop the hate, or soon we won't have a country to defend.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com0tag:blogger.com,1999:blog-4123986840630926993.post-20653399123417003512010-09-09T09:32:00.004-06:002010-09-09T13:31:31.679-06:00Why a Payroll Tax "Holiday" Is Such a Bad Idea<p>Lately you may be hearing lots of people from the Right and even some advisors to former President Clinton such as Robert Reich and Laura Tyson proposing a payroll tax holiday in order to boost hiring. I do not believe, based on the evidence I've seen, that this will have the effect they claim yet it will have severe repercussions damaging institutions that millions of Americans rely on. It is also somewhat telling that the Clinton era economists that came up with the idea of killing <a href="http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Act">Glass-Steagall</a> are the ones proposing this.</p>
<h2>Some Quick Background</h2>
<p>On every paycheck you receive, you will see some <a href="http://taxes.about.com/od/payroll/qt/payroll_basics.htm">tax deductions</a>: federal income tax, state income tax, maybe a municipality or county tax, Social Security and Medicare. It's those last two that make up your portion of payroll taxes also known as FICA taxes. Your employer (if you're not self employed) also pays an equal amount of Social Security and Medicare taxes for you. This adds up to 7.65% of your income below $90,000.</p>
<p>This money is then used to fund current beneficiaries of these systems with the promise that future workers will pay for you to collect benefits. Most years, the <a href="http://www.ssa.gov/history/trustfunds.html">money being paid in is more than what is paid out to beneficiaries</a> so the money is saved (in treasury bonds for the most part) in order to pay out in worse years. Unfortunately, as I'm sure you've heard, more workers are due to retire in the next several years than new workers entering the workforce. Also, during the current recession, more people are taking early retirement and fewer people are working, which has caused the Social Security Administration to pay out more this past year than it took in. Overall though, it is projected that the trust fund will be able to afford full benefits for at least the next 25-30 years.</p>
<p>Medicare on the other hand is not in quite as good a shape. Health care costs have been rising quickly and again the ratio of workforce to beneficiaries has been steadily shrinking. This has left the <a href="https://www.cms.gov/ReportsTrustFunds/downloads/tr2010.pdf">Medicare trust fund</a> (PDF) at about 1/7th the size of Social Security.</p>
<h2>What a Payroll Tax Holiday Will Mean for Business</h2>
<p>Currently, the <a href="http://pubdb3.census.gov/macro/032006/perinc/new03_001.htm">average worker earns about $32,000 a year</a> which means each business pays less than $2,500 per worker per year in payroll taxes. Just to equal the salary of a minimum wage worker (a little more than $15,000 per year), it would take more than six other employees' payroll taxes. It would take 13-14 employees' payroll taxes to equal a new average worker. That new employee would also require training and time to get up to speed in the new job, not to mention any other benefits the company offers. Then in a year or so, when the "holiday" expires, that average employee will suddenly cost almost $35,000 and all the other employees start to cost $2,500 more as well.</p>
<h2>What a Payroll Tax Holiday Will Mean for Workers</h2>
<p>In general, most workers won't immediately notice anything. Depending on how it's done, workers may see those FICA deductions no longer in their paycheck, giving them an extra $2,500 per year, but most plans that I've heard about only discuss the holiday in terms of removing it on businesses, since the intent is to get them hiring. However, long term, workers will see significant harm. A retiree's benefits are based on how much they paid into the system and how long they paid. Remove a couple years' payments in and most workers will see a significant drop in projected benefits, <a href="http://www.urban.org/publications/412169.html">ask any woman who has taken an extended maternity leave</a>. Add this on top of the 30-50% drop most people have seen in their invested retirement funds and the drop in home values and you have a significant portion of the population unable to afford retirement, even at 70 or 75.</p>
<h2>What a Payroll Tax Holiday Will Mean for Social Security and Medicare</h2>
<p>Put simply, these already strained systems may collapse. Unless the funding is replaced by government spending, Medicare could lose $250-500 billion, nearly or completely bankrupting it (their current trust fund is $381 billion). Social Security has a bit more of a cushion, but it too would lose $400-800 billion. This could shave five or more years off of it's trust fund easily. If someone wanted to kill these programs, I can not think of an easier way.</p>
<h2>What Would Most Likely Happen</h2>
<p>I want to preface this by saying I am not an economist and have nothing on Reich or Krugman when it comes to big economic questions (I'm happy when I can keep my own budget in order). But I can look at what people have done and have been doing and put two and two together. Right now, people aren't buying: many don't have jobs, many more are afraid of losing their job and other have lost sometimes considerable wealth when their home value plummeted and credit dried up. This means companies aren't selling as many products and so don't need as many people on their factory floors or behind their cash registers. If a payroll tax comes through, companies will have more money, but they still won't be selling products and so still won't need workers. Thus, as they have already been doing, most corporations will instead pay their CEOs bonuses for "earning" the company more money and wealthy investors will get a dividend. Meanwhile, unemployment will hardly be affected and workers retirement funds will get that much smaller.</p>
<h2>What Should Be Done</h2>
<p>As I said above, the problem companies are facing is a demand problem. Same store sales have fallen or are flat for most retailers. Home prices are still falling. 50% more businesses rate sales as the most important problem than any other issue, including taxes. What we have is a catch-22: businesses won't hire because they aren't getting sales, consumers aren't buying because the job market is in the toilet. The thing that will get the most companies hiring again is increasing demand and the only organization willing or capable of doing so is the federal government. This has already been started and had great effect, but what was done was too small for the pit we were put in. When $2-4 trillion worth of wealth has been destroyed, spending $300 billion a year isn't going to replace the demand lost.</p>
<p>Obama has proposed some things that will lead to increasing demand: tax credits for business investments will get companies buying equipment (unlike employees, equipment doesn't cost more each year) increasing demand and creating jobs for equipment manufacturers. A $50 billion infrastructure investment fund, while small, will put people back to work directly and as proposed will pull in private investment, getting money moving again. Tax credits directly related to new hires are already working.</p>
<p>There are ways, both with <em>targeted</em> tax policy and direct government spending to increase hiring. The stimulus act was able to create at least three million jobs (or at least prevent people from getting fired, like police and teachers). But it can't be done with half measures by people who are afraid of a bunch of self absorbed know-nothings.</p>
<p>Congress, get out there and do your job. Go big or go home.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com1tag:blogger.com,1999:blog-4123986840630926993.post-39272842430477015742010-05-14T09:40:00.004-06:002010-05-14T13:54:38.284-06:00The Myth of the Placebo "Effect"<p>Thursday, May 12, NPR carried a story on their Talk of the Nation program about the placebo effect, and more specifically, <a href="http://www.npr.org/templates/story/story.php?storyId=126802142">using placebos as medical treatments</a>. While they mentioned the ethical concerns in passing, I was really disappointed that they presented a largely unskeptical view of such practice. It also showed a completely lack of understanding about what the placebo effect really is, further perpetuating a lie that has been used to support some quite dangerous practices.</p>
<p>A little quick background, placebo treatments are treatments that have no active ingredients. Often in drug trials this is the classic sugar pill: a pill made to look exactly like the actual drug, but with the active ingredients replaced with sugar or other inactive ingredients. In a trial, participants are split into two (or more) groups, with one given the active drug, and the other the sugar pill. After a period of time, participants symptoms are measured and they are given a brief survey asking them to detail how they feel about the symptoms being studied and whether they thought they were on the placebo or the real thing. Then, in a perfect world, the results of the study group is compared to the results of the placebo group and, if the drug is statistically equal, or worse, than the placebo it doesn't go to market.</p>
<p>The name "placebo effect", and the reason for the placebo based control at all, stems from the fact that the mere act of treating someone can appear to cause an improvement in the treated condition, whether or not the drug itself is having the effect. The important thing to realize is that <em>appearance</em> is largely all it is; the drug or other studied treatment itself is not having the effect, the effect, if there is one, is happening due to some other cause. By introducing a placebo (and proper blinding) to the study, you are able to remove the act of treating as a possible cause for the effect. The "placebo effect" is just the name applied to these other, untracked causes.</p>
<p>This brings me to my problem with the Talk of the Nation story itself. They treated the placebo itself, this empty sugar pill, as a cause itself, as opposed to a control stand-in for the untracked (or untrackable) variables in these clinical trials. This is an easy mistake to make, and one that human brains are evolutionarily developed to encourage. Back in the day, it was safer to think a pattern of shadows was a tiger and be wrong than to see a tiger and think it was a pattern of shadows. These days, it's a fun thing to be able to see fish and dragons in clouds or to see the face of Jesus on a potato chip, but it can cause issues when we see patterns in data that aren't real.</p>
<p>Specifically, the doctors interviewed by Jennifer Ludden made two critical mistakes in describing what is happening in placebo controlled studies. The first is confusing correlation and causation, or making the assumption that because effect x happened after doing action y, y must have made x happen. A simplistic example of this (stolen from Fraggle Rock) is to imagine a person who saw a group open umbrellas, and then felt it start raining. That person could believe that opening those umbrellas caused the rain. The same thing happens with medicine: People see a doctor, receive a treatment, or take a pill (or goes to their local faith healer); their illness goes away; thus whatever they did fixed their illness, ignoring anything else that may have also happened.</p>
<p>Well controlled trials limit or eliminate many of these variables so that only one thing, the drug or treatment, is being studied. The placebo is just one of those controlling mechanisms, removing such variables as doctor attention, the comfort and stress relief of being treated and many other environmental factors. It also helps to control for the body's natural ability to heal, even (rarely) from the most serious illnesses. This is true because in theory, the same number of people receiving both the real treatment and the placebo will have these externally caused effects. Thus if you give a fake treatment to 100 people, and a real treatment to 100 people, and 25 people from the fake treatment group get better, but 50 from the real treatment group get better, you have good reason to believe that the extra 25 people got better because of the treatment itself, not from shared causes.</p>
<p>The other common, related mistake, which Dr. Arthur Barsky touched on very briefly in the interview, is what is known as selection bias. This effect is manifested by people expecting things to happen, so when it does happen, they notice it more. An example of this is the "<a href="http://www.ncbi.nlm.nih.gov/pubmed/8924138">full moon myth</a>" in hospitals. The myth goes that on nights with full moons, there are more injuries admitted to hospitals. This gets reinforced to hospital workers because on some nights, the number of admittances either is, or feels, higher, and when they look outside they see the full moon. Other nights when the volume is high, but there is no full moon, they don't think about, but they remember the nights that confirm the myth because they're told to expect that. If you remove this expectation, and look at the statistics, no such pattern is shown.</p>
<p>The same thing happens with medical treatments. People <em>expect</em> a treatment to have an effect. Thus, when someone is on a drug and feel the illness subside, they attribute it to the medicine. If a their symptoms get worse, a they just say "oh, it's a bad day" or the like; conversely if the symptoms get better while off the medication, they just feel lucky or attribute it to lingering effects of the medication. The change in symptom severity could be completely random, but it's attributed to the treatment because it's expected that the treatment would help with the symptoms.</p>
<p>In the same way, you notice such variation more because you're asked to pay more attention to it. Using chronic pain as an example, day to day, the severity of such pain varies. While a victim of the pain may notice strong differences, mild changes in pain go largely unnoticed. When they go on a treatment however, they are often asked to rate their pain level on a daily, if not more frequent, basis. This forces them to pay attention to even small changes that they would not have noticed before. This aspect is highlighted by the fact noted by Dr. Barsky that 25% of study subjects on placebo report side effects. Taking a sugar pill doesn't <em>make</em> you feel more tired or nauseous, but when you feel tired or nauseous while taking a sugar pill, you notice it more because you're expecting a side effect. This is another variable that properly blinded placebos are supposed to control for because with or without active treatment, this effect will still happen.</p>
<p>Another pair of issues that cloud medical studies, especially of subjective ailments, and is controlled by placebos is both the natural desire to help others and the desire to get something for your actions. The first is a problem because people might over-report the benefits of a treatment because they believe the doctor worked hard to help them. You may rate your pain somewhere between a 5 and a 7, but if you think the doctor tried hard to help you, you'd rate it at a 5, but if you got no aid or your doctor acted distant or uninterested, you'd rate a 7. This isn't a conscious choice (in most cases), but it will affect overall scoring. Similarly, if you are very involved in something (for example a long term diet/exercise regimen) or you pay a lot for something you feel you deserve more out of it whereas if you did not have to invest much time, effort or money (for example, sitting and watching a video), you wouldn't feel as invested in the treatment.</p>
<p>None of the above is to say that the variables a placebo controls for have no actual effect. I do not know any scientist or physician who would not say spending more time with a patient is a good thing (insurance companies on the other hand...). However, it does say that just the act of prescribing a placebo is not a substitution for real treatment. The placebo itself, sugar pill, acupuncture, faith healing, etc. has no effect in and of itself. It is only a stand in for many variables that are not tested. It is one, or many, of those unnamed, untracked variables that is having the effect, not the placebo itself. Don't replace that active cause with the inactive placebo; you short-change your patient and yourself.</p>
<p>NPR, I strongly recommend you get an alternate view on this. A set of doctors I know would be willing to speak with you are the ones that run <a href="http://www.sciencebasedmedicine.org/?page_id=779">Science Based Medicine</a>, specifically Dr. Stephen Novella. For further reading see <a href="http://www.sciencebasedmedicine.org/?p=4304">Science Based Medicine's coverage of the placebo effect</a>. Also a great listing of <a href="http://www.theskepticsguide.org/resources/logicalfallacies.aspx">common logical fallacies</a> to watch for.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com1tag:blogger.com,1999:blog-4123986840630926993.post-67358870021941067002010-04-15T08:41:00.003-06:002010-04-15T10:02:21.864-06:00Tax Day Myths Debunked<p>It's that day again. The day when people who actually care about a functioning government pay their taxes and self proclaimed "patriots" walk around in silly costumes protesting that their taxes are too high, even after receiving tax cuts over the past year. They do this, in part, because they believe the lies and misdirection given to them by those who would manipulate them and echoed by the uncaring news media outlets.</p>
<h4>1) "<a href="http://www.google.com/search?q=47%25+of+Americans+pay+no+federal+income+tax.&hl=en&source=univ&tbs=nws:1&tbo=u&ei=ODHHS-yNL4j2NdGggNQI&sa=X&oi=news_group&ct=title&resnum=1&ved=0CBEQsQQwAA">47% of Americans pay no federal income tax.</a>"</h4>
<p>While this statement, word for word, is factually true, it is incredibly misleading. The key word in this phrase is "<strong>federal income</strong> tax." Federal income tax is only one of many taxes people pay: there are also payroll taxes, state and local income taxes, property taxes, and sales taxes. Payroll and sales taxes are much more regressive than income taxes and are designed so that lower income earners pay more, as a percent of income, than higher income earners. If you <a href="http://www.ctj.org/html/whopays.htm">include all taxes paid</a>, the United States already has a largely flat, non-progressive tax system: the lowest earners pay about 14-15% of income, and the highest earners pay about 15-16% of their income.</p>
<h4>2) "<a href="http://www.ntu.org/tax-basics/who-pays-income-taxes.html">The top 10% of earners pay 71% of federal income tax revenue</a>."</h4>
<p>Again, while roughly accurate, this is even more misleading than the first myth. The problem with this myth is that it assumes income is even distributed across earners. Instead, the <a href="http://www.nytimes.com/2007/03/29/business/29tax.html">reality</a> is that the top <strong>one tenth of one percent</strong> of Americans earned as much as the entire bottom 50% of Americans. Let me repeat that: 300,000 Americans earns as much as 150,000,000 Americans. And those numbers are based on only what the IRS can actually capture, which it admits is about 70% of income from investments. So when you hear the top 10% pay a large chunk of income returns, remember that that is actually a <strong>low</strong> compared to the actual income disparities. </p>
<h4>3) "<a href="http://www.google.com/search?q=Democrats+are+raising+taxes&hl=en&sa=G&tbo=u&source=univ&tbs=nws:1&ei=KjfHS-HRHpLOM-acqMwI&oi=news_group&ct=title&resnum=4&ved=0CFsQsQQwAw">Democrats are raising taxes</a>."</h4>
<p>This is abjectly false. In 2009, the average tax <a href="http://www.whitehouse.gov/blog/2010/04/14/tax-day-another-look-presidents-relief-middle-class-families">refund was 10% higher than 2008</a>. Between the "Making Work Pay" tax credit ($300-500/person), the first time home buyer tax credit (about $8000), the various greening tax credits (insulation, windows, etc.) and many others, taxes have been cut significantly. This was done for the express purpose of increasing money on hand as part of the federal stimulus program.</p>
<p>If you have any more myths you'd like me to tackle, add them in the comments.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com0tag:blogger.com,1999:blog-4123986840630926993.post-49070536124068363712010-03-26T09:28:00.004-06:002010-03-26T13:38:28.175-06:00Political Spectrum<p>Since last week, political violence reacting against the now law health care reform has been escalating to dangerous levels. This past weekend, bricks were thrown through office windows for Congresswomen <a href="http://www.buffalonews.com/2010/03/24/997471/slaughter-vandalism-is-fourth.html">Slaughter</a>(NY) and <a href="http://www.tucsonweekly.com/TheRange/archives/2010/03/24/smash-sensation-congresswoman-gabrielle-giffords-isnt-the-only-one-with-broken-windows">Giffords</a> (AZ) and DNC offices in New York and <a href="http://www.kake.com/news/headlines/88832782.html">Kansas</a>. In DC, racial and homophobic slurs were hurled at Congressmen as they attempted to enter the Capitol. This week, death threats have become endemic. <a href="http://www.twincities.com/localnews/ci_14760664?nclick_check=1">Gas soaked torn up flags</a>, <a href="http://www.cbsnews.com/8301-503544_162-20001197-503544.html">unknown, possibly hazardous white powders</a> and other things have been mailed to numerous Congresspeople.</p>
<p>Sadly, it didn't start last week; it didn't even start with health care reform. In 2008, Sen. John McCain and Sarah Palin ran on a campaign that boiled down to "hate Obama." They called him a terrorist, or friend of terrorists. They call him or anyone who supported him un-American and evil. This rhetoric lead some people to cry out "Kill him" at a Palin rally. But it didn't even start there: Rove and Bush, Reagan, Nixon, McCarthy all have attempted to turn their political opponents into something other than American, other than human. This dehumanization creates an excuse for the more violent among us to act on their tendencies. It is much easier to harm someone that you believe is "other" than it is to harm your fellow citizens.</p>
<p>Now, Republican Congressmen are trying to play both sides. <a href="http://tpmlivewire.talkingpointsmemo.com/2010/03/mccain-problems-with-violent-language-please-video.php">John McCain</a> has said "The language we should be using is the language we are using." House Minority Leader Boehner <a href="http://www.politico.com/news/stories/0310/34983_Page2.html#ixzz0jCHJiGNN">said</a> "But, as I've said, violence and threats are unacceptable" but "Washington Democrats just aren't listening." Minority Whip Cantor, in a fit of total hypocrisy, <a href="http://dailycaller.com/2010/03/25/cantor-blasts-dems-for-using-threats-against-lawmakers-as-political-weapons/">claimed</a> "Democrats are fanning the flames [of violence]."</p>
<p>Many on the right also attempt to create false equivalencies. They claim the rhetoric used against Bush was just as bad, or that violence from extremists on the far left is the same. The thing they don't mention is that no ranking Democrat ever endorsed such statements or acts. The anarchists Glenn Beck pointed to yesterday don't have conventions led by Rep. Pelosi or Rep. Weiner. Code Pink was as, if not more likely to shout down a Democratic event than a Republican one.</p>
<p>The mainstream news media itself is complicit. They treat a report on a bullet hitting Rep. Cantor's Richmond office as violence from the left, even hours after police report it was a random bullet fired into the air, possibly from miles away. They'll report on phone calls calling a Republican representative racist as comparable to phone calls threatening the life of Democratic representatives <em>and their children</em>. They compare fringe rhetoric from organizations like Code Pink to direct threats from Tea Party organizations that have been embraced by Republican leadership. <strong>These are not equivalent.</strong></p>
<p>Political sentiment doesn't really fall on a strait continuum; if you go far enough left, the rhetoric is no different from the far right. To demonstrate this, I've used a circle instead of the usual line:</p>
<p><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://4.bp.blogspot.com/_9jy4wgEgRio/S60KVrnetLI/AAAAAAAAAEw/G3jxOyKlTm4/s1600/standardTorq.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 354px; height: 336px;" src="http://4.bp.blogspot.com/_9jy4wgEgRio/S60KVrnetLI/AAAAAAAAAEw/G3jxOyKlTm4/s400/standardTorq.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5453026091417384114" /></a></p>
<p>In a normal climate, even to a point during the Bush administration the political spectrum looked like this. The majority of people are moderates (bottom) who flow back and forth between the parties. On the left and the right are the major parties bases. And at the extreme are Anarchists (top). The colors demonstrate party affiliation, left, mostly Democratic being blue and right, mostly Republican, being red with the moderate independents purple and anarchic independents in black. You'll usually find some overlap at the edge, on the left being represented by people like Michael Moore and Dennis Kucinich and on the right by Ron Paul and Ayn Rand. These people aren't generally embraced by the mainstream of the parties and so stay on the fringe. </p>
<p>This balance has shifted significantly in the past decade, especially since Obama's election. Now the spectrum looks more like this:</p>
<p><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://4.bp.blogspot.com/_9jy4wgEgRio/S60KeVl_kyI/AAAAAAAAAE4/0Y0UiVtYjf8/s1600/currentTorq.JPG"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 354px; height: 336px;" src="http://4.bp.blogspot.com/_9jy4wgEgRio/S60KeVl_kyI/AAAAAAAAAE4/0Y0UiVtYjf8/s400/currentTorq.JPG" border="0" alt=""id="BLOGGER_PHOTO_ID_5453026240124392226" /></a></p>
<p>Republicans have abandoned the center moderates (i.e. Sens. Specter, Snowe and Collins) and embraced their far fringes (i.e. Rep. Bachmann, Glenn Beck). Even those typically seen as far right are being challenged as not "pure" enough (<a href="http://dailycaller.com/2010/02/28/tea-party-inspired-candidates-target-ron-paul-in-upcoming-primary/">such as Ron Paul being primaried by those further right</a>). Some normally considered solid conservatives are being dropped from conservative organizations (<a href="http://voices.washingtonpost.com/postpartisan/2010/03/aei_hits_david_frum_where_it_h.html">David Frum ousted from American Enterprise Institute</a>).</p>
<p>This can not continue. If this nation is going to hold together, the violence has to stop, the threats need to end, and the Republican party has to stop embracing the fear and hatred they have created. Their decades of creating an "us" vs. "them" environment and demonizing their opponents have created this monster and they must kill it before it consumes them.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com1tag:blogger.com,1999:blog-4123986840630926993.post-66973612663401337592010-02-24T15:45:00.006-06:002010-02-24T16:12:41.395-06:00Visualizing climate change<p>In the heart of winter with all the snow around, it can be hard to accept that the globe is getting warmer. It is easy to confuse short term localized weather with the much longer term global changes that a climate change researcher must monitor. I've put together a couple charts that show global temperatures over the longer term to see how stark a difference the change over the past fifty years has been. All of the data is available at NASA's <a href="http://data.giss.nasa.gov/gistemp/">Goddard Institute for Space Studies</a>.</p>
<p><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://1.bp.blogspot.com/_9jy4wgEgRio/S4WhIchw4qI/AAAAAAAAAEc/gCw3RANdnkU/s1600-h/avgTemp.gif"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 197px;" src="http://1.bp.blogspot.com/_9jy4wgEgRio/S4WhIchw4qI/AAAAAAAAAEc/gCw3RANdnkU/s400/avgTemp.gif" border="0" alt=""id="BLOGGER_PHOTO_ID_5441932891215946402" /></a></p>
<p>This chart shows the average global temperature per decade since 1860. The more red a bar is, the hotter it is compared to the year before. To highlight these decade changes further see below:</p>
<p><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://4.bp.blogspot.com/_9jy4wgEgRio/S4WiBtMu0TI/AAAAAAAAAEk/HGp8WgVXTGg/s1600-h/tempChange.gif"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 198px;" src="http://4.bp.blogspot.com/_9jy4wgEgRio/S4WiBtMu0TI/AAAAAAAAAEk/HGp8WgVXTGg/s400/tempChange.gif" border="0" alt=""id="BLOGGER_PHOTO_ID_5441933874943676722" /></a></p>
<p>What I find most disturbing is that there has been only one decade in the past century cooler than the preceding one.</p>
<p>This is something that <strong>has</strong> to be stopped. An strong snow storm in Washington DC during winter doesn't change that fact.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com0tag:blogger.com,1999:blog-4123986840630926993.post-29211133730628089002009-11-04T09:30:00.002-06:002009-11-04T10:37:55.314-06:00Post election analysis<p>I'm sure everyone is quickly becoming tired of Republican gloating and the MSM echoing the Faux "News" meme that this election was a referendum on Obama. If any of them were to actually look at any exit polls, they'd see a <strong>clear</strong> majority said Obama had no effect, with another 20% saying they voted to show <strong>support</strong> for Obama. But don't let reality distract the right. As long as they remain distracted by this, they'll ignore the true lessons of this election and remain a minority party for longer.</p>
<p>There are three real lessons that I saw in these elections: extremism is a sure way to lose, names on the ticket are more important than names in Washington, and elections are more often lost than won. Please share yours in the comments.</p>
<h4>Extremism is a sure way to lose</h4>
<p>New York's 23th district is the strongest reflection of this. For those who missed it, in the Republican primary, DeDe Scozzafava won a strong majority. In response to her moderate views on gay marriage and taxes, the extremist wing of the Republican party backed a third party Conservative candidate, David Hoffman. This caused a schism in the vote which gave the Democrat, Bill Owens, a slight advantage. The conservative rancor was so strong, it drove Scozzafava from the race, not to endorse Hoffman, but to endorse the moderate Democrat, Owens. In the end, Owens won a seat that has been held by Republicans for about 130 years (only ten times longer than the 8 and 12 years since a Republican held the VA and NJ governorship). America is a moderate country; nearly 30% of citizens identify themselves as Democrats, about 20% as Republicans, leaving more than 50% identifying themselves as independent. Similar numbers are reflected along the conservative/liberal spectrum as well. Espousing extremist views is a sure way to drive the majority moderate/independent away from either side.</p>
<h4>Names on the ticket are more important than names in Washington</h4>
<p>As the exit polls I mentioned above show, Obama had no effect on 60% of New Jersians and 55% of Virginians. The remaining 40ish percent were split somewhat evenly for and against Obama and I have the feeling they would have voted this way with or without Obama. Meanwhile, New Jersy's Jon Corzine had a state-wide approval comparable to Bush/Cheney in 2008. In Virginia, only 47% of voters said they felt Creigh Deeds shared their views (61% said Bob McDonnell did).</p>
<h4>Elections are more often lost than won</h4>
<p>As I mentioned above, Governor Corzine's job approval rating was in the mid 20s throughout most of the campaign. Yet the primary message put out in his campaign ads were along the lines of "Chris Christie is corrupt too." Messages like this are don't fix your weakness and at times can highlight your own issues. If he had instead focused on his own successes as governor, he could have turned around his job approval numbers (possibly) and possibly won the vote. Similarly, Creigh Deeds largely didn't campaign for himself but against his opponent. Halfway through the campaign, a golden opportunity was dropped in his lap with the discovery of McDonnell's college thesis advocating against women's equality. This is great to highlight progressive, equal rights/equal pay agenda and is useful as one piece of a campaign. Instead, Deeds made this his entire campaign. As such, by the time the election rolled around, nearly two thirds of voters said the paper had no effect on their vote. Neither of these candidates brought strong ideas or principles to the table (although their opponents only brought the "taxes are too high" canard) which are what bring people to the polls to vote for candidates. This principle was also reflected in the 2004 and 2008 presidential campaigns. John Kerry failed to strongly advocate his own views and instead was largely a anti-Bush candidate in 2004 and John McCain threw away any opportunity he had by campaigning erratically without any clear personal message.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com1tag:blogger.com,1999:blog-4123986840630926993.post-25268735100695163442009-08-07T07:32:00.000-06:002009-08-07T07:33:21.626-06:00Other email from ObamaSent 8-5-2009
<p>John --</p>
<p>This is the moment our movement was built for.</p>
<p>For one month, the fight for health insurance reform leaves the backrooms of Washington, D.C., and returns to communities across America. Throughout August, members of Congress are back home, where the hands they shake and the voices they hear will not belong to lobbyists, but to people like you.</p>
<p>Home is where we're strongest. We didn't win last year's election together at a committee hearing in D.C. We won it on the doorsteps and the phone lines, at the softball games and the town meetings, and in every part of this great country where people gather to talk about what matters most. And if you're willing to step up once again, that's exactly where we're going to win this historic campaign for the guaranteed, affordable health insurance that every American deserves.</p>
<p>There are those who profit from the status quo, or see this debate as a political game, and they will stop at nothing to block reform. They are filling the airwaves and the internet with outrageous falsehoods to scare people into opposing change. And some people, not surprisingly, are getting pretty nervous. So we've got to get out there, fight lies with truth, and set the record straight.</p>
<p>That's why Organizing for America is putting together thousands of events this month where you can reach out to neighbors, show your support, and make certain your members of Congress know that you're counting on them to act.
But these canvasses, town halls, and gatherings only make a difference if you turn up to knock on doors, share your views, and show your support. So here's what I need from you:</p>
<p>Can you commit to join at least one event in your community this month?</p>
<p>In politics, there's a rule that says when you ask people to get involved, always tell them it'll be easy. Well, let's be honest here: Passing comprehensive health insurance reform will not be easy. Every President since Harry Truman has talked about it, and the most powerful and experienced lobbyists in Washington stand in the way. </p>
<p>But every day we don't act, Americans watch their premiums rise three times faster than wages, small businesses and families are pushed towards bankruptcy, and 14,000 people lose their coverage entirely. The cost of inaction is simply too much for the people of this nation to bear. </p>
So yes, fixing this crisis will not be easy. Our opponents will attack us every day for daring to try. It will require time, and hard work, and there will be days when we don't know if we have anything more to give. But there comes a moment when we all have to choose between doing what's easy, and doing what's right.
<p>This is one of those times. And moments like this are what this movement was built for. So, are you ready? </p>
<p>Please commit now to taking at least one action in your community this month to build support for health insurance reform:</p>
<p>http://my.barackobama.com/CommitAugust</p>
<p>Let's seize this moment and win this historic victory for our economy, our health and our families. </p>
<p>Thank you,</p>
<p>President Barack Obama</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com1tag:blogger.com,1999:blog-4123986840630926993.post-20512824076669125212009-08-07T06:39:00.001-06:002009-08-07T06:41:39.078-06:00Email from Obama<p>John --</p>
<p>Members of Congress have been home for just a few days, and they're already facing increased pressure from insurance companies, special interests, and partisan attack organizations that are spending millions to block health insurance reform.</p>
<p>These groups are using scare tactics and spreading smears about the President's plan for reform, trying to incite constituents into lashing out at their representatives and disrupting their events.</p>
<p>The goal of these disruptions is for a few people to get a lot of media attention and hijack the entire public discourse. If they succeed, all Americans -- Democrats, Republicans, and Independents -- will continue to struggle under the broken status quo.</p>
<p>It's up to us to show Congress that those loudly opposing reform are a tiny minority being stirred up by special interests, and that a huge majority strongly supports enacting real health insurance reform in 2009.</p>
<p>Your representative, Wm. Lacy Clay, has been fighting hard for real health insurance reform. Can you call the local office in Saint Louis? Let the person who answers know that you're a constituent. Then tell them: "Thanks for working to enact real health insurance reform this year. Voters like me support your efforts."</p>
<p>According to our records, you live in Missouri's 1st congressional district. Please call:</p>
<p>Rep. Wm. Lacy Clay at 314-367-1970.</p>
<p>Once you've made your call, click here to report it.</p>
<p>(Not your representative? Click here to look yours up.)</p>
<p>Calling should only take a few minutes, but it's a huge help. These local offices serve as the main connection between a member of Congress and voters in the district. And with representatives home on recess, the staff there are in daily contact with your member, keeping them updated on how many calls they receive that are for or against reform.</p>
<p>Once you've called, please tell us. Knowing how many calls are coming in from all around the country will help us better plan our campaign -- and help us show that the American people overwhelmingly want health insurance reform this year. Let us know you called:</p>
<p>http://my.barackobama.com/districtcall1?district=MO1&postal_code=63108</p>
<p>Thanks,</p>
<p>Mitch</p>
<p>Mitch Stewart<br />
Director<br />
Organizing for America</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com0tag:blogger.com,1999:blog-4123986840630926993.post-12182031368897088222009-07-15T22:19:00.003-06:002009-07-21T07:34:31.682-06:00Who's really trying to ration health care<p>In the debate over the health care reform bills coming before the House of Representatives (<a href="http://energycommerce.house.gov/Press_111/20090714/aahca.pdf">pdf</a>) and the Senate, the go to objection for conservatives and Republicans has been, "Do you want the government to be able to tell you what care you can receive?" Setting aside the logical inconsistency that care right now is rationed (either directly by insurance companies or indirectly through overpriced care and employment risks) this argument is hypocritical and self serving.</p>
<p>First, the bill linked above from the House expressly <strong>prohibits</strong> restricting coverage A (I)(C)(121)(c) pg. 26:</p>
<blockquote>A qualified health benefits plan may not impose any restriction (other than cost sharing) unrelated to clinical appropriateness on the coverage of the health care items and services.</blockquote>
<p>In fact, throughout all of Division A (the section that establishes both the public option and defines what meets the mandate specifications as an eligible private plan) the only restrictions this bill sets are on <strong>minimum</strong> quality of coverage. Most of these minimums go above and beyond what I see in private plans (mental health parity, elimination of pre-existing conditions, etc.) This isn't rationing of care, this is the opposite just as then candidate Obama promised on the campaign trail (although with the addition of a mandate as Hillary Clinton and John Edwards had proposed).</p>
<p>Throughout this entire debate I have heard only <strong>one</strong> group call for <em>any</em> government imposed restrictions on the type of care you can receive. This hasn't been Democrats trying to tell doctors to give this drug instead of that one. This hasn't been progressives trying to say which doctor you get to see.</p>
<p>The only people asking that the government not provide coverage has been <em>Republicans</em>. It is the Republican leadership and Congressmen that are trying to get an amendment passed that would restrict the care a woman can receive from her doctor. They want to impose a restriction on coverage that would prevent a woman from accessing legal safe abortions.</p>
<p>They're not trying to impose this restriction on medical grounds. They're not even trying to impose it based on cost savings. The one and only reason they have for proposing this is because their religious base says so. Because their religious base believes abortion is wrong, they want to deny this essential and sometimes life saving procedure to those who need it.</p>
<p>There is a reason our founders created a firm wall between church and state. They knew that forcing one's religious beliefs on another took away the freedoms of everyone. In fact, many of the first European immigrants came to these shores because others were attempting to force their religious beliefs on them.</p>
<p>Could you imagine the outcry if representatives with large Amish constituencies passed a provision banning the coverage for MRIs because they view that as wrong? Or Scientologists banning treatment of depression? The outcry from the "libertarian" right would be deafening. We can not let this hypocrisy stand or go unchallenged.</p>
<p>Remember this the next time you hear the "rationing" health care argument these reforms. Those who preach it the loudest already are the first to attempt to do so.</p>
<p>Please contact your Senators and Representatives and ask them to keep government out of decisions that should be between patients and doctors. Sign this <a href="http://www.democrats.com/no-politics-with-womens-health">petition</a> from Democrats.com or contact them directly (<a href="http://senate.gov/general/contact_information/senators_cfm.cfm">Senator contact information</a>, <a href="http://www.house.gov/house/MemberWWW_by_State.shtml">Congressperson contact information</a>)</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com2tag:blogger.com,1999:blog-4123986840630926993.post-24948865427180217172009-02-09T10:51:00.004-06:002009-02-10T09:56:02.601-06:00Conservative Keynesian Myth<p>There is a myth going around. Largely it is repeated in Conservative circles, but many political pundits (George Will and Newt Gingrich chief among them) like repeating it. They repeat over and over that "Keynesian economics has never worked." Yet immediately they turn right around and thoroughly disprove themselves.</p>
<p>The most openly Keynesian action by our government was the New Deal of FDR in the 1930s. Conservatives claim that Keynesian policy was an absolute failure because we didn't fully exit the Depression until World War II. They ignore two major flaws in this thinking.</p>
<p>The first problem is that Keynesian policy wasn't used throughout the Depression. From 1933 into 1937 FDR took the "kitchen sink" approach. He would try something, see how it worked and either continue it or move on to something else. The WPA and many other programs were started and got people back to work. For these four years, <a href="http://mjperry.blogspot.com/2008/11/real-gdp-fell-by-293-from-1930-to-1933.html">GDP grew an average of 10%</a> per year, unemployment fell <a href="http://www.bls.gov/opub/cwc/cm20030124ar03p1.htm">from 25% to a minimum of 12%</a> in <a href="http://www.econlib.org/library/Enc/GreatDepression.html">June of 1937</a> (using the same calculation for unemployment today that they used then, we are currently between 14 and 16%), and created an <a href="http://74.125.95.132/search?q=cache:7JadcgG2mcMJ:www.teachingamericanhistory.org/institutes/2003/quinlivan.doc+average+income+1933+to+1937&hl=en&ct=clnk&cd=10&gl=us&client=firefox-a">average 9% annual increase</a> in average incomes.</p>
<p>Throughout this whole period FDR and his Treasury Secretary, <a href="http://en.wikipedia.org/wiki/Henry_Morgenthau,_Jr.">Henry Morgenthau Jr.</a>, were constantly worried about the expanding deficit. By 1937, things seemed to be looking relatively better. GDP had grown from $56.4 billion to $91.9 (current dollars adjusted for inflation). Unemployment, as I said above, had fallen by nearly 50%. FDR let his inner deficit hawk take control and cut spending by over about <a href="http://www.usstuckonstupid.com/sos1938.html">two billion dollars</a> (adjusted for inflation). When this happened, GDP stumbled and fell more than 3% and unemployment jumped to 19%.</p>
<p>Then we get to the second half of the Conservative myth wherein they contradict themselves. Every Conservative economist claims that the Great Depression disproves Keynesian economics because we didn't pull out of the Depression fully until the war effort ramped up. But if you look at that, it only proves Keynes correct. The war effort didn't have tax cuts, it didn't have a balanced budget (just the opposite, spending 140%+ of GDP). No monetary policy brought us out of the Depression during WWII. It was direct government spending unlike anything we had seen before or have seen since.</p>
<p>Other policies can help with recessions. Monetary policy has worked in the past, as recently as 2001. Tax cuts sometimes help, but rarely in isolation (see 2008 for an example of a tax cut failing in isolation). But these options aren't available to us and don't work in a demand death spiral like we are in now. Monetary policy is used up, we are at 0% interest. Tax rebates have already failed once and the smaller one being proposed now won't work any better. Tax incentives for purchases can't work if people can't purchase. The only thing left is for the US government to directly stimulate demand by direct spending. Other things like the middle class tax cut may help on the short term while government spending ramps up, but without the larger government projects, that short term stimulus will be wasted just as quickly as last year's stimulus checks.</p>
<p><strong>UPDATE:</strong> Rachel Maddow discussed this as well. Here is an <a href="http://www.ourfuture.org/blog-entry/2009020603/fdr-failed-myth">article</a> with other good charts that reflect my points.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com11tag:blogger.com,1999:blog-4123986840630926993.post-45470672263579138922009-01-20T20:24:00.003-06:002009-01-20T21:14:13.144-06:00An Ending?<p>This glorious day has seen the end of a number of things. An end to the Bush administration. An end to the national shame of endorsement of torture. And as some have said, "An end of an error." We have also seen a brilliant first; the first black man elected to the highest office of the land. And it is this first that has brought an end to something else that many pundits are trying to put a finger on.</p>
<p>Many have said it is an end to segregation, to discrimination, or to racism. These pundits are lofty, but they ignore the reality that many African-Americans face every day throughout the country. Racism isn't going to be defeated by one election. Hatred and bigotry were an undercurrent (and sometimes not so under) throughout the election, and while it has suffered a defeat, it is not gone. The next time an African-American runs for president, the bar will not be as high, but it will still be higher than for a white man.</p>
<p>No, what I believe we saw an end to when Barack Hussein Obama took the oath of office is much more subtle. I believe we saw an end to an idea, to an undercurrent of modern culture, that African-Americans can't succeed. Children have been told that in America you can be anything you want to be: astronaut, fireman, or even president. But for African American children, this has always seemed a pipe dream. Only 45 years ago, dogs were sicced on them for attempting to attend school. 30 years ago a president ran on a platform of attacking welfare as handouts for the lazy and unworthy (with an implied "black"). Even this year, we saw a presidential candidate attacked for being black with opponents attempting to diminish him as just another black candidate or as uppity.</p>
<p>But this has come to an end. These children now can look at their chart of presidents and see a black man's face among the 44. They can look on their TVs and see 2 or 3 million people of all races cheering this man on as he takes the reins of power. They know that the words "all men are created equal" are finally being lived up to. And while discrimination and bigotry and hatred haven't ended, when they face these obstacles they will have the strength of knowing that over 60 million of their fellow citizens voted for a man born to an African imigrant, a man who grew up at times on food stamps, and who has the name Barack Hussein Obama.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com2tag:blogger.com,1999:blog-4123986840630926993.post-63904106013843056302009-01-12T22:55:00.003-06:002009-01-12T23:40:34.798-06:00Stimulate This<p>Congress and the President (elect) are now debating how best to work out a stimulus package to pull us out of of the recession we have been in for more than 12 months. And while we only have 535 Senators and Representatives (give or take) we have thousands of ideas how best to do this. Obama has promised for more than a year tax breaks for families making under $250k and for employers who hire American workers instead of shipping jobs overseas. Every member of Congress wants a tax break or direct hand out for their own local pet project (that they want their name attached to in stone after it's completed). And there are even some who think we should lock up the money and hope it's still worth something after our economy has collapsed.</p>
<p>In times like we are now facing, though, only the government has the capability of spending unfortunately. Even with trillions of dollars in bail outs, buy outs, and other promises, the lending institutions that could empower the private sector to drive the recovery are still hording their money, ensuring no improvements can come from there. Private citizens are (for the first time in decades) saving more than they are spending and, while wise for a population who's personal savings rate has been in the low $1,000s, this adds more to the stranglehold on our financial system. The Federal Reserve, even as lender of last resort, simply can't put as much on its balance sheet as would be necessary. This leaves only the federal government itself as the spender of last resort and the best chance of breaking through the deadlock.</p>
<p>But while the government does need to increase spending, it must do so carefully. Spending a couple million on a Woodstock Museum or $400 million on a bridge to nowhere will only serve to tie up that money and keep it from its full potential. We need to make sure the money we the people spend will work not just once for a handful of local jobs, but work repeatedly. We must invest in things that will serve us long term, as the interstate system has since it was started in the 1950s. We need to expand broadband access, improve our electrical grid to handle the new requirements that will be put on it, and create a true green economy that will last us for centuries longer than fossil fuels could possibly hope to.</p>
<p>To this end, governors and mayors from across the country have sent proposals to Obama's transition team. Many of these "shovel ready" projects will strengthen communities and create jobs as is needed, but many others are aptly titled pork. The President and VP (elect) have made it very clear there should be none of the later in the bill, but they have a 535 member body that is very accustomed to bacon and will put up a fight. Obama and Biden must hold the line because otherwise it will be even harder next time.</p>
<p>Some proposals though may just need tweaking to turn from pork to a true improvement. Seattle is proposing projects worth as much as $7 million (<a href="http://investing.businessweek.com/research/stocks/news/article.asp?docKey=600-200812201222KRTRIB__BUSNEWS_43429-2U91J5PPIINQ8P428E6ASG4L6U&params=timestamp%7C%7C12/20/2008%2012:22%20PM%20ET%7C%7Cheadline%7C%7COn%20Nickels%27%20wish%20list%3A%20solar%20panels%20atop%20Qwest%20Field%20hall%20%5BSeattle%20Times%5D%7C%7CdocSource%7C%7CKnight%20Ridder/Tribune%7C%7Cprovider%7C%7CACQUIREMEDIA&symbol=WIN">for one solar installation</a>). This may seem ludicrous when you consider that some years there are more rainy days in Seattle than sunny days. But, while areas like Nevada may be able to make thousands of times more solar megawatt hours than Washington, it is unable, with the current electrical grid, to efficiently send that electricity up north. Meanwhile, countries like Germany, which gets a comprable amount of sunlight annually, is the leader of solar power in all Europe. Now, the plan as proposed would only power the (publicly owned) Qwest exhibition center and as planned would only reduce energy costs 14-16%. I don't know what the current energy costs of this building are, but that doesn't sound like much bang for the buck. It is possible, though, if Seattle uses lessons learned in Germany, to apply such funds to a solar network that may generate much better results and make that $7 million really work.</p>
<p>We are very lucky to have a President (can I drop the "elect" yet? PLEASE!!!) who values a high level of skill and expertise over dogmatic loyalty. This quality will hopefully guide policy and spend our money much more wisely than the failure of Bush and Paulson have.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com3tag:blogger.com,1999:blog-4123986840630926993.post-84399367874355197982009-01-12T22:45:00.003-06:002009-01-12T22:55:11.931-06:00Rumors of my death only show you weren't listening<p>It's been a while since I've been back over here. Sorry if it's gotten a bit dusty. It isn't for lack of things to talk about though; the last two months have been anything but quiet. Between failed bailouts, bailouts that failed to pass (but were implemented anyway), power hungry governors and egocentric wanna-be senators and war this has been a hectic transition period.</p>
<p>And while I have been silent here on my blog, my Twitter followers have suffered from an abundance of opinion. I will still come here and post periodically, most of my attention will be focused by the more concise 140 character limit imposed over there. Those who haven't already, feel free to come over and tell me there what I am getting wrong - <a href="http://twitter.com/trianglman">http://twitter.com/trianglman</a></p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com2tag:blogger.com,1999:blog-4123986840630926993.post-3583610821168924582008-11-13T13:32:00.003-06:002008-11-13T16:26:48.324-06:00Open Hands<p>Now that Bush has started handing out money to any corporation that says they are about to fail, lots more companies are looking to spread the wealth from the American tax payer to their personal shareholders. Now it's the car manufacturers putting their hands out. Some questions that should be answered before we do anything are: how did they get there, how will (or just "will") a bail out help them and how should a bailout be structured?</p>
<p>GM has been on the path to this point for years now. At least since 2004 (I don't have data that goes back further) GM has steadily been posting decreasing net profits (2006 being an exception). The sudden spike in oil prices over the past couple years has exasperated the problem, which is reflected in 2007's $42,000,000,000 net loss. Over the same time period, Toyota has moved more strongly into the American market (exceeding GM for net sales this year). Toyota has done this through a reputation of quality (which GM and Ford have both lost over the past couple decades), a wide selection of low priced cars, and especially the past couple years a record of fuel efficiency. Only in the past year have the American automakers refocused their message on fuel efficiency, often still falling short (due to their focus on SUVs, all of the hybrids from GM, et al have been SUVs, which still barely break the 20 mpg mark vs. 40-50 mpg Prius, etc.). Just this month we learned that the automakers are still bleeding millions of dollars a month, even as they attempt to retool their factories and cut their workforce.</p>
<p>This brings us to what the companies are asking for the money for. One of the biggest costs facing automakers is changing their plants from building SUVs and Hummers to more fuel efficient hybrids and Volts. This is key to these companies being viable in the near and long term future, but it is a huge cost. Due to the credit crisis of the past few months, lending that could have financed such changes has dried up. What the automakers believe is that if they can get the money to make the cars people want, people will start buying again and they will return to solvency.</p>
<p>Sadly, I'm not completely sure this will be the case. The credit slow down has affected more than just banks and corporations. Buyers also are unable to get credit. Also, much of the purchasing power of American consumers in the past few years has been due to increasing home values and decreasing costs of borrowing on those houses. Now, with both of those reversing, the consumer just can't afford to buy a new car. This is reflected in the fact that even Toyota's sales are negative this past quarter. Also, because GM, Ford and Chrysler have been so slow to get into the hybrid market, it will take time to convince consumers that they are comparable to the Priuses and Civic hybrids of foreign automakers.</p>
<p>Because of this, I don't think we should or even can do a bail out similar to the one proposed for the bad mortgages. NPR's All Things Considered last night did a <a href="http://www.npr.org/templates/story/story.php?storyId=96922222">segment</a> on the Chrysler bail out from 1979. Then, instead of directly giving Chrysler the nearly $2 billion, the government only insured the loans banks gave to the companies. In return, the government got preferred stock, required detailed plans on Chrysler's restructuring, and ensured that if Chrysler went bankrupt that it would get repaid first. Because of this action, Chrysler returned to profitability quickly and wound up paying off the loans seven years early and the government made money on the deal.</p>
<p>I believe a similar set up would be even easier to achieve now. The government, through the TARP law, has much more leverage over banks that could finance such loans. After the buyout of AIG, the government controls roughly 70% of the country's largest insurer. Through these two entities, we could potentially help both the auto industry and, depending on the success of the automakers, ensure long term solvency to the banking industry. This will also keep the government from being on the line for yet another $50 billion that we just simply can't afford right now.</p>
<p>The biggest problem right now is that the banks still aren't lending though. In the past couple weeks since the TARP package was passed, the rate banks lend to each other has dropped more than 4%, yet the rate banks lend to borrowers and to corporations has still remained high. Loosening that up, with targeted goals in mind, is going to be one of the best ways to get the economy moving again. There are two ways to loosen that up, and I think both should be taken: 1) Get money flowing to the middle class, which is where most of the consumer debt is held. You can do this through tools such as the stimulus checks of earlier this year, increased unemployment benefits during this slow down, and tax incentives for job creation. 2) Get loans moving to corporations again. The best ways of doing this are through insuring loans to targeted industries (green energy, infrastructure, automotive to name a few) and tax incentives for targeted initiatives (hiring and green energy again). The problem all along has been a trust issue, so if we can increase the trust, we may be able to pull out of this tailspin and not leave our children with $20 trillion in bad debts to collect.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com15tag:blogger.com,1999:blog-4123986840630926993.post-73025283894124542282008-11-05T18:18:00.004-06:002008-11-05T18:59:14.950-06:00Yes We Did<p>What a day yesterday was.</p>
<p>For my wife and I, it started at 4 AM. My wife was the canvas captain for the Airport Township for the Obama campaign. Meanwhile I was in charge of watching our four year old son until my mother finished voting and running errands so that she could watch him. I took Isaac to vote with me at 8 AM. The line was an hour long, but everyone near me was so excited to be there ready to vote. The couple in front of me were voting for the first time; they had just recently become citizens.</p>
<p>When I cast my vote, I couldn't be prouder. My son helped me by pushing confirm on every screen. Thirty years from now he will be able to tell his children he helped elect our first black president.</p>
<p>Afterward I helped a friend get to the staging location and took Isaac to my mother's. I heard word of a couple <a href="http://www.dailykos.com/story/2008/11/4/9578/77830/635/652289">voter intimidation incidents</a> and <a href="http://twitter.com/strikeforce08/status/990324650">attempts by poll workers</a> to keep people from voting by violating the law and attempting to require multiple forms of ID. These were quickly stopped by the volunteer lawyers and other <a href="http://obamastrikeforce.com/">Obama volunteers</a>. That afternoon I canvased with several other Obama volunteers. Every house I went to the people had already voted. People seeing us on the street honked in encouragement or cheered the Obama tees we had on. There were even victory parties being started at 4PM.</p>
<p>Then came the hardest time. After 6PM it was too late to go out canvasing any more. We all met back up at the staging location and prepared to go out to help with long lines. While there were some long lines closer to St. Louis City (<a href="http://www.ksdk.com/news/local/story.aspx?storyid=159345&catid=3">300 people still in line two hours after polls closed</a>), every voting location in our township had almost no lines and we began to worry that not enough people voted.</p>
<p>When Pennsylvania was called for Obama at 6, we began to be hopeful; one of the four legs of McCain's victory path had been knocked out from under him. After polls closed at 7PM we broke up and many of the volunteers went to the watch party downtown while my wife and I, having been sick for the past couple weeks, went to get our son and headed home.</p>
<p>On the way, Ohio was finally called and I knew Obama would be our next president. Barack's message of hope and inclusion won out over McCain's calls for hate and division.</p>
<p>Now, as I said in my last post, the real work begins. After eight years of divisive politics, of trying to call one group more or less patriotic than another, we must unify. "And to those Americans whose support I have yet to earn - I may not have won your vote, but I hear your voices, I need your help, and I will be your President too." We are one country, INDIVISIBLE; we will, we MUST work together to bring our country out of the troubles that face us now.</p>
<p>As I said on Twitter last night: <span class="entry-content">To all the staunch conservatives:</span><span class="entry-content"> Throw away the straw men and wait to see what really happens before judging Obama's presidency. </span><span class="entry-content">To all the staunch progressives: Obama was always center left. You will not get all you want, but our country will be better than ever. This country has always been a country of moderates. When Bush attempted to take the country too far right the people spoke up in 2006 and again this year. Should Obama attempt to do the opposite they will speak up again. This must be a time of cooperation and compromise or it will always be three steps back for every step forward.</span></p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com1tag:blogger.com,1999:blog-4123986840630926993.post-58765668444450862902008-11-03T09:16:00.003-06:002008-11-03T09:28:08.411-06:00No Rest for the Weary<p>Hopefully 36 hours from now we will know who our next president will be. These next few hours are what it all comes down to. Obama and McCain supporters across the country are working night and day to get their candidate across the 270 electoral vote finish line.</p>
<p>Posting here has been very light the past few months because both my wife and I have been a part of that. Now, more than any time in the past 22 months we need your help. Get out and vote! If you have time (or even if you don't) volunteer. Call your neighbors and remind them to vote; go door to door doing the same; go polling place to polling place encouraging people to brave the hours long lines that are sure to confront us. This country is a representative republic and it ONLY works for those who participate.</p>
<p>Remember also, this fight doesn't end on November 4th. If we elect these people and then stop paying attention, our causes will fall by the wayside. The real work begins November 5th. We must make sure our officials never forget why we put them in office. I have seen many people on the blogs and on Twitter saying they don't know what they will do once this election is over. But we cannot create the change we need if we just leave our elected officials to do it alone.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com0tag:blogger.com,1999:blog-4123986840630926993.post-39055511000097678672008-10-20T23:13:00.004-06:002008-10-20T23:34:23.643-06:00The (in)Famous Pie Speech<p>Some of you may be watching the new Rachel Maddow show (and if you aren't, start). If you were last week, you may have seen a story about Barack Obama repeating the word "pie" twenty times in about two minutes. I'm happy to say, when he came to St. Louis Saturday, he shared that same story with all 100,000 of us. It actually is a really good story for all it's randomness at the beginning. Below is a transcript and the video (story is about 7 minutes in). See <a href="http://momocrats.typepad.com/momocrats/2008/10/one-of-100000-o.html">Momocrats for the other videos and more photos and impressions</a>.</p>
<blockquote>
<p>I was in Ohio last week and I was traveling with the governor there, Ted Strickland. We were on a bus tour talking about jobs. And we were working hard so, we got a little hungry. Decided we needed an afternoon snack. So I decided I needed some pie. Some of you may like cake, I like pie. Turns out Strickland likes pie too.</p>
<p>So we went into this little town, Georgetown Ohio, and found out where the best pie place was. It was this local diner. We went into the diner.</p>
<p>Now, I like sweet potato pie, but they did not have sweet potato pie. I like pecan pie, but there was no pecan pie. But they did have coconut cream pie, and I'll take some cream pie. Strickland, he wanted lemon merangue pie, they had that also.</p>
<p>So we order our pie and the people who are serving us, they want to take a picture with me because they say, "Our boss, he is a die hard Republican. So we just want to poke him a bit by taking this picture."</p>
<p>So while we're standing there cheezing and grinning, the owner walks in, with our pie. And I said, "How do you do sir? I understand you are a die hard Republican."</p>
<p>He said, "That's right."</p>
<p>I said, "How's business?"</p>
<p>He said "Not so good." He said "My customers can't afford to eat out right now."</p>
<p>I said, "Sir, who's been running the economy for the last eight years?"</p>
<p>He scratched his head and said, "I guess the Republicans have."</p>
<p>I said, "Sir, if you keep on hitting your head against a wall and it starts to hurt, do you decide at some point to stop?"</p>
<p>He said "You make a good point."</p>
<p>I said, "Why don't you go ahead and try voting Democratic this year. We can't do any worse than these other folks have been doing now."</p>
</blockquote>
<p>
<object id="embeddedplayer" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=9,0,0,0" classid="clsid:d27cdb6e-ae6d-11cf-96b8-444553540000" width="320" height="305">
<param value="about:blank" name="movie"><param value="true" name="allowFullScreen"><param value="always" name="allowScriptAccess">
<param value="noscale" name="scale">
<param value="LT" name="salign">
<param value="#000000" name="bgcolor">
<param value="window" name="wmode">
<param value="playerId=articleplayer&referralObject=895039214&referralPlaylistId=playlist&adServerBasePath=http://gcirm.gannett-tv.gcion.com/RealMedia/ads/adstream_sx.ads&adPositionId=x25&adSiteId=video.ksdk.com&gpaperCode=gntbcstksdk&marketName=St. Louis, MO&division=broadcast&pageContentCategory=articleplayer&pageContentSubcategory=articleplayer" name="FlashVars">
<embed flashvars="playerId=articleplayer&referralObject=895039214&referralPlaylistId=playlist&adServerBasePath=http://gcirm.gannett-tv.gcion.com/RealMedia/ads/adstream_sx.ads&adPositionId=x25&adSiteId=video.ksdk.com&gpaperCode=gntbcstksdk&marketName=St. Louis, MO&division=broadcast&pageContentCategory=articleplayer&pageContentSubcategory=articleplayer" wmode="window" bgcolor="#000000" salign="LT" scale="noscale" allowscriptaccess="always" allowfullscreen="true" name="articleplayer" play="false" quality="high" menu="false" pluginspage="http://www.macromedia.com/go/getflashplayer" id="embeddedplayer" src="http://gannett.a.mms.mavenapps.net/mms/rt/1/site/gannett-ksdk-3325-pub01-live/current/articleplayer/singleclip/client/embedded/embedded.swf" type="application/x-shockwave-flash" width="320" height="305"></embed>
</object>
<p>Lets all stop hitting our head on the wall.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com2tag:blogger.com,1999:blog-4123986840630926993.post-53678640703947965712008-10-17T09:09:00.002-06:002008-10-17T09:10:23.100-06:00Some Pre-Halloween Fun<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://4.bp.blogspot.com/_9jy4wgEgRio/SPiqxXxYGdI/AAAAAAAAADQ/MPQGMRVMi7c/s1600-h/zombieRepubs.jpg"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer;" src="http://4.bp.blogspot.com/_9jy4wgEgRio/SPiqxXxYGdI/AAAAAAAAADQ/MPQGMRVMi7c/s400/zombieRepubs.jpg" alt="" id="BLOGGER_PHOTO_ID_5258140330126481874" border="0" /></a>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com2tag:blogger.com,1999:blog-4123986840630926993.post-45418495876489962202008-10-15T11:56:00.007-06:002008-10-15T13:28:55.746-06:00The Blame Game - Consumers<p>In this recent economic downturn, people from all sides are pointing fingers and trying to place the blame on one another. This is the first of a series of posts in which I will try to dispel some of the myths being spread.</p>
<p>The most common theme you hear when it comes to the housing market is "people bought more house than they could afford." While this is true in some cases, more often it only became true three to five years after the home was purchased.</p>
<p>Back around 2003-2004 we were just beginning a recovery from the twin market downturn caused by 9-11 and the tech bubble burst. Jobs were slowly being created, interest rates were at all time lows and many were expecting the economy to really grow. Because of this, more people saw that they were finally able to get into the housing market. This caused house prices to grow which allowed people already in a house to upgrade to a new house. This was the start of the housing market boom.</p>
<p>What people didn't realize was that the economic growth they were seeing in the markets was a shallow gain. While average wages were going up, they weren't matching inflation. What's more is that the average number was skewed by a large increase in income for the top 1% with little to no gains for the other 99% of us (see charts below). At the same time, mortgage brokers and other lenders (who we will discuss more thoroughly later) saw the potential for large profits via new mortgaging schemes now dubbed "sub-prime." This led them to encourage clients that could qualify for standard mortgages to instead apply for adjustable rate or other balloon mortgages.</p>
<p style="font-size:.7em;text-align:center;">
<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://4.bp.blogspot.com/_9jy4wgEgRio/SPY9T7YgAfI/AAAAAAAAAC4/MVsYD1Msz78/s1600-h/graph-2-wages.jpg"><img style="display:block; margin:0px auto 3px; text-align:center;cursor:pointer; cursor:hand;" src="http://4.bp.blogspot.com/_9jy4wgEgRio/SPY9T7YgAfI/AAAAAAAAAC4/MVsYD1Msz78/s320/graph-2-wages.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5257457027568894450" /></a>
<a href="">Courtesy</a><br />
<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://4.bp.blogspot.com/_9jy4wgEgRio/SPY9ULUntFI/AAAAAAAAADA/Lk3akIBeMJo/s1600-h/snap20041029fig2.gif"><img style="display:block; margin:3px auto; text-align:center;cursor:pointer; cursor:hand;" src="http://4.bp.blogspot.com/_9jy4wgEgRio/SPY9ULUntFI/AAAAAAAAADA/Lk3akIBeMJo/s320/snap20041029fig2.gif" border="0" alt=""id="BLOGGER_PHOTO_ID_5257457031847588946" /></a>
<a href="http://www.epi.org/content.cfm/webfeatures_snapshots_10292004">Courtesy</a><br />
<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://1.bp.blogspot.com/_9jy4wgEgRio/SPY9UXRbPmI/AAAAAAAAADI/XfjfUczlnus/s1600-h/snap20050111nom.gif"><img style="display:block; margin:3px auto; text-align:center;cursor:pointer; cursor:hand;" src="http://1.bp.blogspot.com/_9jy4wgEgRio/SPY9UXRbPmI/AAAAAAAAADI/XfjfUczlnus/s320/snap20050111nom.gif" border="0" alt=""id="BLOGGER_PHOTO_ID_5257457035055414882" /></a>
<a href="http://www.epi.org/content.cfm/webfeatures_snapshots_20060111">Courtesy</a>
</p>
<p>This is why I say most people trapped in this mess could afford the house they bought <span style="font-style: italic;">at the time</span>. However, when inflation went up (not only food prices, health insurance costs have increased 20-30% annually in many cases; an <a href="http://www.nchc.org/facts/cost.shtml">average of 6%</a>) but their wages didn't, they were put in tighter and tighter circumstances. In the very early days of the current crisis (circa 2005-6) some people were still able to refinance or sell their way out. But some people hit a more severe hardship. Many people got to the point where they were living paycheck to paycheck. If they lost their employment for even a month, they wouldn't be able to pay the mortgage. If they had any sort of medical emergency, they wouldn't be able to pay the mortgage. These people began going into default.</p>
<p>By late 2006 and throughout 2007, the housing boom started really slowing. Job growth had slowed or at times gone negative. Federal interest rates had been raised from their 2003 lows of 1% back up to a more reasonable 3%+. At the same time, personal property taxes were being reset to the new home values. In many cases this caused a doubling of those taxes. People could no longer refinance their homes. Fewer people could buy so housing prices began to slump and selling the house was no longer a way out. Wages that had been stagnant (or negative) for three or four years were no longer able to afford the mortgage and the rapidly increasing cost of getting to work. The people who in 2003 could afford their house were rapidly getting buried under increasing piles of debt. This trap many home owners fell into is what began the popping of the sub-prime bubble.</p>
<p>So I ask you, is it your fault that corporations have enjoyed their multi-million dollar golden parachutes while the employees working 60 hours a week to make ends meet get nothing? Is it their fault that insurance costs grow by double digit percentages while coverage steadily drops?</p>
<p>There were some people who bought beyond their means, don't get me wrong. If you make $30,000 a year, you probably can't afford a $300,000 house. If you are told you can live in a house for three years without paying anything (what some of the balloon mortgage plans promised), it is probably too good to be true and you shouldn't sign up for it. But I can't put the blame on a working family who couldn't see that their earnings would be the same four years down the line but their expenses would have grown by double digits. I don't blame the public school graduate who can't understand the ins and outs of mortgages that even the Harvard educated accountants who invented them barely understand.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com1tag:blogger.com,1999:blog-4123986840630926993.post-60697216170104954142008-09-29T08:59:00.004-06:002008-09-29T13:26:11.608-06:00Review of the bailout<h2>Yet another letter to my representatives</h2>
<p>This is in regard to the Wall Street Bail out program titled "<a href="http://media.washingtonpost.com/wp-srv/politics/documents/bailoutbill_092908.pdf?hpid=topnews">Emergency Economic Stabilization Act of 2008</a>" (pdf).</p>
<p>I must first congratulate Congress on the openness of the process in making the full text of the proposed legislation available and open for public comment before being proposed on the floor. Such a process clearly opens up government to be truly of the people and allows us to make sure government is working for the people. Thank you.</p>
<p>About the legislation itself, there are many good things in it. I do have hesitation about some aspects and am strongly opposed to one main clause. As I was reading the bill, I kept a running <a href="https://twitter.com/trianglman">Twitter stream</a> going of my thoughts.</p>
<p>Beginning with the aspects of this bill that I like, the general outline of the plan is a good idea. While I don't believe that an insurance program will be effective, allowing Sec. Paulson to either apply such a system or buy the securities themselves directly gives him the flexibility necessary to handle such a large and complicated issue. I am also really happy with the openness of this program. The regular reports detailing what securities are being purchased or insured will significantly improve the trust of the American people that their money is being used appropriately.</p>
<p>Requiring this program to work on renegotiating mortgages is probably the single thing that will do the most good in this bill. I also appreciate that executive pay will be restricted if they take part in this program; such a protection will ensure the executives aren't taking advantage of the tax payers for their own personal gain.</p>
<p>There are a couple parts of this bill that I do find issues with. One is the incredible power Sec. Paulson will wield under this bill. Not only is he being put in charge of guiding this program through the Department of Treasury, but he is also one of the five members of the oversight board, with the other four members also being significantly involved in the troubles facing us now. The only other actual oversight is provided by the Office of the Comptroller. Congress will set up another oversight board, but that board will only be set up in a review role, unable to require changes to the program. This concentrates an enormous amount of power over as much as $700 billion in the executive with minimal checks from other branches. I believe that at the least, Congress should be allowed active oversight of the program as well, to ensure tax payer money is being appropriately used.</p>
<p>That however, is not the main issue for me in this bill. Also contained in this bill is the suspension of <a href="http://en.wikipedia.org/wiki/Mark-to-market">mark-to-market accounting</a> (section 132). It is my understanding that this accounting procedure requires banks (and other entities) to list the value of their assets at current market value, not at their expected future value of those assets. Such a write-down has played a factor in this crisis because banks' asset sheets have dropped in value significantly. However, suspending such a rule allows the banks to effectively lie to investors and officials that would loan to them. Were such a rule to be passed for someone such as myself, I could apply for a loan saying that I have $1 million in assets based on a 401k with $10,000 and a $100,000 house -- if I hold on to them long enough, it is estimated that they will be worth $1 million. I would be laughed out of any bank office were I to ask for a loan using that logic.</p>
<p>I do believe that mark-to-market should be reviewed as required in section 133, but the mark-to-market rule should not be suspended until after such a review. There are types of trades that shouldn't be able to affect market value of some of these assets and as such, the rule does need refining. Suspending it wholesale removes the transparency so desperately needed on Wall Street now to improve investor and credit trust. PLEASE, fight against this section of the bill.</p>
<p>h/t to <a href="http://yikes101.blogspot.com/2008/09/this-just-in-bailout-bailout-read-all.html">BAC for linking to the proposal text</a></p>
<p><strong>UPDATE:</strong> The bill as it was written <a href="http://clerk.house.gov/evs/2008/roll674.xml">failed to pass</a> (Yes, ignore the title, this appears to be the correct roll call). My congressman, William "Lacy" Clay did vote against the bailout.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com2tag:blogger.com,1999:blog-4123986840630926993.post-78109962442722310352008-09-19T06:26:00.003-06:002008-09-19T06:28:32.678-06:00Open letter to my congressional representatives<p>I have been listening to lots of coverage of the Tresury Secretary's financial bail-out program proposed 09-18-2008. From my understanding, our government would be responsible for over 1 trillion dollars of bad mortgages. This increases our deficit by 25%. Right now, with just AIG, Bear Stearns and Fannie and Freddie loans under our control, treasury bill yields are nearly 0%. If we take this extra $500 billion in bad debt, the yields will be negative - people will be paying the government to borrow money from us. Our dollar will tank and inflation will go through the roof.</p>
<p>I know that not taking action will cause many more financial institutions to fail. I know that stock markets will continue to fall. This is a risk that the investors knew they were taking on. These financial institutions knew that they didn't really understand the securities they were creating. They willingly took on the risk and gambled with our future. We cannot have the federal government take away all that risk and tell these companies that they were right to take on this risk. It will tell these institutions that they are too important to fail, so if they make further mistakes or take on more bad risks, they will be protected from this risk by the tax payers. This can not happen, and I ask, as a strong supporter of you and an Obama volunteer, that you vote against any such bail out that leaves banks and executives involved in this without penalties.</p>
<p>Thank you for your time</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com9tag:blogger.com,1999:blog-4123986840630926993.post-37282920184775457682008-09-15T09:15:00.003-06:002008-09-15T10:37:39.614-06:00My life as a Momocrats chauffeur<p>With all the depressing news going on right now, let's focus on a more hopeful time. It was a time when, even though Americans were facing many challenges on many fronts, we knew that, with the right tools, we could make a better country. It was a time when our leaders looked to the future confident in our ability to rise above our personal divisions; when politics wasn't just about the people who were running but about the issues they were fighting for. Let's go back to three weeks ago.</p>
<p>The week of the DNC, <a href="http://jaelithej.blogspot.com/">my wife</a> was a credentialed blogger through <a href="http://momocrats.typepad.com/momocrats/">Momocrats</a>. Though ouur son and I wouldn't be able to get credentials and wouldn't be able to get in to see any of the major speeches or anything, we thought it was important that we all go and be a part of this. So we packed up the car and drove the 850 miles to Denver. </p>
<p>The atmosphere there was electric. Signs everywhere were welcoming the Democrats to town. The residents were cheerful and open, many of them thanking us for being a part of the convention. Maybe it was just that there were so many people with the same hopeful world view that brought everybody's mood up.</p>
<p>The plan for us would be that I would run backup: drive Jaelithe and the other Momocrats to whatever events were needed; pick up and drop off supplies; and acquire food when time allowed. The rest of the time, I would take our son to see the city. Denver is a really nice city - for St. Louis residents, imagine Grand Center, the Loop, and the Central West End rolled together into one area. We went to the Denver Art Museum (free thanks to Target), local parks, the main pubic library and many other local sights.</p>
<p>The convention itself was interesting. By going there ourselves, we were able to cut through the curtain the media would hang in front of our eyes. Instead of watching the infighting MSNBC tried to show, we saw an assistant of Chris Matthews run out to grab the seven "PUMA" members in the area to keep them from leaving the shot. Instead of seeing protesters only allowed in the "Free Speech Zone," we saw protesters allowed and encouraged to say their peace when they interrupted Nancy Pelosi at an event. </p>
<p>I also saw the speeches, not through the talking heads and pundits on MSNBC and Faux News, but directly (or as my wife described, "unfiltered") on CSPAN. Rather than listen to Matthews or Hannity bloviate about themselves, I watched regular citizens describe the problems they face as they work themselves to the bone but still see 2%+ real pay cuts as inflation outgrows pay for those making less than $1 million a year. I watched veterans who can't get health care because the party in power would rather spend the money in Iraq. And through this all I have watched these hard working citizens be called whiners over Twitter when they describing how their government has forsaken them in favor of the top 1% of earners.</p>
<p>The DNC was hopeful and uplifting. It gave us real solutions to real problems facing everyone. Yes, they attacked their Republican rivals, but they attacked John McCain's tax policy which mirror's Bush's, and we all see how well that worked. They attacked McCain's foreign policy, which take's Bush's unilateralism to the next level, and showed how isolating ourselves from the world is the wrong way to go. </p>
<p>This is what politics and political conventions should be about. It should be about praising your party's accomplishments and highlighting its policies. It should be about issues that matter to all of us. It shouldn't be about criticizing the hundreds of thousands of community organizers working for $10,000 a year to make the millions of people in their community safer. It shouldn't be about patenting the word "lipstick."</p>
<p>We need a politics focused not on the personality of the one or two people in charge. We need a politics focused on helping the 300 million people living in this country. We need a politics about that recognizes the place of those 300 million people among the 6 billion people globally. Not long ago, those 6 billion people looked to America as the city on the hill, as leaders. Over the past 40 years, and especially in the last 8, we have abdicated that position. That doesn't have to continue. The Democrats recognize this and want to make our nation a shining example of democracy and equality again.</p>John J.http://www.blogger.com/profile/15113315088960432426noreply@blogger.com2