The Fading American Middle Class

The Washington Post has been running a series of articles on the fading American middle class. These articles are enlightening. However they are not all surprising. The reality is the American middle class is an endangered species. America is quickly dividing into a society of haves and have nots. This trend probably does not bode well for the United States. If it continues it may actually hasten the sort of liberalism anathema to many so enamored with our current corporate-ocracy.

Is “corporate-ocracy” too strong a word? I don’t think so. I would argue strongly that a government by and for the corporation has supplanted our republican government. There are exceptions. But the safeguards put in place during more liberal times that restrained corporations so they act in the public’s interest have frayed to the point where they are becoming hard to see. If anyone doubts that special interests are firmly in control of our government they need only watch the recent 60 Minutes interview with outgoing South Carolina Senator Fritz Hollings. He laid it all out: money buys influence and as a result the public interest gets short shrift.

“Communications, defense, you got them all – farms, agriculture people and everything else like that … They get their piece of the pie. That’s our problem. Today, you can’t find the real interests of the country.”

It would be tempting to blame the decline of the middle class entirely on American corporations. And certainly they share a lot of the blame. For the last thirty years corporate America has worked hard to marginalize labor unions. They are now at the point where they hardly exist anymore. Even when they exist unions are increasingly impotent. Corporations have options now they didn’t have before, such as the ability to quickly outsource jobs to countries where pesky labor laws don’t exist. And Congress has aided and abetted this process. It has made it easier for a company with pension plans to change them so that workers receive less in the way of pensions. The better companies throw newer workers into 401-K plans instead of defined benefit plans. Some of them convert all their workers to 401-K plans. Others have used legal shenanigans to raid pension funds to prop up their share prices. And if the corporate pension fund goes bankrupt, it’s not a problem for shareholders. The costs are foisted on the taxpayer, that is the Pension Benefit Guarantee Corporation. Increasingly, if companies offer health insurance benefits at all then workers are asked to pay larger shares of premiums and higher deductibles.

The result is that marginal cost of living raises are more than eaten up by increased costs for health insurance. This cascades into a decline of the standard of living for middle class people. Increasingly these costs have the effect of dumping people out of the middle class. A labor force that is increasingly disposable exacerbates the situation. Careers long thought secure are now often easily outsourced. Workers that used to be able to get benefits are often now employed as temporary employees or as contractors, if their work is not outsourced to some foreign country.

It is hard for many of us, particularly younger workers, to grasp the magnitude of the change that has occurred over the last 30-40 years. Consider this: in the 1960s a single breadwinner could support the middle class lifestyle for a family. For example a bus driver could afford to buy his own house and car, keep the wife at home and send the kids to college. He usually didn’t need a second job. What’s the situation today? To live a middle class lifestyle a family requires at least two wage earners. The bus driver is likely living in an apartment somewhere, and is probably working another job. His wife is pulling a couple jobs too. It’s increasingly unlikely his family has health insurance. They are precariously holding on to their middle class existence. One lost job or one huge medical bill and their lifestyle is blown away.

The Washington Post talks about the $17 an hour job as typical middle class wages. I laughed when I saw this number. Exactly who can afford a middle class existence on $17 an hour? It can’t be done in my neighborhood, that’s for sure, unless the spouse is also earning $17 an hour. And those kind of wages likely mean they are living in an apartment, or perhaps a modest town home, not some single family house with a two car garage.

And what sorts of jobs are paying this kind of money? I can think of some. Clerks perhaps, mechanics and plumbers. Many of these jobs are also the most vulnerable to outsourcing. What does one do when they lose that $17 an hour job that has been outsourced or made obsolete? It’s possible but unlikely that they will find another job at this wage rate. Instead, as the Post documents, they are working two jobs somewhere to maintain the same income level. But if they had benefits before it’s unlikely they have much in the way of benefits now.

Working two jobs instead of one they live an increasingly precarious and exhausting life. The smartest ones may have anticipated their obsolescence and went back to school. But as many computer programmers found out in the last few years there is no guarantee that the money invested in a new career will ever pay off. In our modern world the uncertainty of maintaining any job is much higher.

And so the middle class slowly disappears. Manufacturing moves overseas. Machines handle more farm jobs. Computer repair people find they aren’t needed because machines can be replaced for less money than it takes to fix them. The winners are those who are born into money or can simultaneously be savvy, intelligent, multitask and have connections. To sustain the middle class lifestyle it is no longer sufficient to have a trade. You must continually reinvent yourself. You must be a shrewd businessman. You must do your market research. You must find a particular niche. You must network ruthlessly. In short this new Darwinism requires a combination of skills never needed before. Not all can cope with the complexity and demands of such changes. So they fall through the cracks. They spend their days as cashiers at Wal-Marts and their nights at a second job, and their weekends at a third job.

And who is benefiting? Perhaps by shopping at Wal-Mart in their few off hours they are saving a few bucks. Clearly stockholders are benefiting. Their share prices are increasing. But where is this wealth really coming from? In effect we have decided that in America that we will transfer wealth by screwing the hard working earnest American laborer tighter and tighter. The money will largely go to those who had wealth to begin with, making them increasingly wealthy. And that’s how the middle class disappears, slowly, until one day it is gone entirely. By that time it will seem natural and we’ll all smile and say we are happy because we believe in the Republican Party, and the Republicans are good.

How long can this go on? I would hope not much longer, or the character of the country that I grew up in will be changed irretrievably. I often feel like our future will look a lot like Brazil’s. It seems that the stranglehold by the corporation on our democracy is virtually complete. But perhaps the corporation has pressed its advantage too far. Perhaps like Howard Beale the American worker will no longer play the patsy and demand a government of, by and for the people again.

But this seems naive. Apparently we are a nation of sheep. We’ve bought into the whole corporate bullshit and we’ve wrapped it around God and the American flag. We can’t tell them apart anymore. Why are the people who are getting screwed the worst pushing for their own obsolescence and poverty?

There is a solution to this madness. It’s called electing people who represent your interests, and not the special interests. It remains to be seen if Karl Rove can keep sufficient numbers of Americans ignorant of what we are in effect doing to ourselves.

Just Say No to Obscene D.C. Baseball Stadium Subsidies

Oh, the audacity! Linda Cropp, the swing vote on the DC City Council, managed to convince a majority of the council that Major League Baseball should not be invited into Washington D.C. unless private funding can be found for half of the cost of the new proposed stadium along the Anacostia River. Rather than have D.C. taxpayers foot virtually the entire cost of a new stadium (conservatively estimated at $440 million dollars, and which could be as high as $614 million according to a Washington Post analysis) Cropp had the guts and good sense to insist that D.C. taxpayers should not be entirely liable for the cost of the stadium. From Wednesday’s Washington Post:

Yesterday, Major League Baseball said it would immediately put all Washington Nationals business and promotional activities on hold and, upon request, refund deposits on season tickets. It seems unlikely that the Montreal Expos will become the Washington Nationals in perpetuity without an agreement to pay for a new stadium.

Which, as Cropp makes clear, would be unfortunate, but perhaps necessary. Someone has to be responsible for the District’s treasury, she says. Someone has to say no if the deal’s a bad one.

Cropp is right. Somebody has to look at the District’s ledgers. If this subsidy is added to D.C.’s expenses something will have to give. D.C. doesn’t print its own money. It speaks highly of Cropp that she had not just the courage to speak up but to forcefully cast the swing vote to say this is an outrageously bad deal for District of Columbia taxpayers. Yes, it is.

First, it’s not like there isn’t already an existing stadium readily available. Robert F. Kennedy Stadium sits east of the Capitol and is unused for most of the year. Perhaps before building yet another stadium for another team the team should first demonstrate that it can attract the number of fans needed to support an expensive new stadium. Meanwhile, RFK stadium could do well with modest modifications.

But Major League Baseball is feeling pompous. Right now it is refusing to even consider amending its “deal” with D.C. even though, of course, the deal had always been subject to approval by the D.C. City Council. Never mind that other jurisdictions have attracted Major League Baseball without putting the entire burden on taxpayers.

And it’s not like the city of Washington D.C. is awash with extra money. It already has some of the highest taxes in the country, much of it due to the inadequate subsidy it receives from the federal government for its services. In addition D.C. is prohibited from enacting revenue enhancing measures like commuter taxes used by other large cities such as Philadelphia. So D.C. residents have to pay high taxes and this “deal” would likely mean even higher taxes. Sales taxes in D.C. are 5.75%. Gasoline is taxed at 20 cents a gallon. There is a $1 a pack tax on cigarettes. Income tax rates are also astronomical: 7.5% on income over $10,000 a year and a whopping 9.5% on income over $30,000 a year. (By comparison, in Virginia’s top rate is 5.75%.) No wonder the suburbs are booming and population is declining in D.C.

And who would attend most of these baseball games? It is unlikely that with a per capita income of $28,000 (1999) many residents of D.C. will be attending. It’s going to be tough to afford $50 per game baseball tickets. Most patrons will be from the wealthier suburbs, if they decide to bother with the hassle of commuting downtown in the first place.

Major League Baseball wants all the benefits of an active franchise with none of the costs and certainly none of the financial obligations. It’s time to just say no to such an arrogant organization. D.C. managed to attract professional hockey, basketball and football teams without having to build them special stadiums. The Wizards and the Capitals do fine in the MCI Center. The D.C. government paid only $50M for that $175M structure. The MCI Center seems to be in fine financial shape. And the Washington Redskins paid for their own stadium in suburban Maryland. Why should D.C. taxpayers now give carte blanc to Major League Baseball?

The fact is that Major League Baseball probably needs D.C. more than D.C. needs Major League Baseball. The demographics for the D.C. metropolitan area are a marketer’s dream. Aside from D.C. itself the surrounding area is highly educated and affluent. The federal government provides a solid financial base that means the area is likely to withstand economic downturns, as it has repeatedly demonstrated. We already have professional hockey, basketball and football. A well marketed team is much better positioned to thrive today than when the Washington Senators played. When the Senators left Washington it was more of a sleepy town than a major metropolitan area.

I would hope that Linda Cropp and the D.C. City Council will stand fast to Major League Baseball. If Major League Baseball decides to host elsewhere that is their privilege. Private money for half of the stadium could be found in time. If not we won’t really feel the loss of Major League Baseball. Baltimore is still within commuting range if we get the baseball itch and we have plenty of other professional sports locally to enjoy.

The Return of “Vietnamization”

Those of us of a certain age remember the Vietnam War. While I was a youth at the time I do remember well President Nixon’s policy of Vietnamization. What it amounted to was a gradual withdrawal of American forces from South Vietnam. Our forces were to be replaced by well-trained and motivated South Vietnamese Army soldiers. Our withdrawal policy was political in nature. It had nothing to do with the actual facts on the ground, but had everything to do with an American public sick of our involvement in Vietnam War that showed no sign of ending. The policy of course failed spectacularly. The images of our embassy personnel being airlifted from the roof of the American Embassy in Saigon are almost burned into our national consciousness.

President Bush is making noises like he’ll do something similar to Vietnamization shortly after the elections in Iraq scheduled for January 30th. Indeed columnist Robert Novak suggested that Bush is planning to get out of Iraq altogether during 2005. Perhaps Karl Rove believes a face saving withdrawal is in the long run better for Republican prospects than another ugly Vietnam-like ending. If so it is based on the realization by sober Republicans that the Iraq war is, as I suggested long ago, unwinnable.

But I suspect Novak is probably wrong on this one. I don’t think our troops will beat a hasty exit from Iraq in 2005. But I do think that the political pressure will continue to build to “bring the troops home”. A convenient excuse may be needed to withdraw. Iran may provide one. Bush might decide the United States have bigger fish to fry and that while we would like Iraq to be free of civil strife, we accomplished our main goal. And what was our goal? Originally it was to find and confiscate weapons of mass destruction that we just knew were in Iraq. Of course when the facts on the ground gave lie to Bush’s claims Bush morphed it into freeing the people of Iraq from a brutal dictator.

I do find it interesting that General Abizaid suggested in the Washington Post recently that the role of U.S. forces in Iraq may change soon to one of primarily helping the Iraqi National Guard become self sufficient. This was the same strategy we used in Vietnam that failed so miserably. On paper the South Vietnamese Army looked very impressive. It had hundreds of thousands of troops. The U.S. government subsidized it to the tune of billions of dollars. We also provided extensive training and logistical support. And yet the North Vietnamese Army and the Vietcong won. Why? The North Vietnamese had the will that the South Vietnamese did not. In some years during that war more than a hundred thousand soldiers per year were disserting from the South Vietnamese Army. While this is not of the same magnitude as with the Iraqi National Guard and the Iraqi police the trend is the same. With each successful attack by suicide bombers against Iraqi forces more Iraqi forces just stop showing up for work. They rightly figure it is not worth their lives. Just today the police chief of Samarra resigned after guerillas attacked his home.

Since the South Vietnamese experience suggested this approach did not work, it is reasonable to assume the same tactics won’t work in Iraq either. We’ve been trying and failing to bolster the Iraqi army and police since we won the war last year. And the members of their army and police keep disserting. It seems unlikely that we will now succeed where we have so far failed. And it is naive to expect that by having elections things will calm down. The battle for control of Iraq is in reality just beginning. It will continue for many years, if not decades, after we leave. Saying Iraq will become stable does not make it so. The reality on the ground will belie our inflated expectations.

The Ugly World of Grover G. Norquist

Grover G. Norquist is the founder of Americans for Tax Reform. He has made it his mission to radically reduce the size of governments. Norquist is not talking about cutting a little fat here and there. The cuts Norquist is talking about would make even a die hard Libertarian blanch. He wants to shrink government “down to the size where we can drown it in the bathtub.” (2000). He also actually said the same year:

Cutting the government in half in one generation is both an ambitious and reasonable goal. If we work hard we will accomplish this and more by 2025. Then the conservative movement can set a new goal. I have a recommendation: To cut government in half again by 2050.“(2000)

So it should be no surprise that Virginia has come under into his scope. And of course he has to take dead aim. From today’s Washington Post I learned:

Anti-tax activist Grover Norquist has begun mailing to Virginia residents a “Least Wanted” poster that features the state lawmakers who voted for a $1.5 billion tax increase during the 2004 General Assembly session. The poster and an accompanying letter urge the ouster of the representatives in the next election.

In Norquist’s book if there is anything worse than Democrats raising taxes then it is Republicans raising taxes. Earlier this year the Virginia legislature (currently dominated by Republicans) modestly raised taxes. The sales tax in Virginia, one of the lowest in the country, went up half a percent for most goods. Our tax on cigarettes, the lowest in the nation, went from 2.5 cents per pack to a still extremely modest 20 cents a pack. A few other minor tax increases also were enacted into law. I was one of the many people shocked that our Republican legislature agreed to the tax increases. But I was not shocked in a bad way. I was shocked that our Republican legislature actually did the right thing.

Since the economy went sour Virginia had been on increasingly precarious fiscal ropes. It spent its surplus pretty quickly. It either denied teachers raises altogether or gave them tiny increases that didn’t keep up with the cost of living. Funds for new road building pretty much dried up. Even funds to keep the roads we currently have maintained were reduced. Tuitions at our public universities went through the roof. But despite all this obvious pain and the fact that the dollars could simply not stretch anymore to cover even basic services, I still bet that our legislature would forego tax increases. After all many of our newest members had come into office decrying even the idea of a tax increase.

But unlike the Federal government there was no printing press the Commonwealth could use to crank out new money. With its accounts in precarious positions and projected deficits looking increasingly ominous in 2004 our legislature finally figured it out. Apparently money doesn’t grow on trees. Apparently if we want to fund services we actually have to pay the market cost for them. And apparently the citizens of the Commonwealth consider such things as roads, prisons, public safety and education to be essentials of state government, not frills. The cuts had become tangible and painful. Even here in Fairfax County state cuts to education caused real problems. Classroom sizes increased. With raises given out in such a miserly fashion our teachers were shopping around in other, better funded school districts. Vitally needed plans to widen highways like I-66 were dropped. The pain of budget cuts, abstract to many taxpayers, became quite tangible. And sufficient numbers of us pressured our legislature to take the obvious steps needed to fund basic services.

So some Republicans did a very brave thing: they voted in the best interest of the state instead of their own short-term interests. They looked at the growing red ink, weighed the likelihood of an economic recovery and modestly ($1.3 billion in all – hardly more than what my county spends on its school budget in one year) raised taxes. You could hear the sighs of relief across the Commonwealth. As the Washington Post also reported most people did not even notice the tax increases. It felt as painless as it was.

Such genuine bravery by our Republican colleagues though must have really raised the hair on the back of Norquist’s neck. Now he and oxymoronically named Virginia Club for Growth are busy sending out their mailings of Virginia’s Least Wanted politicians. They want these Republican scalps. They feel badly burned.

Never mind that business leaders across the state, who know true growth from a faux growth, were the first ones to call for the tax increase. Businesses don’t like to pay taxes anymore than the rest of us. But they also know that a good, sound economic infrastructure doesn’t just happen. It requires mutual collaboration between businesses and government. If the roads are not there then their employees are wasting hours in traffic instead of working. And their deliverymen are squandering corporate money burning hydrocarbons in stop and go traffic instead of efficiently delivering the goods. And they know that if the schools near their businesses are not top notch then the top tier employees they need are going to try to work some place where they are.

Norquist and his minions see none of this obvious synergy. Their mission has nothing to do with reality: it’s all about ideology. They feel that taxes are too high, government is too big and they don’t like it. With their meat cleaver like approach they simply don’t give a damn about whom they hurt. If we have to release half the people in our prisons to cut the government size in half, so be it. If public education has to go down the tubes, it’s not a problem. They apparently feel that mothers should home school their kids anyhow, or parents should place their children in private schools. At its root this so-called “Club for Growth” it’s all about rampant, Ayn Randish “objectivism” selfishness.

They don’t care about the detritus that would result from their actions. They just want the money. Never mind that if the world were ordered they way they want then when they need to be hospitalized that there likely wouldn’t be enough nurses around to take care of them. Here’s a clue Norquist: if people can’t get a basic education then they won’t be positioned to go into nursing school. Instead they’ll be living on the margins, probably in poverty and filth. And amazingly roads don’t build or maintain themselves. The companies that maintain the roads actually demand to be reasonably compensated.

I have seen your ideal future. I found it in the Philippines in 1987. It is a society with almost no middle class. There are the rich (few in number) and there are the voluminous poor. Without the tax base to support it there are few constraints against businesses or people. So they throw their raw sewage into the rivers. They drive around in dilapidated cars, if they can afford them at all, spewing unfiltered exhaust into the air. Without a public education system their children don’t end up in parochial schools. Instead, the children run around on the streets getting into petty crime and grubbing for money. Survival for a woman often means surrendering her body to strangers for pesos. Survival in general there means markedly lower life expectancies, polluted air, polluted waters, long hours of work, and little likelihood of moving out of poverty.

This is the kind of state and country I would live in if you and your friends had your way. It would be an uglier, more divided, more crime ridden and thoroughly awful sort of place. The fact that we don’t have this society is because after thousands of years of trying it and realizing the noble-serf thing didn’t work, we became enlightened. We chose to be a civilized society and give more of our money in the form of taxes, not just to maintain a common infrastructure, but also to ensure that every person has an equal opportunity at life. And because ordinary people do have an equal chance we have a vibrant economy and a generally healthy, happy and prosperous society. Progressive taxation has been a win for everyone, even you and your Club for Growth. Without this government directed progress that you disdain you would most likely be scraping by for a living, not pressing for insane and radical cuts to our government.

Thankfully Virginians are becoming enlightened again. But you are not. You and your kind have devolved into some sort of bizarre medieval groupthink. When I see a brave people like Virginia State Senator John Chichester speak out for modest tax increases — simply to ensure that Virginia stays a state with some class — I feel more inclined to vote such Republican. Why? Because I vote for politicians who are grounded in the real world. You are not in the real world. You inhabit some sort of bizarre fantasy universe. I expect that when campaigns start again in earnest I will be doing something unusual: sending money to my Republican friends in the state legislature who showed genuine courage and leadership in voting for needed tax increases. Any self-serving twit like you can act in their myopic self-interest. But increasingly Virginians see you and your kind as part of the lunatic fringe. Thankfully we have a tradition of fiscal responsibility in our state. I don’t think that we’re going to let you and your kind devolve us into another Louisiana or Alabama.

Is Bush Channeling Captain Kirk?

Captain Kirk and President Bush -- Two of a kind?

The first episode of Star Trek aired on NBC Television on September 8th, 1966. The man who would become the 43rd president of the United States, George W. Bush, was 20 years old. I don’t know where he was on that particular day. But I have to wonder if the 20-year-old George W. Bush tuned in to watch Star Trek. I also wonder what he thought of the show. I wonder in particular what he thought of Captain James Tiberius Kirk of the USS Enterprise.

I mention this because I have been wondering if George W. Bush has been channeling James T. Kirk. The more I think about it the more sense it makes. The future Captain/Admiral James T. Kirk was born, according to his creator Gene Roddenberry, in Rivertown, Iowa. In one of life’s little irony’s William Shatner recently visited the town. But spiritually Kirk is no farm boy from Iowa. James T. Kirk is a Texan through and through.

James T. Kirk is also obviously a Republican. After all he did not command the USS Progressive, or even the USS Constitution. Kirk commands the USS Enterprise. A deeply pragmatic and lusty man, Kirk believes in drinking deeply from life and taking big chances. If he were to wear a hat you can bet it would not be a ten-gallon hat, but the twenty-gallon variety.

I imagine the 20-year-old George W. Bush in the family den watching Star Trek. I imagine him feeling hamstrung by his demanding parents. I imagine him fantasizing about how wonderful life would be like if he were in charge and were free to do things his way. I wonder if James T. Kirk mesmerized him. After all nothing fazed Kirk, not even phaser fire. “I can do it!” was his motto. Time after time he did indeed do it. With the help of Hollywood hacks you could bet there would be a Corbomite Maneuver in almost every episode. Good ol’ American guts and determination won the day pretty much every week.

Of course at the time the United States was embroiled in Vietnam, a debacle that in time proved its pointlessness and futility. But in 1966 we still believed we would win the war. After all at that time the United States had never lost any war it had engaged in. It was just a matter of time before the Commies would be put in their place. Watching Star Trek the parallels were obvious. The Klingons were the Russians and the Romulans were the Chinese. In a way the anxiety of the 1960s permeated the scripts for Star Trek. James T. Kirk showed us that the United Federation of Planets/America could triumph every time. With sufficient determination, spittle and daring Kirk (occasionally helped by Spock, Bones or Scotty) would win the day. It was five years of course after Star Trek went off the air that the Vietnam War finally devolved into our sad little exit from the roof of our embassy in Saigon.

The United Federation of Planets had this lofty idea called the Prime Directive. As you probably know it prohibited UFP members from interfering with the culture of a planet. It also prohibited giving emerging civilizations any inkling that there was this large, friendly, Republican cosmic government out there keeping the universe safe from Klingons, Romulans and assorted galactic nasties. Clearly the Prime Directive irritated Kirk. Time and time again he ignored it or gave it lip service. Prime Directives were good in theory but made for boring TV. Shows had to be wrapped up in sixty minutes, minus commercials. If my memory serves me right the only time Kirk was truly put in his place was in the episode “Errand of Mercy”. In that episode the cosmic overlords told the Klingons and the Humans they had to play nicely with each other or they would get permanent time outs.

Most likely watching Star Trek with his fraternity boys was a whole lot more interesting than getting Gentlemen’s C’s in history at Yale. Granted being president of Delta Kappa Epsilon and hanging out in the secretive “Skull and Bones” society must have fatigued the man. But I bet the fraternity found time every Thursday night to watch the chronicles of James T. Kirk and crew.

What would James T. Kirk have done as president? My bet is that he would do pretty much what George W. Bush has done. Kirk was never one to study the details of an issue. He left those things to Mr. Spock (Condoleeza Rice?) who was his prefrontal cortex. When he needed someone to confide in he looked to Dr. Leonard McCoy (“Bones”, Dick Cheney?), an older father figure type. But mainly Kirk acted out of instinct, cleverness and bravado. He sliced and diced his way through galactic politics and struggles. It all came out well in the end thanks do his gambling spirit, his sense of daring do and the scriptwriters.

One thing Kirk didn’t like was anyone questioning his judgment. He had a crew full of yes men. (Let’s also not forget the yes women in short skirts. In “Mirror, Mirror” he even had a whore, er a “Captain’s Woman”.) Everyone on the good starship adored and respected him. No one questioned his judgment. They knew Captain Kirk could pull them out of any predicament, no matter how wild or how poor the odds. Similarly the Bush White House is staffed with loyalists who ruthlessly hold to the message of the day and give unflinching and unquestioned support. This works well because the Bush White House does not tolerate dissent anyhow. You were either with or against Jim Kirk and you are either with or against George W. Bush. The red shirts died regularly but his closest advisers of course remain unscathed.

Alas, if the real world were only more like Star Trek. If only every nasty problem could be fixed in sixty minutes. If only cleverness, ingenuity and good ol’ Texan spunk could solve every problem. Captain Kirk has evolved into a mythical American legend. But he must embody traits we consider to be endemic to the American people. It seems like we have put the spirit of James T. Kirk in the White House. I suspect the good liberal Gene Roddenberry is spinning in his grave at the irony of his accomplishment.

The Message of the Youth Vote

Young adults, who seem to vote in fewer and fewer numbers in recent years, reversed course significantly in the 2004 election. At first blush the statistics don’t suggest very much. In 2000, the youth vote made up 16.4% of the total vote. In 2004 the youth vote was 18.4% of the vote.

But a look behind the statistics tells a different story. It’s not a matter of percentages; it’s a matter of turnout. In 2000, 16.2 million votes were cast by young adults. In 2000 this number rocketed up to 20.9 million votes. Do the math. That’s means that in four years nearly 30% more youth went to the polls than in 2000.

But it means more than just this. In 2004, 4.7 million new youth voters went to the polls. These are 4.7 million new voters out of a total voter pool of 115.9 million voters. Put another way, 4% of the voters in 2004 were new youth voters. Kerry captured 54% of the youth vote (compared with 48% of the youth vote for Gore in 2000.) Overall the youth vote added 3.51 million votes for the Democratic presidential candidate in 2004 compared with 2000.

The statistics only looked bad at first blush because turn up for all groups was up substantially this year. But among all the groups that voted the youth vote grew the most. Arguably it was because they had the furthest to rise. But perhaps they turned out in such force because they had such a stake in the election. It’s unlikely many of the older voters will have to fight America’s wars against terrorism.

The question now becomes whether this was a one-time event or whether we will see in future elections more and more young voters. And toward which party will they tilt? It is unlikely the evangelical vote will vote more red in 2008 than they did in 2004. But the youth voted more Democratic in 2004 than in 2000. If this is a trend then the youth vote might well decide the next presidential election. And since the youth vote tends toward the Democrats it might be premature for Republicans to think they have a permanent lock on any branch of government.

Only time will tell if the youth vote will continue to grow faster than other voting groups. But young adults are picking up the voting habit. For young adults voting is becoming mainstream. Having done it once it is reasonable to think they would be inclined to do it again. If they carry their Democratic leanings into midlife and beyond the country’s future is blue, not red.

The chickens are still coming home to roost

Lost in their euphoria over their victory on November 2nd Republicans are likely missing the bigger picture. Systemic problems don’t go away just because an election is won. Bad policy wreaks bad results that can’t be swept under a rug. By reelecting Bush, Americans have put the onus back on Bush and Republicans to fix problems that they created.

The most visible problem will be the quagmire in Iraq. We can expect a new application of American force in insurgent strongholds like Fallujah in the near future. But I don’t believe the fundamental situation in Iraq will change. I bet in November 2008 the situation in Iraq will be about the same or worse than it is now. The Iraq conflict requires new thinking yet the Administration has no plans on changing course. The fight against insurgents in Iraq is still being fought with 20th century methods. With insurgents refusing to wear uniforms it becomes impossible to tell friend from foe. Insurgents can slip out of places like Fallujah by masquerading as civilians fleeing for their lives. We can kill whatever insurgents choose to stay and fight. But these tactics won’t make much of a difference. As soon as the civilians are let back into these cities the insurgents can trickle in unnoticed, pick up their rifles, reopen their secret stashes of mortars and other explosives and go at us again. As I’ve stated before Iraq is an unwinnable war. Kerry would have been no more successful at ending it to our satisfaction that Bush will have. For some of us Iraq sure looks like the 21st century’s version of Vietnam. Four more years should convince even the most die hard skeptic.

Energy will cost more in the next four years. We may see periods where prices drop below $2 a gallon for gasoline but in general the days of cheap energy are behind us due to emerging economies in India, China and Indonesia. Barring a worldwide recession demand will increase. And petroleum supplies will not improve very much. As a result prices will rise or stay high. The waves of higher energy costs will continue to be felt throughout the economy. While it may not drive us back into recession the higher energy costs will continue to put a damper on growth. Our nation must find better ways to cope with rising energy prices. There is little in the Bush Administration’s approach that suggests they have much of a clue on how to really solve the energy problem. Even tapping oil that may exist in the Arctic National Wildlife Refuge would only increase our supply of oil by a tiny amount. We need to find new technologies for a post oil era. But the Bushies still think the future will allow us to drive our SUVs at dollar a gallon prices.

The Bush Administration talks about reducing the deficit in half during the next four years. That’s all it is likely to be. The most likely scenario: deficits will continue to increase over their current levels. Neither the Republican controlled Congress nor the Bush Administration has demonstrated any fiscal discipline. There is already talk of more tax cuts. In addition Bush has a plan to allow younger workers to invest part of their social security withholdings in stocks and bonds. However this diversion of cash from the social security system simply exacerbates the deficit since the government is currently borrowing from the social security trust fund.

Of course this assumes that people and institutions continue to be willing to loan the U.S. government money. In August a Treasury bill sale attracted no international investors. While this may be a fluke it is worrisome if it recurs periodically. If foreign institutions are unwilling to lend our government money then interest rates for government bonds will have to go up. If they go up too high we’ll be perceived as a “junk bond” country and the flow of foreign capital might stop. But if government bonds need higher interest rates in order to attract investors then the private sector will have to match the rate increases to attract the capital it needs. If government and private industry cannot attract foreign capital then growth is likely to falter or stop.

Health care costs are likely to continue to outpace inflation. More Americans will be uninsured. Drug prices will continue to go through the roof. As usual the Bushies “solution” doesn’t really solve the problem. Their solution is medical savings accounts (MSAs). It fails the common sense test. Most Americans are already living beyond their means. Each year Americans put more debt on their credit cards. Americans simply don’t have money to squirrel away into MSAs. Try to imagine a middle class family earning $40,000 a year putting away thousands of dollars into these accounts. How likely is that? Instead this family will be trying to make their mortgage payments and keep up with the increases in energy costs. In addition even with MSAs people still need health insurance; only the very rich can afford to self insure. MSAs are a utopian Republican idea, not a serious solution to the health care problem.

Hopefully sometime in the next four years the economy will finally perk up enough so that all those who lost their jobs in the Bush recession will have found new ones. But currently wage increases are not keeping pace with inflation. Also there are millions of workers who have been outsourced (like my wife) or downsized. They are making a fraction of what they made before. Bush was the first president since Herbert Hoover to lose jobs in his first term in office. Between spiraling deficits, the war in Iraq, potential terrorist attacks inside the United States and possibly higher interest rates the sustained recovery creating tens of millions of new jobs such as we saw under Bill Clinton are unlikely.

I am a big believer in karma. I think it exists on the macro level too. As much as I don’t like the idea of another four years of Bush and Republican domination of Congress unless both show leadership hitherto undemonstrated it will be impossible to dodge accountability during the next four years. The silver lining to Kerry’s defeat is that Kerry cannot be held accountable for the Bush and Republican screw-ups. Given Bush’s mess Kerry would have likely been a one-term president anyhow. Trying to fix their massive problems in the next four years would defeat anyone. The Republicans have made their bed. Let them have their brief moments of gloating. My sense is that they have created problems beyond their control.

Election 2004 Postmortem

The body is not quite cold but it is definitely cooling. If I were John Kerry and John Edwards I would not necessarily concede defeat, but I would be preparing the concession speeches.

This election was hard for anyone to call since polls were almost always within the margin of error. I stepped out on a limb in a number of entries and predicted Kerry would win the election by a comfortable margin. In June I suggested a 5% spread. Instead it looks like Bush has about a 3% margin on the popular vote. It remains possible that Kerry could win the electoral vote, but it seems very dubious. There would be a certain karmic rightness if Kerry won the electoral vote and lost the popular vote, since it would essentially cancel out the 2000 election and restore a certain sense of balance and fairness.

But yesterday was clearly not what the Democrats hoped for. In addition to likely losing a very narrow presidential race, Republicans picked up 3 seats in the Senate and sent Tom Daschle home permanently to South Dakota. In the House although a number of contests have yet to be decided it looks like Republicans picked up four seats. The Republican lock on Congress looks like it will continue and extend itself for some time.

In the Retro vs. Metro war, Retro seems to have won this round.

In trying to understand the election what puzzles me the most is how Bush could possibly win. In any other election he would have been shown the door due to his dismal performance. So I felt it was a safe bet to say he would lose. The key I think was turnout. I think that people were voting this time not so much for candidates but as a statement of their values. I really doubt that all that many Bush supporters are truly enthusiastic about the guy. I never was terribly enthusiastic for John Kerry. But I did care about projecting my values and the values of my “clan”: internationalism, peace, respect for the environment, etc. The same was true for the Republican base. When it became apparent that the Democrats were waging a very effective get out the vote effort it became clear to anyone who cared to get involved. So both sides turned out their bases in droves. That was a wrinkle I did not expect and I suspect was the main reason my predictions were off. I need to keep this lesson in mind in the 2008 election.

Personally both my family and myself are very scared. To us George W. Bush has not just been a bad president; he has been a reckless president. Now we get to look forward to four more years of the same. If the past is any guide it won’t get better.

But karmic forces remain at work. Bush cannot undo the damage he has done. Iraq will continue to be a quagmire that will defy solution. He will be fortunate if his popularity in his second term ever rises above 50%. The fundamental problems he introduced remain and the way he has tried to solve them has exacerbated our problems.

So if there is a silver lining to this it might be that in 2006 voters will be a lot more motivated to change directions. Only time will tell how long it will be before we wake up as a nation and acknowledge the disaster that is the presidency of George W. Bush.

Missing Bubba

We all knew there was something disingenuous about Bill Clinton. He wasn’t quite what he appeared. While he didn’t have Richard Nixon’s shiftiness there was always the sense that there was a lot more to Bill Clinton than met the eye. What we saw was the tip of his iceberg. Only occasionally and with great reluctance would he reveal his seamy and complex underside.

Clinton was the master politician of his generation. While he spun in circles his first few years in office he eventually found sure footing then went into a fast sprint. Despite his personal scandal by the time he left office I (and 57% of the country) was genuinely sad to see him leave. I am even sadder now after four years of George W. Bush. Loathe him or love him Bill Clinton was one of us. You knew his tastes were as pedestrian as yours. The three hundred dollar haircuts and the omnipresent blue suits were a veneer. We knew it. The real Bill Clinton was a guy who could revel in a Big Mac, super sized fries and a giant Coke. He was an unwashed heathen and a sinner just like us.

Yeah, we knew. Here was a guy with an amazing intellect but who was still somewhere deep inside a wounded boy from a broken home. Our instincts told us that he had not quite surmounted these early problems but we wanted to believe he had made it anyhow. He certainly gave the appearance that he had overcome all the odds. After all he was twice governor of Arkansas, ran the National Governors Association, was a stellar graduate of Georgetown and Oxford Universities and a Rhodes scholar. Not bad accomplishments for a guy raised largely by his mother and around abusive men for much of his childhood.

While he was president you held your nose when you heard rumors of his personal life. But it was hard to hate him too much because Clinton brought results where many before him had failed. Clinton may have been part weasel but he was a damned effective weasel. He was and still is passionate and convincing. He is glib. He rarely reads from a prepared speech. It seems he has gift of on the spot eloquence.

Bill was and is a passionate guy too. Women were apparently just one of his passions. If Bill Clinton has a true love though it is not women, it is politics. His energy seemed boundless. He reputedly survived on a few hours of sleep a night. He was often up late reading and often up early doing more reading. He knew all sides of an issue because he had read all of them. He is a natural debater and can articulate with conviction any point of view he wants.

Bush tries to paint Kerry as a flip flopper. Clinton was the flip flopper to end all flip floppers. Clinton was a ruthlessly pragmatic person. He was not amiss to changing his opinions in a moment if it seemed public direction was going a different way. He realized that to effectively govern he had to be with the majority. So if he wasn’t he would often tune his positions to ensure he stayed with the majority. This of course drove the Republicans nuts because above all but ideology they value consistency. But Clinton cared more about actually getting things done than the feelings of those who could not deal with ambiguity.

And while Clinton was not amiss to helping out his pals and cronies he at least was sensible enough to do it discreetly. It did not become the focus of his administration. Instead he became one of these rare presidents who truly did his best for the country. He schmoozed, he backslapped, he persuaded, and he occasionally lectured but he got most of what he wanted. Under Bill Clinton the country moved from record deficits to record surpluses. He paid down the National Debt, the first president to do so in more than a generation. In eight years 23 million jobs were created. During his term we had the fastest and longest sustained growth in the economy in three decades. Family incomes reached record highs. He brought unemployment down to the lowest level seen in 30 years. But the economy was only the start.

He changed the welfare laws to keep able-bodied people from staying forever on the public dole. He protected nearly sixty million acres of forests from logging and put in place the most stringent air pollution standards in the nation’s history. He expanded Hope Scholarships and created Lifetime Learning Tax Credits. He made it possible for people to care for a sick relative and not lose their jobs. He reformed Medicare, signed the Brady Bill and reduced the share of federal spending as a percent of the economy to its lowest point since 1966. He was instrumental in both the Middle East and the Northern Ireland peace processes.

It’s a wonder that the Republicans could hate the guy so much. I think a lot of their hatred was because he was a damned effective president. As much as they loathed his weasel-like behavior they hated more he was so darned good at what he did. Even in the middle of some of his worst personal struggles he still did the nation’s business adroitly. While impeachment hearings were going forward he was not so distracted that he could not respond to terrorist attacks in Africa.

Despite his impeachment Clinton left a country markedly better and wealthier than when he had come into office. Where many talked results Clinton delivered results year after year. His track record is remarkable and probably unequaled since Franklin Roosevelt. It may well be that some of his success can be credited to others. Perhaps some of the economic growth can be attributed to our zealous Federal Reserve or the end of the Cold War. But only a partisan fool would deny him the vast majority of the credit. It was not just luck. He succeeded because he was relentless and utterly focused. If he could not get to his goal by one path he simply tried another path until he succeeded. His failures were large but they were few. His successes were voluminous.

I’d take him back as my president even if he had orgies in the Oval Office every night. At least I’d know that someone who could consider all sides of the issue and make an intelligent choice for the country was the president again. In these troubled times I would sleep a lot easier.

Are the United States a bad investment?

Back in February I wrote that the United States would be in a heck of a fix if foreign creditors decided to stop loaning us money. Now there is convincing evidence that foreigners are starting to see United States government bonds as chancy investments and U.S. stocks as poor investments.

Today’s Washington Post has an article titled Bearish on Uncle Sam. If it is not alarming it should at least be ringing a few bells. For example the article notes that a September 9th auction for $9B in long term U.S. Treasury Bonds failed to attract any international investors.

In addition U.S. stocks in general are looking a lot less attractive to foreigners. The Post reports that stock purchases by foreigners are down from $9.7 billion in July to $2.1 billion in August. Looking at just who owns our foreign debt should be sobering too. Since 2000 for example the undemocratic and totalitarian Chinese government has purchased $172B of our debt. But lately it has been finding more attractive places to invest its money, including many projects inside China. If one were to look at the United States Government as just another company, increasingly its stockholders are foreigners. The current total federal debt is about $7.4 trillion dollars. Of that “intragovernmental holdings” (the Treasury’s words for our debt held by foreigners) was about $3.1 trillion dollars. In other words foreigners own about 42% of the federal debt. In 1997 foreigners owned about 30% of the federal debt.

In the short term it is unlikely that foreigners will stop investing in the United States. But foreigners may well demand higher interest rates because they may see us as a country unable to live within its means. With federal deficits currently over $1B a day the cost of our borrowing money at all levels in the United States could rise markedly. In the longer term this trend is very bad news. If our country is perceived as living indefinitely off the future it may be perceived as a junk bond country. If the flow of overseas capital stops the government will still probably find the money to finance government. It will do so by offering higher and higher interest rates. And this will mean the capital needed by businesses for expansion will either dry up or also become a lot more costly. And that in turn will mean that inflation will no longer be a mild problem but a severe problem. Inflation will drive an economic downturn that will put people out of work and could slide us into a recession or worse.

The United States is skating on fairly thin financial ice. But except for us fiscal conservatives no one seems to notice nor care. They think, “It can’t happen here. We won’t be another Argentina.” Oh but it can happen here. If our levels of deficit spending continue into the stratosphere and our insatiable desire for cheap foreign goods continues at its current insane levels then the day of reckoning is much closer than it appears. What is needed is some good old-fashioned austerity and modest tax hikes. Leadership, in other words. Unfortunately I don’t see that sort of sober leadership happening regardless of who gets elected in two weeks. Both parties have sold to the public, almost as if it is a right, that we can have our cake and eat it too. Even Kerry is promising more tax cuts for the middle class, not less.

It appears we’d rather live in fantasyland. Most likely sometime in the next four years our day of reckoning will arrive sharply and painfully.