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“This Isn’t The Debate Republicans Want To Have”: Republicans Befuddled By Obama Plan To Cut Middle-Class Taxes

Even President Obama’s most fervent opponents must acknowledge that he’s getting quite good at putting them on the defensive. Facing a Republican Congress and with only two years remaining in his presidency, he seems to come up with a new idea every couple of weeks to drive them up a wall. So he certainly wasn’t going to let the State of the Union address go by without using the opportunity — days of pre- and post-speech commentary, plus an audience in the tens of millions — to its utmost.

At Tuesday’s speech, Obama will announce a series of proposals meant to aid middle class and poor Americans and address inequality, most particularly an increase in the child care credit and a $500 tax credit for working couples (here’s the White House’s fact sheet on the proposals). To pay for it, investment and inheritance taxes on the wealthy would be increased and some loopholes that small numbers of the super-rich (like one Willard Romney) exploit will be closed. While the SOTU is often the occasion for dramatic announcements that are soon forgotten, this one lands in the center a debate that is looking like it will shape the upcoming presidential race. Naturally, Republicans are not pleased.

But if you listen carefully to what they’re saying, you’ll notice that they are barely mentioning the proposals for middle-class tax breaks which are supposed to be the whole purpose of this initiative; instead, all their focus is on the increases America’s noble job creators would have to endure in order to pay for it.

“Slapping American small businesses, savers and investors with more tax hikes only negates the benefits of the tax policies that have been successful in helping to expand the economy, promote savings, and create jobs,” said Orrin Hatch. “More Washington tax hikes and spending is the same, old top-down approach we’ve come to expect from President Obama that hasn’t worked,” said John Boehner’s spokesperson. “This is not a serious proposal,” said Paul Ryan’s flak. “We lift families up and grow the economy with a simpler, flatter tax code, not big tax increases to pay for more Washington spending.” For the record, a “flatter” tax system means either the poor paying more or the rich paying less, though Republicans never say which they prefer.

Marco Rubio was on the same page. “Raising taxes on people that are successful is not going to make people that are struggling more successful,” he said on Face the Nation. “The good news about free enterprise is that everyone can succeed without punishing anyone.” That was about as close as any Republican came to actually talking about the tax cuts Obama is proposing (though this National Review editorial does discuss them, by arguing that it’s an attack on motherhood). That’s probably because Republicans been in favor of ideas like them in the recent past.

While Obama does want to provide new funds to make community college free to anyone who wants it, most of his proposals in this round use the tax code to help people of modest means, which is exactly what Republicans usually suggest when they’re forced to come up with an idea to help the poor or middle class. Since they believe that government programs to help ordinary people are useless almost by definition, the only way to give anyone a hand is with a tax cut. And yes, the hand they usually extend is toward the wealthy, whose burdens are so crushing that justice demands that lawmakers not rest until they can be afforded relief. But tax cuts are so magical they can help anyone, which is why Republicans been in favor of expanding the Earned Income Tax Credit and the child care tax credit before.

But paying for it by increasing investment and inheritance taxes on the wealthy, like Obama is proposing? Not on your life.

One thing’s for sure: as the economy improves, both parties are now being forced to address the underlying issues of stagnant wages and inequality that have been an anchor around ordinary people’s lives for the last few decades. It’s fair to say this isn’t the debate Republicans want to have, and it’s easy to mock them for their insistence that they’re really the party with something to offer the middle class and the poor. But it’s a lot more productive to just take them at their word and see what they actually propose to do.

So Mitt Romney says he has cast off his previous contempt for those of modest means and now wants to focus his 2016 presidential campaign on the issue of poverty? All right — what are his ideas? If they’re actually worthwhile, he should get whatever credit he’s due. If it’s more trickle-down policies and stern lectures about bootstrap-pulling, then we’ll know nothing has changed.

You can argue — and many will — that it’s pointless for Obama to introduce significant policy proposals like this when he knows they couldn’t make it through the Republican Congress. But what alternative does he have? He could suggest only Republican ideas, but he wouldn’t be much of a Democratic president if he did that. Or he could offer nothing at all, and then everyone would criticize him for giving up on achieving anything in his last two years. If nothing else, putting these proposals forward can start a discussion that might bear legislative fruit later on. Major policy changes sometimes take years to accomplish, so it’s never too early to start. And if Republicans have better ideas, let’s hear them.

 

By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line, The Washington Post, January 19, 2015

January 20, 2015 Posted by | Middle Class, Republicans, Tax Cuts | , , , , , , , | Leave a comment

“Falling Further Into A Hole”: Wage Stagnation Puts The Squeeze On Ordinary Workers

Laurie Chisum works as a manager for a small office-equipment company in Orange County. She puts in about 30 hours a week on the job and spends much of her time at home caring for her mother, who is afflicted with Alzheimer’s disease.

She’s not complaining — she’s thankful to have a steady paycheck. But no matter how hard she works, it feels as if she just can’t get ahead.

“It’s been six years since anyone at our company has had a raise,” said Chisum, 52. “It seems like I just keep falling further into a hole. The price of gas has gone down, but nothing else has.”

It’s a refrain we’ve heard throughout the year: wealth gap, income inequality, wage stagnation.

No matter how you say it, the upshot is the same. The rich are getting richer and everyone else is feeling squeezed.

The wealth gap in this country is now the widest it’s been in decades, according to a report this month from the Pew Research Center.

The median net worth of upper-income families reached $639,400 last year. That’s nearly seven times as much as for those in the middle and almost 70 times what people at the lower end of the economic spectrum are making.

That’s not just a data point. It’s sad proof of a system that grossly favors the rich over ordinary working families — even when the economy is improving.

“Far too many people simply aren’t feeling the benefits of this economic growth,” said U.S. Labor Secretary Thomas Perez. “People are working harder and smarter, but their sweat equity hasn’t translated into financial equity.”

David Neumark, director of the Center for Economics and Public Policy at the University of California, Irvine, said that “people at the top have had phenomenal wage growth,” whereas “people at the lower end of the spectrum have seen their real purchasing power decline.”

Corporate profits are at or near record levels. So’s the stock market. Chief executives are doing just fine, thank you very much. A recent report found that some of the biggest U.S. companies pay their CEOs more than they pay in federal income taxes.

For ordinary working stiffs, the numbers are more sobering. Average hourly wages rose an itsy-bitsy 0.4 percent in November, according to the Labor Department. And this was seen as good news because average wages increased a pitiful 0.1 percent in October and didn’t budge in September.

For the year, average hourly earnings through November rose 1.7 percent, according to the Bureau of Labor Statistics. Since the end of the recession in 2009, they’ve gained about 11 percent.

At the same time, though, the consumer price index — the cost of living — has increased 1.3 percent since the beginning of the year and about 11 percent since the end of the recession.

Wages, in other words, are barely keeping pace with overall inflation. That’s why many people feel as if they’re stuck in a financial rut.

“You wonder from month to month what else you’re going to have to cut back on,” said Chisum, a single mom who also is caring for a grown son with Down syndrome.

Things look even tougher when you tighten the focus on specific expenditures, such as food and rent.

Average food costs have climbed 12.5 percent since the end of the recession, according to the bureau. Average residential rents have risen 12 percent. The average cost of healthcare has jumped nearly 17 percent.

In that context, the 11 percent gain in wages since 2009 means that each of these necessities has taken a bigger bite out of family budgets and has left fewer dollars for other expenditures, such as the occasional restaurant meal or movie.

“There’s no evidence I can see that this is going to change in the near future,” said Edward Lawler, a professor at the University of Southern California’s Marshall School of Business. “These are tough times for workers.”

One key issue, he said, is that labor unions have less clout than they once enjoyed. This denies workers a unified voice at the bargaining table.

Improvements in technology have boosted productivity and allowed employers to limit hiring. And it’s become easy to ship jobs abroad, where people are willing to work for a fraction of the cost of American workers.

All these factors conspire to keep wages down while profits and the compensation of senior managers skyrocket.

Earlier this month, Microsoft shareholders approved an $84-million pay package for the company’s new chief executive, Satya Nadella, making him one of the country’s highest-paid corporate leaders. He’s run the company for less than a year.

Boeing, Ford, Chevron, Citigroup, Verizon Communications, JPMorgan Chase and General Motors each paid their CEOs more last year than they paid in income taxes to Uncle Sam, according to a report from the Center for Effective Government and the Institute for Policy Studies.

A recent study by Harvard Business School found that most Americans believe chief executives make roughly 30 times what the average U.S. worker makes. That was indeed the case in the 1960s. Nowadays, CEOs pull down more than 350 times the average worker.

Chief executives are important people, to be sure. But is their importance to a company 350 times that of their employees? I doubt most people — other than CEOs — would think so.

More effective unions would help, as would programs to give workers the skills they need to compete better in the 21st century workplace.

Chris Tilly, director of the University of California, Los Angeles’ Institute for Research on Labor and Employment, said a key step would be establishing a national minimum wage of $10 to $12 an hour, and then indexing that wage to consumer prices so that paychecks automatically rise with inflation.

“That way you wouldn’t have to wait for Congress to act every year,” he said. “This would be a basic decision that wages would keep up with the cost of living.”

Perez, the labor secretary, also called for a higher minimum wage, plus “strengthening overtime protections” and “ensuring that workers have a strong voice in the workplace.”

A rising tide lifts all boats. At least that’s how we’re told things are supposed to work.

The reality is that the tide is rising in a big way for some, and they’re comfortably sunning themselves on the decks of their yachts.

For most others, that rising tide is more like a stormy sea threatening to swamp the family lifeboat.

We’ll likely hear a lot in the coming year about how the economy is improving and businesses are thriving. Chief executives will point toward fast-rising stock prices as proof that they’re worth every million they’re paid.

And everyone else will try to make their 0.4 percent hourly pay hike go as far as they can.

 

By: David Lazarus, Columnist, The Los Angeles Times; The National Memo, December 29, 2014

January 1, 2015 Posted by | Corporate Welfare, Minimum Wage, Workers | , , , , , , , | 1 Comment

“We Create The World We Expect”: What Happened To Protect And Serve? Cops, Civilians And Guns

If you’ll excuse my descending into cliche, the issue that began in Ferguson, Mo. is moving beyond racism to the present-day penchant of police departments to apply military thinking to civilian life.

This thinking leads cops to expect and insist on instant obedience in any interaction. If they don’t get it, they escalate.

This can naturally take things in the wrong direction, a phenomenon reinforced by the intimidating appearance of surplus military equipment, widely distributed to urban, suburban, and rural departments alike from the Afghanistan and Iraq theaters .

Cops have very dangerous jobs. Anything can suddenly move from ordinary conversation to a life-or-death matter — especially in a country that has more guns than people.

And according to the most authoritative source, the Small Arms Survey, there were least 270 million privately-owned guns in the U.S. in 2007 — an average of 88.9 guns per 100 Americans. Since President Obama’s election in 2008, another 67 million guns have been sold–a total of 337 million guns in a nation with 319.3 million people.

With that many guns out there — Americans are the world’s best-armed people — cops can’t be blamed for assuming that anybody they stop may have one. So taking this approach is probably advisable, assuming the cop wants to live.

But the result has been that cops have been encouraged to adopt the thinking of combat officers. A combat officer’s job is to protect the lives of his men. He does that by killing the enemy. It’s a brutal logic, but appropriate for the circumstances. And it’s not a stretch to say that cops are in combat 24/7 and suffer a form of PTSD, and that this reality probably helps cops to have high suicide rates.

Still, we create the world we expect, and if cops stick to this rationale, we have to expect to see more of these incidents, however you want to label them. Even if Michael Brown’s death can be explained away (I don’t think it can be), Tamar Rice and Eric Garner’s can’t be.

In any event, the fundamental premise of this thinking is badly flawed, because cops are there to protect us, and by and large, ordinary citizens–the people cops mostly deal with–are not their enemies.

Meanwhile, MOTHER JONES has just published an excellent article proving with the available statistics they have assembled that black and Hispanic Americans are much more likely to be shot by a policeman than whites.

The usual objection to statistics like this is the assertion that blacks and Hispanics are more likely to be committing the sorts of crimes that cops encounter. But if we accept that almost all crime is economically-driven, and not an outgrowth of some baked-in ethnic malignity, what they really show is that by and large, the non-white population in this country is poorer than the white population. So it follows that the real issue is likewise economic, since overall, the black and Hispanic populations in America are poorer than whites.

To my mind, if we want to resolve this wave of racially-tinged, indefensible killings of civilians growing out of the militarization of the police — on December 6, Phoenix, Ariz. police shot Rumain Brisbon, an unarmed 34-year-old, because they mistook a bottle of pills for a gun — we have to address how cops are trained, the sort of income inequality that’s been produced by supply-side economics, and the relentless pro-gun drumbeat coming from NRA headquarters.

 

By: Andrew Reinbach, The Blog, The Huffington Post, December 8, 2014

December 10, 2014 Posted by | Guns, Militarization of Police, Police Shootings | , , , , , , , | Leave a comment

“A Naïve View Of Politics”: The Poison-The-Well Myth, And How Politics Really Works

There are certainly some serious critiques of President Obama’s new immigration policy. It could encourage more illegal immigration in the long run. It may be another step toward an imperial presidency, detached from Congress. It definitely could have been executed less cynically, given that Mr. Obama all but admitted he delayed the announcement until after the midterms, in an (unsuccessful) effort to help Democrats on the ballot.

But there is also one critique that’s getting a lot of attention and isn’t so serious.

It’s the “poison the well” argument — the notion that Mr. Obama’s executive action to shield as many as five million people from deportation will prevent a bigger immigration bill from passing Congress and maybe prevent a whole bunch of other legislation, too.

John Boehner, the speaker of the House, and Senator Mitch McConnell, the next majority leader, have both used the phrase “poison the well.” A spokesman for Mr. Boehner said the move by Mr. Obama would “ruin the chances for congressional action on this issue and many others.” While maybe we should excuse politicians for trying to score political points, neutral commentators have picked up the argument, too. It’s one of those ideas that has the aura of sober-minded political analysis.

Obviously, we can’t run the final two years of the Obama presidency multiple times under different circumstances and see what happens in each. So it’s impossible to know for certain how any one action affects the course of events. But there are all kinds of reasons to believe that the poison-the-well theory is based on a naïve view of politics. And understanding why it’s wrong helps illuminate how politics really does work.

Whatever you may think of today’s politicians, they are highly successful people who have climbed to the top of a competitive profession. Most of the time, they make decisions that are in their interests — whether political interests or policy interests. A few notable exceptions aside (like Newt Gingrich’s infamous pique in 1995 over getting a bad seat on Air Force One), they do not make major decisions the way a small child would, based mostly on whether someone else is being nice or mean to them.

If you ask political scientists what they consider to be the biggest misconceptions about politics, you’ll often hear a version of the Nice-Mean Fallacy. The Obama presidency has offered a particularly rich set of examples. It’s true that Mr. Obama and his White House haven’t done a very good job of building relationships with Congress, and it’s true that the administration’s aloofness has probably hurt its effectiveness in some ways.

But consider the recent president whose relationship skills are often contrasted with Mr. Obama’s: Bill Clinton. Many members of Congress really did seem to prefer Mr. Clinton’s personality to Mr. Obama’s. And yet which of the two presidents failed to keep Democrats united on a major health care bill and thus failed to pass one? And which president held onto every single congressional Democrat he needed to pass such a bill?

Were the roles reversed, we no doubt would hear tales about how the gregarious president used his people skills to pass the biggest expansion of the safety net in a generation while the distant, professorial one failed. In truth, congressional Democrats weren’t making decisions based on either Mr. Clinton’s or Mr. Obama’s personality. They were making them based on bigger issues.

The Democratic Party of the early 1990s included more conservative Southerners than the 2009-10 version of the party, for example. The 2009-10 Democrats were also more desperate to succeed, remembering the disappointment of the Clinton bill and probably aware that economic inequality had worsened over the intervening decades. The Democrats stuck together because they believed doing so was in their interest.

Republicans have done the same in the Obama presidency. From the beginning, Mr. McConnell has understood that Republicans could veto Mr. Obama’s promise to be a bipartisan bridge-builder. “It’s either bipartisan or it isn’t,” Mr. McConnell said in 2010, explaining his caucus’s united opposition to the health care bill. No wonder that Republicans didn’t bite when the White House suggested adding medical-malpractice reform to the bill.

Many Republicans voters back this stance. Polls show that most want their leaders to stand on principle rather than to compromise. Democratic voters are fonder of compromise.

The story on an immigration overhaul has been similar. Some Republicans leaders see a bill as in their interests — helping them with Latino voters — and the Senate passed such a bill, 68-32, last year. Yet most House Republicans have philosophical objections and have few Latino voters in their district. House leaders have refused to bring the bill to the floor.

To accept the poison-the-well argument is to believe, first, that Republicans would have passed an immigration bill if Mr. Obama had not acted. This seems unlikely but not totally out of the question: Perhaps more Republicans want to show they can compromise now that they control both chambers, hoping their presidential nominee can win swing voters in 2016. In that case, an immigration bill might be more feasible in 2015 than it was in 2013.

But the poison-the-well theory then requires a second belief, too: That even if an immigration bill were in Republican interests, they would refuse to pass one, out of spite from Mr. Obama’s executive action. This belief seems strangely dismissive of Republicans’ instinct for self-preservation. It also conflicts with the history of both parties.

On the same day in August 1981 that President Ronald Reagan threatened to fire striking air traffic controllers, many Senate Democrats voted for his tax cut, and House Democrats did the same the next day. Mr. Clinton and congressional Republicans, less than a year after impeachment, collaborated on a sprawling bank deregulation bill in 1999. A few years later, many congressional Democrats voted for the Homeland Security Act even as President George W. Bush was calling them soft on terrorism.

In each of these cases, politicians voted with their interests, not their feelings. There is every reason to believe the same will happen over the next two years.

Some of the same Republicans worrying aloud about poisoned wells no doubt understand this reality. But they continue making the point partly because it helps unify the party on a divisive issue. “It’s a way the G.O.P. can achieve consensus,” as Brendan Nyhan, a Dartmouth political scientist and Upshot contributor, says. “They’re internally divided on policy on immigration but agree on a process critique of Obama’s actions.”

Jeb Bush and Marco Rubio may be on one side of some big immigration questions and conservative House Republicans may be on the other, but they can come together on metaphorical well water. Which is to say that politicians generally act in their interests, even when doing so involves pretending otherwise.

 

By:

November 28, 2014 Posted by | Congress, Immigration Reform, Politics | , , , , , , , | Leave a comment

“Plutocrats Against Democracy”: Don’t Let The Bottom Half, Or Maybe Even The Bottom 90 Percent, Vote

It’s always good when leaders tell the truth, especially if that wasn’t their intention. So we should be grateful to Leung Chun-ying, the Beijing-backed leader of Hong Kong, for blurting out the real reason pro-democracy demonstrators can’t get what they want: With open voting, “You would be talking to half of the people in Hong Kong who earn less than $1,800 a month. Then you would end up with that kind of politics and policies” — policies, presumably, that would make the rich less rich and provide more aid to those with lower incomes.

So Mr. Leung is worried about the 50 percent of Hong Kong’s population that, he believes, would vote for bad policies because they don’t make enough money. This may sound like the 47 percent of Americans who Mitt Romney said would vote against him because they don’t pay income taxes and, therefore, don’t take responsibility for themselves, or the 60 percent that Representative Paul Ryan argued pose a danger because they are “takers,” getting more from the government than they pay in. Indeed, these are all basically the same thing.

For the political right has always been uncomfortable with democracy. No matter how well conservatives do in elections, no matter how thoroughly free-market ideology dominates discourse, there is always an undercurrent of fear that the great unwashed will vote in left-wingers who will tax the rich, hand out largess to the poor, and destroy the economy.

In fact, the very success of the conservative agenda only intensifies this fear. Many on the right — and I’m not just talking about people listening to Rush Limbaugh; I’m talking about members of the political elite — live, at least part of the time, in an alternative universe in which America has spent the past few decades marching rapidly down the road to serfdom. Never mind the new Gilded Age that tax cuts and financial deregulation have created; they’re reading books with titles like “A Nation of Takers: America’s Entitlement Epidemic,” asserting that the big problem we have is runaway redistribution.

This is a fantasy. Still, is there anything to fears that economic populism will lead to economic disaster? Not really. Lower-income voters are much more supportive than the wealthy toward policies that benefit people like them, and they generally support higher taxes at the top. But if you worry that low-income voters will run wild, that they’ll greedily grab everything and tax job creators into oblivion, history says that you’re wrong. All advanced nations have had substantial welfare states since the 1940s — welfare states that, inevitably, have stronger support among their poorer citizens. But you don’t, in fact, see countries descending into tax-and-spend death spirals — and no, that’s not what ails Europe.

Still, while the “kind of politics and policies” that responds to the bottom half of the income distribution won’t destroy the economy, it does tend to crimp the incomes and wealth of the 1 percent, at least a bit; the top 0.1 percent is paying quite a lot more in taxes right now than it would have if Mr. Romney had won. So what’s a plutocrat to do?

One answer is propaganda: tell voters, often and loudly, that taxing the rich and helping the poor will cause economic disaster, while cutting taxes on “job creators” will create prosperity for all. There’s a reason conservative faith in the magic of tax cuts persists no matter how many times such prophecies fail (as is happening right now in Kansas): There’s a lavishly funded industry of think tanks and media organizations dedicated to promoting and preserving that faith.

Another answer, with a long tradition in the United States, is to make the most of racial and ethnic divisions — government aid just goes to Those People, don’t you know. And besides, liberals are snooty elitists who hate America.

A third answer is to make sure government programs fail, or never come into existence, so that voters never learn that things could be different.

But these strategies for protecting plutocrats from the mob are indirect and imperfect. The obvious answer is Mr. Leung’s: Don’t let the bottom half, or maybe even the bottom 90 percent, vote.

And now you understand why there’s so much furor on the right over the alleged but actually almost nonexistent problem of voter fraud, and so much support for voter ID laws that make it hard for the poor and even the working class to cast ballots. American politicians don’t dare say outright that only the wealthy should have political rights — at least not yet. But if you follow the currents of thought now prevalent on the political right to their logical conclusion, that’s where you end up.

The truth is that a lot of what’s going on in American politics is, at root, a fight between democracy and plutocracy. And it’s by no means clear which side will win.

 

By: Paul Krugman, Op-Ed Columnist, The New York Times, October 23, 2014

October 24, 2014 Posted by | Democracy, Plutocrats, Voter Suppression | , , , , , , , | 2 Comments

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