THE RICH GET RICHER AND THE POOR GET...

I usually wouldn't use charts this big on this page, but the dates under each segment are important. As the chart title says, this is the distribution of average income growth during periods of economic expansion. What makes these data interesting is not so much that between 2009 and 2012 the top 10% grew massively while the other 90% had negative income growth. No, what makes this interesting is when you look at the top individual income tax rate during the early time periods.

In 1949 the top tax rate was 82.1%. In 1951 the top rate grew to 91% and stayed at 91% until 1963. Notice anything different about income growth during those years compared to the 21st century? Ya, the lower 90% of earners had actual significant growth in their income during those periods of incredibly high tax rates. Why was this so? Because the economy between 1951 and 1981 grew at an average rate of 3.7%, but between 1981 and 2013 it has grown by an average of only 2.8%.

So lets review. Not only do super high tax rates not hurt the middle class, but they also seem to do no harm to the growth rate of the general economy. And what significant event began in 1981, the year the economy and middle class income growth both started down? The so-called Reagan Revolution and the Trickle Down theory of economic growth. Facts is facts. Just sayin'.

MORE MYTHS

As I noted in the last post, our friends on the conservative side of things seem to believe a lot of stuff that can't pass the smell test of logic. That is to say, if it doesn't walk, quack or fly like a duck... it's not a duck, no matter how much you believe it is one.

Our second myth, then, is simply the entire right wing economic plan and answer to the endlessly repeated question, "Where are the jobs?" But don't worry about it being a long, dry list of policies. Here's the whole thing from a USAToday piece by Cal Thomas.

"Cutting taxes, lowering government spending and reducing the size of the federal bureaucracy would improve the economy... "

Ya, that's all of it. The conservative answer to all that is wrong with the Greatest Nation to Ever Grace the Face of the Earth. That, by the way, is yet more right wing clap trap. Here's the logic problem. If the statement is true then how could there be so much wrong with the country? Just sayin'

So let's dig a little deeper into the Great Plan (GP) and see how it would work to solve all of our economic problems. Cutting taxes. I assume that the idea is that leaving more money in the hands of them that earned it will translate into more investment in private sector businesses which will then produce more hiring and greater economic activity. That's the theory, anyway. Let's look at those ever so bothersome facts.

American businesses are, and have been, sitting on over 2 Trillion Dollars of cash. Not capital, not infrastructure, not warehouses full of product. Cash! There is a glut of mergers going on at the highest levels. And notice how often the deal is presented in terms of cash not just stock and other equity. We also have many large companies doing stock buybacks as a way to offer stockholders short term gain and get rid of even more of that pesky cash. What we don't have is hiring of new employees or raises for existing staff. So please, if you can, explain how giving a business even more cash money in the form of a tax cut will induce, encourage or maybe trick those companies into spending that money by creating jobs?

Businesses do not hire people because they have excess cash laying around the boardroom. They hire to satisfy a need brought on by increased demand for whatever it is that they are selling. Look at the last 6 years. Businesses have lots of money but are not hiring. Or look even farther back to 2001 and 2003. The massive Bush tax cuts, directed mostly toward the top 10% of earners did not result in increased hiring as had been predicted... by conservatives. Here's a chart of the unemployment rate since 2000.

Notice how after the 2001 tax cuts the unemployment rate went up, not down. Also notice that after the 2003 tax cuts the rate did start down, but very slowly and barely reached the level of unemployment recorded on the day George W. Bush took office. Oh, and you might want to notice that the huge upward spike starting in 2007 and ending in the first quarter of 2009 was all on Bush's watch.

So, two huge tax cuts... no effect on hiring. Tell me how this works!

Well, surely lowering government spending will do something positive for the economy. Maybe not. As I alluded to in the first myth post, government spending puts money into the economy. The logical extension of that statement is that reducing government spending removes money from the economy. But the conservative theory says that that money will still me spent and invested by the private sector which knows much better than bad old government where to pour that cash. Okay, but there may be a few problems. For example, it may be unstated but the conservative assumption is that money not spent by government will be returned to the taxpayers in the form of tax cuts (see above). This, of course, ignores the other unmentioned part of the right wing GP, the debt and deficit. I would think that any savings of tax dollars brought on by spending cuts should first go to reduce the deficit (the amount of money we borrow and then spend) and then to reduce the debt (the amount of money that we owe to those entities which lent us the money to excessively spend). They, conservatives, wale and moan about the D and D almost as often as they mention Obama's War on Coal. Which is to say, all the time. So I only think it would be fair to use spending reductions for those purposes. Want to bet on that one?

More importantly for our busting of myths (see how I avoided problems with the copyright laws), how would cutting spending, regardless of were any savings is redirected, "... Improve the economy?" I don't think it would. And I'm in agreement with the majority of economists. I'll say it again, government spending puts money into the economy. And, by the way, it also increases the moneys coming in from taxes. No, this is not some perpetual motion machine that runs forever on its own output energy. It is the simple fact that the federal government taxes transactions.

We pretty much only think of the government taxing income, but income, and in the case of businesses, profit, can also be viewed as transactions. Your part of transaction is to put in your 40 hours of working for your employer and your employers part is to give you money for your work. The same, of course, holds true for businesses. Buy 100 widgets from Widget World and they send you widgets and you pay them money. So really, all of what we call economic activity is just one transaction after another. And they're all taxable.

Those who haven't been there might be surprised to learn that unemployment payments are... taxable. Yep, all of those lazy takers receiving unemployment benefits so that they can lay around and play video games all day on the taxpayers dime are, in fact, required to pay taxes on the money they receive. One member of the household working while the other is disabled or retired? Social Security payments are also taxable under certain circumstances.

Grants from the government are generally not taxable, every transaction from that point on, is. So a science grant of say $500,000 to study hens teeth may seem like a half million dollar waste, but just remember that the half million dollars is now buying lab equipment (taxable) lab coats (taxable) paper, pens, computers, cell phones, lab assistants, etc. (all taxable). And the people who are paid for their work or their products take that money and buy bread and milk and shoes and diapers and more lab coats and stuff to sell AND IT'S ALL TAXABLE.

This basic fact is why Europe, which chose spending cutting as their way to recover from the Great Recession, is suffering under double digit unemployment and why the USA, which, by way of the FED, chose stimulus rather than austerity, has an unemployment rate of 6.1%. Facts are facts.

Okay, that's enough for now. The part about reducing the size of the federal bureaucracy is really just reduce spending said in a different way and is, as we've seen, just as meaningless. This stuff sounds good, in a kitchen table, checkbook balancing, kind of way, but the federal budget is not your checking account. The general economy doesn't work like that and believing that it does is a very big part of the problem.

MYTHS

Every so often I read or hear something said by a politician or political pundits that just sets my teeth on edge. Why? because I know that what is being said is not true. And I'm not talking about Presidential birth certificates or other such bull crap that is passed off as true in certain circles. No, I'm talking about things that are false on their face by real evidence or logical deduction. For example:

In an op/ed piece from our local, very right wing, newspaper a Republican Congressman and committee chairman expressed the thought that he didn't think that the American people wanted any higher taxes since that just took more money out of the economy. And there it is. The myth of the black hole of government taxation.

First, the obvious question should be, "Where does the money go?" I can't for the life of me figure that one out. Is there a super computer out in the desert somewhere that adds up all of the tax dollars that, because they've been collected, now must disappear from view. Of course given the government's fine record of efficiency I figure that super computer is a couple of Apple II's and a dial up modem.

This little myth, which has and is repeated regularly on the right, flies directly in the face of the other side of the conservative mantra; out of control government spending! What do these folks think is being spent? Let's see, the government taxes people and corporations, who are really just people too, haven't you heard, takes that money and hides it somewhere so that it is no longer in and usable in the regular economy and then, I guess, borrows money from China to spend on all of the worthless programs that the government over spends on. Or something like that. See what I mean. This whole concept fails a simple test of logic.

No, the government does not remove money from the economy when it collects taxes. It might remove money from your economy or from your businesses economy and that could certainly piss you off, but if you step back and look at the bigger picture it's clear that redistribution of money by the government may stick in your craw, it's what governments at all levels do.

We can clearly see that the Congressman's statement is false. Is this a deliberate lie on his part? I have no way of knowing. More troubling is the thought that he actually believes this nonsense. That would be the result of decades of ideology being endlessly repeated and never challenged by our dog whipped main stream media. They, the media, are so afraid of charges of bias from the right that they'ed find someone to express an opposing position after a guest states that the earth is round. What scares me is that this guy writes laws that I have to then follow. He doesn't know how the economy works. That's not a good mix.

Okay, that's all for now. Think about this a little, please. Myth number two coming up.

HOW DARE THEY - INSURANCE MANDATE

How dare the Government mandate that we must have insurance. And mandate what the minimum coverage must be. And penalize us if we don't buy the insurance from a private company approved to sell that insurance. How dare they!

Of course, I'm not talking about the ACA or as it has come to be called, Obamacare. I'm talking about Auto Insurance. That's right, good old auto insurance. I can't for the life of me understand why the folks on the political right can get blue in the face over the ACA's individual mandate. You know, the government forcing us to buy a product and penalizing us if we don't, since that is exactly what happens with your auto insurance.

Let's compare, shall we. Government sets the minimum coverage required under both. Check. Government must approve which companies can sell both. Check. Government mandates that you buy both types of insurance. Check. Government penalizes those who don't buy both types of insurance in the form of a monetary fine under the ACA and by taking away ones vehicle registration under the auto insurance statutes. Check. The only difference that I can see is that the ACA is federal and auto insurance is regulated by the states. Oh ya, and that the ACA is a program passed by the Democrats under a Democrat President. (Using ideas first proposed by the very conservative Heritage Foundation, by the way.)

They're the SAME, people! No difference at all. The auto insurance mandates were put into place so as to product the public from uninsured, and unable to pay, drivers who cause accidents and damage to those who do take personal responsibility and buy insurance. It's a way to mandate that personal responsibility and the states feel that it's in the best interest of the public that all vehicles are covered by insurance. The ACA is a way to make the uninsured health care consuming public also take the same personal responsibility that those who have purchased health insurance have taken. That way the responsible people don't have to pay to make up for health care services used by the uninsured and then not paid for. Each form of insurance satisfies a compelling public interest. There is no difference.

So, please, someone tell me why one is okay the the other is not? Please. Anyone?

TAXES

I've been working on our taxes this week and if anything can send me into a rant, that's it. Now, I figure that everybody hates paying taxes, but if you listen to conservatives you'd think that the tax man ranks right up there with Hitler, Stalin and Jack the Ripper.

You've heard them, I'm sure. "The government wants to confiscate your hard earned money," or "That government just wants to steal my money." Of course this is usually followed by the words, "And give it to some poor folks," or words to that effect. This echos back to the 2012 Presidential race and the talk of Makers and Takers. But maybe we need to get a bit real.

When you try to define who falls into which camp, either the Makers or the Takers, you run into several, shall we say, problem areas. For example, the fact that the Federal Government pays out huge amounts to subsidize the oil industry. And Agribusiness gets in on their share, as does the renewable fuels industry, including solar, wind, hydro and geothermal. And let's not forget the auto industry, the airline industry and pretty much any other transportation industry you can think of other than the Amish buggy industry. And these and many more are so called Makers!

On the Taker side of the coin one is faced with the uncomfortable truth that both Social Security payments and unemployment benefits are taxable. That's right, every year I have to pay taxes on the Social Security Disability payments which I received during the year. So, does that make me a Taker... or a Maker? Let's see, I earned enough money as a business owner who created and helped to create a couple hundred jobs, and paid into the Social Security and Medicare systems the required taxes so that now, when I need it, I can get a check from Social Security for my disability and receive health insurance by way of Medicare. I guess I went from being a Maker to a Taker. But since I still pay taxes on what I receive I should still be a Maker, right?

And that right there is the part that makes my head explode. People are always changing their status in our mobile and ageing society. It's one of the things that makes this a great country. We just shouldn't label folks with names like Makers and Takers and then try to make those labels a justification for certain policies. It's not fair and it can come back and bite you later in life. Even conservatives get old you know.

LET'S TALK ABOUT BULLETS

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ON RAISING THE MINIMUM WAGE THE GOP IS JUST ...WRONG!

First, a little housekeeping. Yes, I'm back. Like a bad penny I have returned from an almost year long battle with a rather persistent, but not life threatening, infection. The main problem was that the combination of the infection, and the antibiotics to fight it, knocked me for an energy loop. As in, I didn't have the energy to sit at this computer and write. But I miss it, so I'm back. Now on to the topic.

As the President said in the State of the Union speech Tuesday night, we need to raise the Federal Minimum Wage to $10.10/hour and we need to do it soon. This, of course, produced the usual screams from Republicans that raising the minimum wage will cost jobs and do great harm to the economy and, I think, cause dandruff to break out across the land. As one law maker lectured a TV reporter this morning, it's just simple Econ 101: The Law of Supply and Demand. If you have a higher cost for something, in this case labor, you will use less of it by either not hiring new workers or by laying off workers that you have now.

I'm guessing from that position that, first, the Congressman never actually took Econ 101 and, second, that he never owned a small business with employees. Here's what the Congressman, and the Republicans, pretty much to a man, fail to understand about what actually happens when the minimum wage goes up. Businesses raise prices! It would seem, if you listen to the GOP that the idea of raising the price of a good or service in our economy is right up there with the Seven Deadly Sins. They don't like and they won't stand for such a thing. Oh, they don't actually hate prices increasing if it throws off more profit for the company and increases the wealth of the stockholders. But thou shall not cause prices to increase to pay for increased cost of labor. I'm sorry, that is just nuts.

Now, here's what actually happens when the minimum wage, either State or Federal is raised. I know these things from first hand experience. My darling wife and I owned and operated two locations of a certain fast food franchise. We employed 120 people between the two restaurants and we had to deal with a minimum wage increase during that time.

The first thing that blows up the logic of the Republican position is that labor follows need. No good small business person employs unneeded staff. But by the same token, your employees have value to the business because they make you money. Maybe not every day. Maybe not every hour. But over all, a business will operate at close to the correct number of employees for the amount of business expected. In fast food we had the ability to add staff for certain parts of the day (you know, meal times) and have fewer people on the clock during slow times. This is because there are many possible part time positions available in the fast food business. Students who work after (or before) school, workers with other full or part time jobs, and older folks who don't wish to work a full time schedule. But remember, labor follows need. When the minimum wage went up the very last thing we thought about doing was laying people off so that our labor costs didn't go up. If we were doing the job right, we had the number of people we needed for the business which we anticipated. If we were over staffed because business was slow we should have laid people off sooner. If we were understaffed because business was growing, we needed to add employees whether or not they would be paid more under an increased minimum wage. The way we dealt with the increased cost of labor was to raise prices a little. Not across the board and not by a huge percentage. What was the result?

Our business increased and we needed to add staff! And that's not an unexpected result. There are scores of studies and surveys which agree. Raising the minimum wage doesn't cost jobs, it helps in the creation of jobs. Why, you ask? Because that Econ 101 idea of supply and demand does work when dealing with actual products or services being sold. More money in the hands of your staff, and in the hands of every other minimum wage businesses' staff, means more demand which leads to more staff. This idea is not new. Henry Ford was soundly criticized by the business community of his day when he took the outrageous step of paying the workers building Model Ts on the assemble line the unheard of wage of $5.00/day. His reasoning was simple. If I pay them that high wage they will be better able to buy the cars that they are building. Which will mean I'll sell even more cars and, of course, make more money. It worked.

The second thing the GOP doesn't seem to get is what I mentioned above: everybody is in the same boat. We could raise prices because every other fast food restaurant also had to pay a higher wage and, thus, also needed to raise prices. If my competitors could gain no advantage, in the long term, they either raised their prices too, or ate the increased cost. In the fast food world, and in fact in most minimum wage businesses, you can only do that for a little while. The profit margins are too tight.

So, as you go about your business, when you hear Congressman so and so or pundit such and such go all Rambo on the very idea of raising the minimum wage, ask yourself if the Congressman or pundit is smarter than Henry Ford. I bet I know the answer.

ARE WE REACHING THE TIPPING POINT ON HEALTH CARE COSTS?

I just finished reading a very informative article in last weeks Time magazine about the health care costs that we, insurance companies and the government pay. One can certainly be outraged at being charged $1.50 for a single Tylonal  tablet that cost the hospital 1.5 cents. But maybe this is pointing to an even bigger outrage; that fact that middle class earnings have declined since the 1970s while the price of health care has only increased. At what point do we find that people just can't afford to get sick? And have we already reached that point?

I think that we're there and have been for a while. The single biggest driver of personal bankruptcy are medical bills. pretty much everybody can name a friend or relative (or themselves) who were charged huge sums for simple procedures and short hospital stays. The usual response from the political class is that greater competition and more transparency will make people better consumers of health care and thus drive costs down. It just never seems to happen. People aren't all that excited about asking the price of a needed health procedure. They're either insured in some way, so that they never actually deal with the price, or they are in no condition to haggle. "Gee, I'm going to have to check that other hospitals price to repair my broken leg." "I'll get back to you." We're not buying washing machines here.

That concept, that health care is not like other goods and services, is at the heart of the problem. When you need medical attention, you need it. In many cases, if you don't get that attention, you will die. Or suffer disabling after effects. Or disabling after effects until you die. None of these is a good outcome for the consumer. But, as the Time article lays out, this produces some very good outcomes for the medical industry. They make loads and loads of money.

Now, it's pretty clear that suggesting that maybe doctors and hospitals and drug companies charge less is seen by some to be... un-American. It brings into question the entire capitalist system that we have created and defend. But, I think that if we can look at it from a slightly different angle, or two, we might just see some light at the end of the tunnel that isn't a train.

As I asked at the start, has the health care industry reached the tipping point beyond which people just can't afford to pay any more? If your health insurance goes up 20% and your paycheck hasn't gone up in three or four years, you may have to do without the insurance. The same is true of increasing co-pays and deductibles. And for the uninsured medical bills can be just devastating. If things don't change, each year will see fewer and fewer consumers of health services. From a business standpoint that would be a very bad thing for the health care industry.

But we don't ever seem to get to that point because health care is a necessity of life. So maybe we need one of those different angles to solve this.

As a society we have determined that for certain things necessary for life we don't want to leave outcomes to the free market economy. The water that comes into your home, even if it's from a private, for profit, company, is heavily regulated. Joe's Water Service can't really compete on price or service because Joe has to meet the same quality level as the city water department. The same is true for sewage collection. We assume that these services will be provided by our city or town, or by a public service district. It wasn't always like that.

In the days before the urbanization brought about by the Industrial Revolution fresh, potable water was hard to come by. Rain barrels and hand pumped wells in the towns and, sometimes, water collected from creeks or streams out in the country. If you were lucky, or your ancestors were smart in selecting their homestead, you had a nice fresh spring bubbling out of the hillside behind the house. Whatever the source, your water needs were pretty much your own problem to solve. And, again, the same is true for sewage and other waste. In the country it was dig a hole and put a shed over it and in the cities, well you really don't want to know about the cities. After the age of throwing "slop" out of the window into the street came the age of cess pools in the back yard and a wagon with a tank, and a hand operated pump, used to empty the nasty pit that your grandpa told you to never play near. (Not a problem. The smell took care of protection just fine) These services were provided by private companies which started with two guys and a wagon and grew to rather large firms with dozens of trucks. Notice, though, you were still on your own. You had to contact the company so have them come and pump out the pit.

After the Industrial Revolution caused cities to explode in size and density, and the old model of taking care of your own needs fell under the weight of too many people need too much food and producing way too much waste. In order to protect the public, as a whole, from water borne and waste borne diseases the cities and towns took over these services. They became public utilities.

The same thing happened with natural gas and electricity. Even though we may be supplied by a private, for profit, company, they and their price structure are regulated by public utility commissions. We really don't want price competition on natural gas services. The safety of the population trumps capitalism in these cases. Electricity and natural gas are just too dangerous for price wars and such. Interestingly, heating oil, and propane have not followed this trend. The reason has to do more with infrastructure (pipelines and wire) than with any other economic or public safety issues. You just can't pump heating oil to individual homes by way of a network of pipes. Particularly in the winter. With respect to electricity the problem is economy of scale. It doesn't make economic sense to generate power all over the map when that power is going to be generated with the burning of coal. Or the damming of a river. Or nuclear power. Those are big business and government projects.

So, we see that certain necessities of life are better distributed to citizens by either their government or companies regulated by their government. And then there's health care.

In the case of health care we have turned the whole on its head. We have huge companies, making huge profits, providing the needs of the citizens with lots and lots of outlets for their "products," with some government regulation, but mostly with the attitude that any other system is socialized medicine and a very bad thing. I just don't get it.

We have a necessity of life, health care, that we purposely leave in the hands of private enterprise, and we wonder why the cost keeps going up. Please note that, even though Medicare and Medicaid are government programs, they're designed as a way to pay private health care providers. Not to provide health care. And that is the heart of the matter. We didn't dream up "sewage-aid" or "water-care" to help pay for those necessities of life. No, governments stepped up and took the burden on themselves. Your public utility provides the water or the sewage removal.

I'm afraid that only such a public utility model can cure the health care mess that we find ourselves in. I think we have to look at what the rest of the industrialized world has done and pick out the best practices and adopt Universal Public Health Care for all. Not some patched together Frankenstein monster like we have today, but a real national health care provider. The doctors would work for the government and nonprofit hospitals would actually not make huge profits. The government would fund drug research directly and the consumer would reap the benefit of cancer drugs that don't cost $15,000 a dose. We could, in fact, become civilized. Oh, who am I kidding. Civilized doesn't buy politicians. The health care industry sure does! 

LET'S TALK ABOUT GUNS

This may come as a shock to some of you, but I am what you would call a Bill of Rights absolutist. That is to say, on issues involving our Constitution's first ten amendments, what you see is what you get. The Second Amendment protects a persons right to "keep and bear arms." That's pretty much it. And my reasoning is also pretty simple. If someone, a bad guy, attempts to harm me or my family with a firearm, I shouldn't have to wait for the police or resort to throwing pots and pans at the guy in order to protect us. I don't think that it's a very hard concept to understand, but I can see where the other side is coming from.

Americans have always been quick to ban or outlaw things, or behaviors, that are thought to cause problems in society. Alcohol, drugs, porn, adultery (see The Scarlet Letter) are just a few examples. We, of course, miss the bigger picture most of the time so we get fun things like the organized crime that was the direct result of Prohibition in the 1920s. The same is true of guns. If we just ban the damn things the problem will go away. Sorry, it won't.

In the current debate over gun control a rather large majority of people believe that so called Universal Background Checks will keep guns out of the hands of nut jobs and criminals. It's a nice idea. It just can't work.

A little personal history might help explain why. Back in the day when my first wife and I moved to a 121 acre farm in rural West Virginia I was a gun owner. The first was a .22 cal rifle, with a scope, that I purchased, new, from Sears. I think. It was a very long time ago. I do know that a background check was not part of the process. My second gun was a 12 gauge, single shot, shotgun that I paid $21 for at an auction. This gun was old. Old to the point that the first time I fired it the gun was tied to a tree and I pulled the trigger with a fairly long piece of string. Just in case. My third gun was a .30 cal lever action deer rifle that I bought from a friend. That's it.

The .22 was bought for protection. Not our protection. Protection for the chickens that my Ex insisted that we raise. It seems that chickens, and chicken feed, attract what we liked to call Varmints. It also worked very well to kill a steer in preparation for butchering. Sorry, but them's the facts. The only hunting I ever did with it was hunting the huge crow that was destroying our garden one year. Now crows are very smart birds and this one was at the top of the list. Every time I came around the corner of the house, with the gun in hand, said crow took off like a rocket. If I hid the rifle behind my back he'd just sit and look at me until I went to swing the gun into shooting position. Off like a rocket again. Finally I spotted him about 200 yards away in the back field while I was still in the house. Declaring softly, "I'm smarter than a crow," I took the rifle into the bathroom. The window looked out on the field. I got down on the floor and very slowly opened the window just enough to allow the rifle barrel to poke out and to give me a clear sight line threw the scope.

I pulled the trigger just as he started to jump into the air for takeoff. He never made it. .22 bullets are very fast. I learned a very important lesson that day. Never fire a gun in a small bathroom! Besides going instantly deaf, I was only hit a glancing blow from the hot brass cartridge that ejected from the gun and then bounced off the wall not two feet to my right. The sucker could have caused serious damage to an eye.

The shotgun's main use was snake elimination. We had an old stone drain on the edge of the front yard and copperheads loved to sun themselves in the rocks. A 12 gauge shell full of buckshot works wonders, and avoids the problem of ricochet. It was better for all concerned. I never hunted with the deer rifle, and, in fact, I think I only fired it a handful of times. It was like getting kicked in the shoulder by an angry horse.

In the end I sold the .30 cal to my brother in law, sent the then broken shotgun to the dump and left the .22 cal with my Ex when I split the scene. I have no idea where it may be now. So how does any of that relate to gun control?

The whole idea of Universal Background Checks is the part about universal. Currently all federally licensed gun dealers must get a background check on any person buying a gun. This same rule doesn't apply to private, person to person sales at gun shows. This is the so called "gun show loophole." Closing the loophole, assuming that the system is in place to allow for quick and easy background checks at gun shows, is not much of an issue to me. No, the problem is with actual person to person sales. And in particular sales of existing guns.

As I said. I bought a high powered rifle from one person and sold it to another. No paperwork of any kind was involved. In order to bring that gun, and millions like it (there are over 300 million guns in this country already), into a Universal Background Check scheme would require registration of that gun. Some proper and approved paperwork would have to be attached, legally, to such and such .30 cal rifle with serial number so and so. This would be true of every existing gun in the country. Oh, and that paperwork would, of course, have to include information on the current owner, and any subsequent owner, much in the same way we register vehicles. Sure, lets create a DMV for guns.

I see at least two real problems with such a registration scheme. In order for it to work to prevent guns from falling into "The Wrong Hands," (whoever that is) there needs to be a threat of punishment for failing to get a proper background check before a private sale. That threat of punishment would attach to the last  known registered owner of the gun no matter how long ago he owned it and no matter how many person to person sales had occurred since the first such sale. A gun sold and resold twenty times over twenty years that ends up being used in a crime could result in the arrest of the poor schmuck who needed an extra $200 to fix the brakes on his truck twenty years before the crime was committed.

That's the only way Universal Background Checks would work. It's not like the police can see a gun's license hanging off the stock or hand grip like the license plate on your car. No, this would only work with universal registration of all guns...and gun owners. That last part is the second problem with this idea. It has long been said in the NRA world that "Registration leads to confiscation." That may sound a little paranoid, but I think that it's a sentiment held by many more people than the usual suspects labeled, "Gun Nuts." And it's that sentiment which would cause most existing guns to never be registered at all. If the guns aren't registered the whole thing fails. It really is that simple.

Why do I believe that most folks would not step up to have their gun(s) put into the registry? Well, first I think many gun owners would ask, "What's in it for me?" Piece of mind doesn't drive a lot of action by the American public. If people can't see a benefit to them, directly, they are not going to comply. And remember, for this to work the paper trail has to include every subsequent sale or gift of the gun or the damn thing could come back to bite you years later.

Second, we have a long history of ignoring or avoiding laws that we don't like or agree with. Prohibition is a perfect example, as is drug use (tens of millions of people smoke pot on a regular basis) and even the underground economy of cash payments for legal services (I'll give you $20 to take that old stove to the dump) not to mention illegal ones, come to mind. What makes anyone think that tens of millions of gun owners are going to step up and "Do the right thing?"

So, there is my pretty pessimistic take on gun control. I think that this is one of those areas where we as a nation can condemn something, gun violence, while in the end realizing that the ultimate price of freedom, is freedom. In this case that means the freedom to get shot at by bad people. We don't have to like it, but I think we have to live with it.

CAUSE AND EFFECT

We live in a cause and effect universe. Things don't just happen by themselves. For every effect, there is a cause and without that cause no effect will occur. This is a basic law of physics. Why is this blinding flash of the obvious important, you ask? Because  it seems to me that the Republican Party, and Mitt Romney want to repeal this physical law of the universe. Let me explain.

We have been told, time and again, that the only way out of our current post recession economic doldrums is to cut taxes on the well off and rich, the so called job creators, and eliminate strangling regulations from business. Do that, the GOP says, and the economy will perk right up. Why Mr. Romney has even said that such a course will create 12 million jobs in the next four years! It sounds good, doesn't it? But the same problem keeps nagging at me. How does it work? What is the cause that leads to the 12 million job effect?

For the life of me I can't find one. If the idea is that companies will have more money because they will be paying a lower tax rate and, thus, will use that money for hiring, I remain unconvinced. Look around. Businesses in the USA are posting record profits. And they're not spending much of it either. The last number I heard was $3 trillion. That is, businesses in this country are sitting on $3 trillion in cash money. So seriously now, how much more cash do they need from tax cuts before they start hiring? Will another trillion do it? How about $2 trillion more? See the problem. There doesn't seem to be any particular amount that will cause the effect of more hiring.

We do know that the other guys also have a plan for increasing hiring and creating jobs. They may call it investing in infrastructure, but we all know that means government spending. But guess what? There really is a cause and effect relationship between spending and job creation. One can yell from the top of the highest mountain that "government can't create jobs," but there's no question that government can create demand and that leads directly to...jobs! If government needs 20,000 new hammers you can best believe that some business person will try to sell those hammers to the government. They might be over priced. They might be horribly delayed. But somebody will make said hammers and will sell them to the government. And since hammers don't just grow on trees, somebody will need to be hired to do the making. Government creates a demand that is then filled by the creation of new jobs. Thus, one step removed, government created new jobs.

But the tax and regulation cutting method doesn't have that same connection. What makes Mr. Businessman add workers? Because if what the government does under a Romney Presidency can't cause the desired result, can't make the effect happen after the cause, then Mr. Romney and friends really don't have a plan at all. What they have is Magical Thinking. They believe that a causal link exists, in this case between lowering taxes and job creation, when in fact there is no such connection. But they sure do believe it to be so.

But has anyone actually thought about how this might work in the real world? Because it seems to me that what has to happen is as follows:

First, government cuts taxes on the job creators.
Then, the job creators, having more money than they had before the tax cuts, open wide the factory gates to the hoards of job seekers who will then have jobs, will pay taxes and the country will be back on the road to prosperity. You can almost see the CEOs standing at their penthouse office windows looking down on the masses as they line up to be hired. He, or she, may spread their arms wide in a gesture of welcome, even if the soon to be new workers can't see such a gesture from the ground. That looks to me like the entire Republican job creation plan, at least from the vantage point of the "Job Creators." Because remember, there's no actual cause for the desired effect.

But what does this look like from the people at the gate? It looks like they line up and beg the job creators to grant them a job, doesn't it? Should one approach on bended knee, perhaps? Should one be careful to not look the "Job Creator," in the eye, in case that might offend? Since nothing the government did in cutting taxes actually made a company start hiring, I think some variation on begging for a job may be the only solution.

And if that's the case, would someone please explain how begging rich folks for work offers more freedom than being dependent on government to send out a Social Security check or pay the doctor that you just had to see. Anyone? I didn't think so.

THE BOMB BOX

What was a 43 year old lawyer doing on a barge in the middle of the Ohio River with a half ton of explosives?

The Fourth of July! Independence Day! Fireworks!! Was there a boy alive in these United States whose heart didn't beat faster at the thought.

Flags and parades and marching bands are fine. Picnics and hotdogs and outdoor games are just great. But FIREWORKS.   The very essence of this country's annual birthday extravaganza. Pictures of firecrackers exploding form the backdrop of newspaper ads for weeks in advance of the big day.  Television gives us shells star-bursting in the background as the car/furniture/swim­ming pool salesman offers that special sale price in celebration of the Fourth.

I admit it. I'm a complete fool for things that explode.  I was one of those kids who pestered his father for weeks in ad­vance of the Fourth. "Did you get any fireworks yet?" I'd ask at least five times a day. "Did you get any cherry bombs?" Of course my dad, being a responsible father of the fifties,  had  limited his  purchases  to  snakes (little black buttons  that  when  lit smoked and grew long  ash snakes) sparklers and a couple packs of lady-finger  firecrackers. The evening of the Fourth was always exiting, but sadly, it never felt like enough.

It was the big municipal displays that set the tone for the proper level of pyrotechnics. I felt that anything less  than  a rocket  ascending to the night sky in a trail of sparks  followed by the chest thumping WHUMP as the shell exploded into a  colored starburst  of millions of trailing meteors was, while not a  com­plete let down, at least not all that exciting. Firecrackers made a good loud noise, but they didn't fly. Bottle rockets both flew and exploded, but without the starburst. You can see the frustra­tion.

When I was ten I teamed up with my fifteen year old buddy, Cal, who lived down the block, and entered the mysteries world of science and engineering (junior division). Together we would cut the guts out of old TV sets, re-wire record players into hi-fi
noise blasters and, after that fateful day Cal went to the library, learned to make gun powder.

Gun powder. The Chinese concoction ironically intended by its unknown inventor as a potion to prolong life.  Magic black powder that, with the proper chemicals, could be created in a garage by two kids who had run out of TVs to dismantle.

We mixed, we lit and ... it fizzled, smoked and sparked (a little) then went out. Clearly something was missing and  that something was a container (to contain the powder and contain  the burn until it could reach explosive proportions). We wrapped our black powder in aluminum foil to make a tube shape, not unlike a firecracker. Since we had no fuse we simply left one end slightly open  and made a trail of powder to this end. Our test area was Cal's back yard where we set our device and fuse trail on a slab of scrap 2 x 10.

     Our plan was to light, run and watch the fun as our cracker blew up with a resounding boom. With the Fourth of July approach­ing I think Cal was planning a "booming" business selling home-made firecrackers to the other kids. I just wanted to see the thing explode.

We, that is, Cal, touched match to fuse and the powder began to sputter, then burn up the trail to the shiny foil cracker.  He ran  to our bunker behind the garbage cans (where I was already set  with my dad's old football helmet on my head) and  got  into position  just as the fire reached the open end of  the  cracker. With a sound like a cat spitting, the thing took off from its 2 x 10 launch pad, hit the grass 5 feet away and skidded and skipped across the lawn only to come to rest against the dog house next door. No boom. Not even a pop. But did we care? Not one bit. For in  that instant, as we looked first at the thin trail  of  smoke coming from the now spent cracker and then at each other, we both realized the extent of our invention. We had made a ROCKET!

Did we continue our quest for bigger and better rockets? Did Cal go on to Cal Tech to run the Jet Propulsion Laboratory?  Did these two boys blow themselves to bits (or at least damage impor­tant body parts) in a lesson filled tragedy told and retold on the newspaper's op/ed pages each July 3rd? No. In point of fact, after making a couple more foil rockets and launching them with unimpressive success (one made it onto Cal's roof) Cal discovered an adventure and mystery even greater than homemade fireworks. Cal discovered girls.

Eventually I too discovered girls and the particular brand of fireworks associated with that part of life. But I never  lost the thrill that comes from setting match to fuse and then jumping back  as  a cherry bomb tears the air with a  flash  and  report, leaving  the smell of gunpowder in the nose and a 12  inch  round hole  in the lawn. And now the fates had conspired to grant that ten year old pyromaniac his dream. I was going to help shoot the fireworks display for the city's Fourth of July celebration.  

Nine of us had boarded the old gravel barge down the Ohio River from Wheeling, West Virginia. Eight men ranging in age from thirty to sixty and one of the guys twenty something girlfriend. The guys carried the cardboard boxes of "Bombs", some covered in Chinese characters, from the pick-up truck to the barge, while Michelle and Jay (the sixty year old father-in-law of Ron, the shooter) carried the lanterns, cooler and shovels. The barge was a hundred feet long and twenty-five feet wide and was secured next to a crane barge to which we would be anchored at the shoot site. The day had been one of those perfect Fourths you remember from your childhood; clear sky, no humidity and just  a slight breeze. The perfect kind of day to blow something up.

The floor of the barge had been loaded with several tons of sand and earlier in the day, Ron and some of the others had set the tubes and mortars for the show. The front of the barge con­tained the "Finale" tubes. A double horseshoe pattern of 250 16 inch long pieces of thick walled plastic pipe set in frames of wood and held in place by sand bags and piled loose sand. In  the middle  of  the  barge where the tubes for  the "Flights",  four groups of six tubes each which would hold six bombs fused together. During the show these would act as fillers to add excitement leading up to the grand finale. Then at the back end of the barge were the main mortars. The real fireworks launchers.  The scary stuff.

The big fireworks rockets we love to watch on the Fourth of July aren't rockets at all. They're bombs that are set off inside of pipes pointed (hopefully) into the sky. The finale bombs,  all 250 of them, are 2-1/2 and 3 inches across and are either cylinders  8 inches  long or round like balls, each  with  its  paper covered  fuse  sticking out the top. All of the fuses are tied together so that once lit, the finale will progress, bomb after bomb, without anyone having to light another fuse.

The main mortars are steel pipe set in sand inside of a long wooden box which is then also set in sand bags and loose sand. For this show Ron had set four each of 3  and 4 inch  pipes  and three  each  of 5 and 6 inch pipes, all pointing  skyward  in  an ominous row. This was not to be the hi-tech modern electronically controlled fireworks display seen at theme parks, shell bursts timed to the instant and coordinated with blaring music. This was old fashioned fireworks. The men at the bomb box hand bombs to the runners who drop them into the mortars.  The shooter then lights the fuse that is left hanging out of the tube with a railroad flare. The bomb's first charge (at the bottom) explodes in the tube which sends the bomb several hundred feet into the air.  Then the secondary charge(s) explode giving the effect, Starburst, Palm Tree, Double Ring or just the very load boom of a Report.  My job was going to be to work the bomb box with David. We where the new kids.

As the barge crew set the anchors and fixed our position  in the  middle of the river I had a chance to relax and  contemplate what  I had gotten myself into. There on the near shore were the backs of houses on Wheeling Island, yards full of revelers including our respective wives and children. On the far shore was the downtown skyline and the river front amphitheater.  Thousands of people lined the shore. The river itself was full of pleasure boats.  The slight breeze brought the sound of the symphony orchestra and the realization that the crowd also included the Governor, since his wife (our First Lady) is Maestra of the or­chestra. This was a BIG show.

     Then it hit me. For weeks the newspaper, the TV news, even rock and roll radio stations had warned of the dangers of fire­works.  "The use of these illegal objects could result in your arrest, but more importantly, thousands of injuries  occur  each year, so  be smart and be safe. Go to your municipal fireworks display and LET THE PROFESSIONALS SET OFF THE FIREWORKS."

Well, it seemed that the warnings had gotten it right.  Here I was, a lawyer, in the middle of the Ohio River with two den­tists, an optometrist, a teacher and a tree farmer. The nicest bunch of professionals you ever wanted to meet and we were going to set off all of these wonderful fireworks. The fact is, full time "professional" pyrotechnicians are few and far between.  It's a  job  where you don't do much 364 days a year  (except  at the theme  parks)  so, of course, these guys do other  things  for  a living.  Ron, one of the dentists, has been doing this for over twenty years.  The fireworks company belongs to his father and uncle. From my point of view it was still a scary thought.

As daylight faded we made our final preparations. Loading the finale tubes and joining the fuses. Loading the first sets of flights for the opening. Setting up the bomb box and assigning the jobs for the show. As the new guys, Dave and I would work the bomb box. This was actually the cardboard boxes of bombs stacked on the floor of the barge, in order from 3 inch to 6 inch, and covered with a heavy tarp. Our job was to kneel behind the boxes, facing the mortars, and hand out the bombs to the runners.  The runners would either ask for a specific size to fill an empty tube, or we would give them a bomb of our choice and tell them the size.

Our instructions were simple. (1) Hand out the bombs as fast as they were needed. The idea of a good show is to never have a break in the action. Thus, the runners would be loading tubes that had just fired, as tubes next to them were firing. (2)  Keep the bomb box covered by the tarp at all times.  We were told simply, if a spark lands on the tarp shake or brush it off, but if a spark lands in a box of bombs, WE WOULD BE THE FIRST TO DIE!

With that comforting thought in mind we made our final preparations.  Long sleeve shirts replaced or covered summertime t-shirts.  Some of the guys covered their heads with tied banda­nas, while I choose to turn my ball cap backwards to keep the sparks off the back of my neck. As I pushed foam earplugs into my ears the sound of the orchestra faded. We awaited the signal to shoot. Eye protection goggles in place, David and I knelt behind the bomb box with our hands under the tarp. I held a 5 inch round ball of explosive in each hand, ready to be passed to a  runner after the first volley. Sweat trickled down my back as I flashed for just an instant back to Cal's back yard.  The feeling of excitement, of anticipation, of fear, was the same.  The two minute signal was given and the shooters lit their flares.

The opening flight from the middle of the barge went THUMP, six times and was away. I looked up as the trails went straight up a very long way, then stopped. For just an instant there was silence, then the shells exploded right over our heads.  Six colored stars appeared, one after the other, each accompanied  by a  loud BOOM. That was the signal for Ron to start lighting the bombs in the main mortars, twenty feet in front of us.

By the light of his flare I could see Ron first pull a  fuse from  a  3 inch tube out straight, then touch the  end  with  the flare. In less than a second the mortar fired, WHUMP, as a shower of sparks fountained into the sky. In the time it took to realize that shell was away Ron had lit two others, a 4 inch and a 5. Two more WHUMPS, each bigger than the one before and two more foun­tains of fire leapt to the sky in front of me. Then the first shell went off high above with a boom and Jeff, one of the run­ners yelled, "Give me a 3 and a 4." At least I think that's  what he said because just then the first of the 6 inch bombs went  off and  I felt rather then heard a giant WHUMP and a geyser of fire erupted right in front of me. The show was under way.

On and on it went. WHUMP, WHUMP, BOOM, BOOM, WHUMP.  Some­times the BOOMS were followed by smaller booms or even the siz­zle-boom of a special effects round. The smell of gunpowder was overwhelming as we passed bomb after bomb after bomb. "Give me a 6 and a 5." yelled Greg. "I need two 4s and a 6." for 20  minutes my  world  was reduced to the feel of the round bombs  under  the covering  tarp,  the WHUMP/BOOM of the mortars  firing  and  the shells  exploding and the huge plumes of sparks leaping into  the air. Then Murphy's Law took over.

I had just shouted to David that he had the last box of bombs in front of him and had shifted over to be able to help him pass bombs when a 6 inch shell misfired. It left the tube but only went high enough to fall back behind the sand bagged row of mortars. The first charge went off showering sparks up and to the sides. Ron yelled "Look out!" as he and the others headed for our side of the barge as the next charge, and the next, and the  next after  that  went off in the space between the  mortars  and  the steel wall  of the barge. Somewhere in there I  pulled  the  now fairly  loose  tarp up over my head and ducked down as low  as  I could get. Since I was now on top of David, this wasn't very low, but I guess it was low enough. In less than 5 seconds it was over and Ron, the professional that he is, yelled for us to "Keep Shooting!"  That's when we heard a WHUMP from the far end of the barge.

The misfired shell had set off the finale!  And, to make matters even worse, it had started in the middle rather than from an end so the tubes were firing two and three at a time.  The finale would be a little short at that rate.  With nothing to lose, we started to pass bombs and shoot as fast as possible.  If this was now the end of the show we would make it an ending to remember. David and I handed out bombs with both hands, no longer concerned with telling the runners what they had. Let them figure out the size in the five steps from the box to the mortars.  Ron and Wayne flashed their flares back and forth like swordsmen in a pirate movie, slashing at the fuses before them. And then, it was over.

As the last finale bomb burst over the barge, the boat horns started and the applause built. We heard whistles and screams and shouting and realized that we had just launched the biggest fireworks finale Wheeling had ever seen.

What was it like? It was that perfect ski run. It was a hole in one. It was that perfect Christmas. It was beautiful! I wish Cal had been there to see it.

THEY DON'T EVEN SPEAK THE SAME LANGUAGE

I had one of those Ah Ha moments the other day while trying to stay cool in front of the TV. Former RNC Chairman Michael Steele was talking to Chris Mathews on Mathews' program during which another guest suggested that President Obama would be politically wise to propose a large public works project before the election. While Mathews and the other guest tried to discuss the merits of such a plan, Mr. Steele kept interrupting with the comment, "With what?" Referring, no doubt,  to the fact that the Federal budget is, and has been, running rather large deficits.

"With what?" he'd say. Then louder, "with what?" The simple message being that in a time of deficit spending and increasing government debt we, as a nation, can't afford to repair our crumbling infrastructure. No way, no how! Ask pretty much anyone on the Republican side of the issue and they will give the same response. No way, no how! Well, they're wrong.

Here are a few uncomfortable facts for Mr. Steele and the GOP. We have been running deficits for quite a long time and the country has not gone under yet. The deficit spending of WWII was, as a percentage of GDP, far higher than the deficit today. And, maybe the most important, we can and are borrowing money about as cheaply as any country in history.

As any good business person will tell you, a business prospers when it uses OPM. That's "Other Peoples Money."  Whether from loans or investments, companies know that leveraging there own, often, limited  resources with the resources of banks or investors is often the only way to grow a business. This is particularly true in the area of capital improvements. Building a new factory or store takes far more resources than any sensible business can, or would, keep on hand. It's good business.

But when it's the countries investments? Not so much. The current GOP thinking is that we can only spend what we have and since we don't have any extra, we can't spend at all. This way of thinking, while seeming to make sense in the "around the kitchen table," type discussion, flies in the face of what governments at all levels actually do. Have the Republicans never heard of local bond issues? You know, for schools and new playgrounds and roads and the like. This is how governments, businesses and people finance today's spending with tomorrows dollars.

And I'll repeat the single most important factor. We, as a nation, can borrow from the investors of the world at incredibly low interest rates. And those same investors are clambering to buy our bonds. They're standing in line and throwing money at the Federal Reserve. Each bond offering gets double or triple the offers than there are bonds available.

So the next time you hear a voice on the right question "with what?" you might want to point out these uncomfortable facts. It won't change their mind, but it's fun to watch them stammer out some lame answer. Hey, it's summer. Without football we need to get our fun somewhere.

THERE ARE FOUR HEALTH CARE CHOICES

With all of the heat, and very little light, being produced in the debate over what we as a nation can do about health care for our citizens it would seem that there are dozens, if not hundreds, of different solutions being put forward. the problem is, when you boil it down there seem to be only four.

First, just leave things alone. The problem with this approach is that time is not on our side. If we do nothing about the ever increasing cost of health care itself, and the ever increasing number of people who cannot afford or qualify for health insurance, the whole endeavor is likely to just crash and burn. As noted in the last post, uninsured "Free Riders," put an unsustainable burden on the system. At the same time, drugs, treatments, tests and therapies are all increasing in cost at a rate far in excess of inflation. We will simply not be able to care for sick people if something isn't done. Then, add in the 10,000 Boomers reaching Medicare age each day and the ever increasing number of folks in need who must rely on Medicaid and this house of cards will come tumbling down.

Second, we could mandate that people buy insurance. Thus, the much hated on the right Individual Mandate. This idea, which anyone who has any sense of what's going on in the real world knows, as opposed to pretty much the entire GOP, was a conservative concept that would force individual responsibility (yes, that is an oxymoron) and thus end the era of Free Riders. With everyone in the insurance pool, including the young and healthy, everyone can be covered and the cost of insurance should go down. Of course, this idea by itself does nothing about the cost of care but with everyone insured market forces brought to bear by the insurance companies should hold down the cost of care. Maybe. Sort of. We hope.

Third, we could stop treating the uninsured. This is the "let them die," option. Simply put, if the mandate to care creates the Free Rider problem then doing away with that mandate should solve it. It's not pretty and there isn't an office seeker, except maybe for Ron Paul, who would ever advocate such a change, but it would solve the problem. And as I said in the last post, it sure would get people to buy health insurance.
I don't think that we as a nation want to go that route, but given the political rhetoric out there right now, who knows. I'm thinking that Ted Nugent might like this one.

Forth, we could adopt a "Single Payer," system. You know, the dreaded (by the right) Universal Healthcare model that exists in every other industrialized nation on Earth. Call it Medicare for all or call it socialized medicine, the end result is the same. Everyone has health insurance and can get treatment. Costs are contained in much the same way as under Medicare today or we adopt more of a UK model where the doctors, nurses and technicians work for the government itself. If this were a new idea that had never been tried before I could certainly understand being careful. But this system works and it works all over the world. It really isn't un-American to borrow ideas from abroad.

Finely, I should include a fifth. That would be whatever the hell the Republicans want to replace Obamacare with. We don't know what that is. Maybe there are just four.

THERE HAVE TO BE LOSERS

The Affordable Care Act, or Obamacare, is now before the U.S. Supreme Court and according to some of the cable news talking heads things are not looking good for the Individual Mandate. You know, the part of the law that says that starting in 2014 people have to buy health insurance or pay a fine on their tax return. There is lots of talk of how this or that result will effect the election in November, but really no discussion of the actual alternatives to the Mandate as written.

The reason given by any and all of the defenders of the act, and some non-defenders if you listen to Mitt Romney from 2008, is that without mandatory insurance coverage healthy young people will not get health insurance. Without these healthy people in the insurance pool the companies can't afford to cover people with preexisting conditions. This also causes the uninsured to use emergency rooms and similar services, the cost of which is then passed on to the insured by way of even higher premiums. The idea is to get the so called "free riders," into the insurance system.

No one on the GOP side seems to have any idea of what to do about this problem. They're all very quick to shout "Repeal and replace!" but never offer what the replacement may be. See, the problem they have is, the logical, conservative, Republican response is one that a lot of folks think is a little mean. It was seen at one of the early GOP debates when the crowd cheered for letting an uninsured accident victim die. The only reason that there is a problem is the Federal law that mandates that health care providers help everyone, regardless of their ability to pay. If the GOP is at all true to their conservative colors, they should jump on the repeal of the mandate to treat. Then, our health care system would better fit with the conservative of ideal of self sufficiency and personal responsibility.

I have no idea how many people would die each year from being turned away at the emergency room door, but I'm sure the number would begin to decline after a while as more and more "free riders," realized the error of their way and went ahead and purchased health insurance. The numbers would, of course, also decline as the sickest of the "free riders," died off. This would thus appear to be a win for society and the economy.

Notice, please, that in order to get that win for society someone, in this case those too poor, sick or dumb to get health insurance would, of course, lose. That's the dirty little secret behind any plans for so called free market solutions to complex societal problems. The free market requires that there be losers.

The Liberal and Progressives in American society tend to want to protect the aforesaid too poor, sick or dumb from being losers. They want the government to be a back stop against losing. Conservatives tend to prefer the freedom of the marketplace, without actually telling the too poor, sick or dumb that they will end up as the losers. But be not fooled. That is what will happen because the "markets" demand it.

See, for everyone who buys a share of stock say, at what they think is a good price, someone else sold that share of stock and half the time lost money in the transaction. For every winner in a free market, there's a loser. The real problem for society is as I said; conservatives don't want to mention the losers and liberals want to protect people from losing. Each distorts the markets themselves and both lead to the kind of financial mess that we are slowly working our way out of.

So, keep an eye on how the Obamacare fight comes out and if it gets tossed out, ask your Congressman what he or she wants to replace it with. Good luck!

DOES THE GOP REALLY WANT TO ARGUE RELIGIOUS LIBERTY?

Oh, the fun that comes out of Washington. Now we have one side wanting to make contraception use a statutory right, and the other side screaming that to do so will infringe on their First Amendment religious liberties. It was that claim, "Religious Liberties," that made me sit up and take notice.

Without going into the entire dust up (if you need more information use the damn internet for something other than tweeting) I keep wondering what would happen if the offended religion were one other than Catholic Christianity. You know, like Islam. Would the defenders of faith based scofflawism be just as outraged if the law in question was similar to the French law against wearing a Burka in public? Or what if the defendant in a murder case case claimed that "honor killings" are part of their religious beliefs? Would that be okay? Or even, as I heard from one talking head, that Quakers could object to their taxes being used to fight wars. How far do we what to push this?

As will be no surprise to anyone who has read this blog, I come down on the side of the common good of society being more important than the particular beliefs of any particular religion. That may seem extreme or even anti-religious, but when one considers that their are over 250 different Christian sects in the U.S.A., not to mention the non-Christian religions and of course the non-religious, it seems to me that any other position can only lead to arguments like we are having now.

This puts me in mind of a similar, although not nearly as important as contraception, place where the beliefs of the few are imposed on the many. I'm referring to the good old fashioned "Blue Laws."  You know, the reason that you can't go out to breakfast on a Sunday in, say, North Carolina and order a Bloody Mary before noon. Or run into the grocery store to pick up a six pack Sunday morning in West Virginia. Most of these have been declared unconstitutional or are at least not enforced (much) but the buying booze on Sunday ones seem to have a lot of staying power.

I have been directly impacted by the NC version, and not because I'm a drunk looking to start early on a Sunday. No, The Queen of the Frontier and I owned a restaurant in the beach resort town of Kitty Hawk, NC and we were faced with this every Sunday morning. In comes a car load of happy tourists from some far away land, like New York, looking for a nice beach brunch with a morning cocktail and wham, I have to explain that "I'm sorry but I can't sell you $40 worth of drinks to go with your table full of Eggs Benedict because it's only 11:00 am." Trust me, that does not win friends and repeat customers.

My take on this was always that, if the preachers wanted to make sure that their flock didn't come to church drunk that they, the preachers, should have a chat with their wayward lambs. Why burden me, my staff and most importantly, my customers, with the problem. We don't see Rabbis marching outside of pork BBQ joints claiming that they should close their doors do we? Of course, this was not an argument that was going to go very far in the American south, but it does illuminate the problem.

If you, or your religion, doesn't like the use of birth control fine. Enforce that belief system on your believers. But leave the rest of us alone, please. Because any law that favors one belief system over another, like the blue laws, violates my First Amendment rights. And the great thing about our great country is, my rights are just as important as yours. Let's all defend them equally, shall we. 

WE NEED A CHRISTMAS MIRACLE

As it turns out, this is my 100th blog post. Who'd have thunk it! Any how, after a break from blogging I'm ready to take on the second hundred, so let's go.

We, that is citizens of the U.S. of A., sometimes act like cats chasing a flashlight beam. We'll pay attention to a problem right up until the beam moves, then wham, our focus moves to something else. This seems to hold true in just about everything we do as a nation and the question of what to do about the lasting effects of the Great Recession is no different. And that could be a problem.

As the mortgage/housing bubble burst and banks stopped lending the issue that seemed to join Wall Street, Main  Street, government and the individual was the issue of debt. Everybody had too much of it. Of course, we saw right away that this wasn't that big a problem for Wall Street since the Bush Administration was eager to push forward TARP to ease the pain of that particular segment of our economy. Main Street and the individual debtors were not so lucky. I don't even want to get started on the government's debt situation except to remind you of how much fun raising the debt ceiling was. That gave me nightmares.

So, as the whole countries' attention was focused on debt, and in particular, our personal level of indebtedness, we were cautioned from every corner that we owed too damn much, saved too damn little and the whole thing was, at base, a moral failure of the American people. If only we could change our ways. And, as strange as it may seem, we did change. Saving went from -1% to +5%, on average. Consumer spending all but stopped for a while. Some of this was not just a reaction to the moral dilemma, it was the hard economic reality of losing jobs, worrying about losing jobs and not being able to find new jobs. So, why then has the economy not turned around? We're all being good, moral citizens. We're not using credit to buy stuff we don't need. We're saving more. What the heck is the problem?

The problem is our short attention span and "all or nothing" way of dealing with problems. If the problem is too much debt we just need less debt, right? Wasn't that the rallying cry of the GOP during the fight over stimulus spending. "The first thing you do when you find yourself in a hole is... stop digging!" That makes perfect bumper sticker sense, doesn't it? Well, yes and no. And in our economy no is the better answer.

The U.S. economy, before the crisis of 2008, was 70% consumer driven. That is, 70% of all economic activity was people buying stuff. And not just buying stuff, but buying stuff on credit. So clearly the answer had to be, stop digging. But what if the hole one finds oneself in is starting to cave in. In that case one needs to keep digging in order to keep breathing. Go back to that 70% number. When consumers stopped digging, that is buying stuff, layoffs got worse. More people lost their jobs. More companies went under. More pain ensued. Why?

Because a consumer driven economy can't change over night to a saving and investing economy. There is way too much economic inertia. Just open the yellow pages, assuming that you still get such a thing. You'll find page after page of businesses dedicated to selling stuff to you, the consumer. Remember, 70%. No matter how much moral indignation is raised against our borrowing and spending ways, that's what the economy is set up to do. And, unless and until the consumer can start doing some of that spending again the recovery will remain weak. So what can we do?

We need, rather than tight money and increased saving, looser lending and a return to some pre-recession levels of consumer spending. We're seeing some of the latter this holiday season and I think that the results may surprise some folks. I know this sounds like I'm encouraging a return to the bad old days, but I'm only saying that this economy can't change over night, and to expect it to is a recipe for a double dip recession. Yes, we should encourage saving, but when the same banks that want to (and do) charge double digit interest on personal loans and credit card accounts can only offer savers <1% interest on saving accounts I really can't see the value to society of removing any money from the market place. Later, when the crisis is behind us? Sure. Now? Not so much.

So, let's all have a joyful holiday season and get out there and spend. Your country is counting on you! 

KEEPING PROMISES

One of the big issues floating around right now is the problems companies and units of government are having meeting the pensions which they have promised to past and current workers. We hear that this or that public pension fund is way underfunded, or that such and such corporation went through bankruptcy in order to shed long term pension responsibilities and if it's not your pension they're talking about we just sort of move on with life. But it is somebody's pension and breaking that promise to a worker carries harm far beyond that worker alone.


Pensions, either private or public, are simply a future benefit earned by today's work. It's a promise to the worker that funds, either from the worker, the employer, or both will be set aside to be given to the worker when he or she retires. At least that is the intent. Of course, we've heard for years about this or that union boss or politician who raided the union's pension fund for their own gain. So now we have 401ks and defined contribution pensions and all manner of other vehicles to provide the benefit and avoid the graft. But what about the promise itself?

It must be remembered that a worker, and her family, whether consciously or not, took the promise of a benefit into account when accepting the job in the first place. That was one of the reasons that government jobs were considered by many to be real plum employment. The government pensions were great.

But now we are in the age of the disappearing pension. Funds are under funded. Public pensions are seen as an undeserved perk for already over paid drains upon the body politic.Workers with 20 or 30 years in worry if they will get any of what has been promised and fear for their future. And that fear is where the harm spreads to the whole economy.


As I, and just about anyone looking at the state of the economy who avoids Fox News, have said repeatedly, we are in a demand crisis. Before the Great Recession 70% of the US economy was consumer spending. Now I have heard some on both the right and left applauding the recent upsurge in consumer saving (from less than 0% to 5%) and in so doing framing the consumption vs. saving argument in moralistic terms. It would be wrong, they say, to go back to our wicked excessive consumption ways. Now, whether it's wrong, wicked or even evil to be a consumer is not for me to say. But anyone who thinks that our broken economy is going to turn around just because folks are putting a little away for a rainy day is, in a word, deluded! It is not possible to transform a consumer driven economy into a saving and investing economy over night. Or even over decades. It can't be done. If we are going to recover it is going to have to be because people start to consume again. Buy things. Use things up and then buy more. That's what we are as a country and we are not going to change any time soon.


The problem is, when someone worries that the pension that they have been promised won't be there when they retire, they don't spend the money that they have. They start to hold on to it. And that means less demand in a demand driven economy.


I have little hope that this state of affairs will change any time soon, but I think we really need a national conversation about promise keeping. That to me is the morality problem we face, not whether or not someone is putting a little back. The threat of losing one's pension thus sweeps across the entire retail landscape. And if that threat, as most do, impacts thousands or hundreds of thousands of workers, like teachers and police and firefighters, then that threat can hold our whole economy back.


You want stability in our broken economy Mr. Politician? Stabilize the countries pension nightmare first. That stability will then spread. Just like the fear.

THIS MIGHT WORK

In looking back over my growing list of postings I've spotted a scary trend: I've written more posts with the Money label than any other topic. This could be because we are deep into a national financial crisis, or because, just as one thinks a lot about the beach in the dead of winter, I think a lot about money because I don't have much. Whichever it is doesn't really matter. Here's yet another one.

If, as I and a whole bunch of actual experts believe, the country is in a demand crisis not a too high taxes and too much regulation crisis than we need ideas that help create demand for American products and services. The Obama administration is proposing an extension of the 2% reduction in the Payroll Tax passed last December as a way to put more money in the hands of consumers who will, most likely, spend the extra money. This is fine, but since it only extends something already in place it can't really help much more than it already has. It won't create any new spending. We need something more. We need to reform the Usury Laws at the Federal level.

In brief, Usury is the act of charging too high an interest rate on loans and borrowing. Most states have such laws, as does the Federal government. And you would be very surprised to find that the legal limits are far below what Pay Day lenders, sub-prime mortgage lenders and, most importantly for this idea, credit card companies, charge their customers. Why?

Without going all lawyer on you the simple answer is that the U.S. Supreme Court ruled in the 1978 case of MARQUETTE NATIONAL BANK OF MINNEAPOLIS v. FIRST OF OMAHA SERVICE CORP. ET AL.   that National Banks can charge credit card interest based upon the Usury law of the state where the bank is located. They said basically that:

The National Bank Act provision codified as 12 U.S.C. 85,  authorizes a national banking association "to charge on any loan" interest at the rate allowed by the laws of the State "where the bank is located,"

Why does that matter, you ask? Just take a look at the address where you send payments to your credit card company. Delaware and South Dakota seem to predominate. These states, South Dakota in particular, took one look at the Marquette decision and realized that they could attract Credit Card companies who could then charge out of state borrowers based upon South Dakota's Usury rate. Of course, there is no usury limit in South Dakota. That's why so many credit card companies locate there.

So here is my proposal: Congress should amend 12 U.S.C. 85 to allow national banks to charge on any loan interest at the rate allowed by the laws of the State where the borrower resides. That's pretty much it. Of course it would have to apply to all existing balances. The screams of the bankers will be heard throughout the land, but there certainly is precedent for making changes to the terms of a credit card contract after the fact, so to speak.

The credit card contracts themselves provide the answer. They can change pretty much whatever term of the agreement that they want to and we, the borrowers pretty much have to take it. Oh, you don't want to pay the new and improved rate of 26% on your existing balance? Well, just close the account. You can't charge any more on that card, but you do have to pay the balance owed under the original terms. In my proposal the States and the Federal government would be acting for the consumers as their representatives (imagine that) in the clearly unfair and unequal contractual agreements that now exist.

The immediate result would be lower payments on high interest rate cards and other consumer loans which puts more money in the hands of consumers just like the Payroll Tax reduction, but this would act as a new stimulus rather than a continuation of an already in place tax cut. And it really isn't such a big change in the law anyway. Most states have Usury laws and have had them from the beginning. Why, even the hard core of the GOP can't bitch too much. Usury is forbidden by the Bible [Exodus 22:25] [Leviticus 25:36] [Leviticus 25:37]!