The Intersecting of Barack, Andrew, Chris and Randi
CUTTING TAXES: BLEEDING MONEY
It’s never too early to begin a Presidential campaign in the era we are experiencing – and we are looking at that beginning of the 2012 campaign right now.
By the time you read this, a lame-duck Congress and the Obama Administration will have compromised and continued the $300 billion a year Bush-era tax cuts for another two years, will approve immediate unemployment insurance coverage for two million long-term unemployed at a cost of $56 billion, will approve a $120 billion payroll tax cut in 2011, will approve the continuation of the middle-class tax cuts of $165 billion made during the months before the mid-term elections, will approve a $40 billion tax cut for families to help them pay college tuitions and are likely to approve a $25 billion tax initiative on estate taxes over $5 million in inheritance.
Total tax cuts being “negotiated” amounts to $900 billion a year. No wonder some “liberal” Democrat Congresspeople are yelling at the President. But how they eventually vote will be another story, won’t it?
In the meantime, the tough but realistic recommendations of the Obama appointed bi-partisan Deficit Cutting Commission will all be ignored.
By 2016 the annual interest on the trillions in debt we are accumulating through tax cuts will be greater than the annual Defense budget.
What we are seeing and what we know with proof ever day is that politicians think first of their own careers and reelection before they ever think of those they are supposed to be serving.
President Obama has got to be thinking that the Republicans will skewer him if he tries to restore or implement any new tax; that the present field of Republican candidates is weak to say the least; that there has got to be some improvement in the economy in the next 18 months; that no Democrat in his right mind will either want to go against a sitting President or for that matter even want to be President of a country sliding into a debt it has never known.
OXYMORONIC
What did the majority of voting Americans see and hear in the 2008 Presidential election? They saw a bruising primary fight in the Democratic Party between the nation’s First Lady for eight years, smart and brainy and tough but deeply scarred by the personal misbehavior of her husband, and with everything going for her except that she was ‘tone-deaf politically (but may yet be the Vice Presidential candidate with Joe Biden taking the State Department) and a young nine-year Illinois legislator, who happened to be African-American but with atypical family roots and background, and whose long-term experience was as a constitutional law professor and community organizer. What he had was the sheer nerve and financial backing to think he could be nominated for the Presidency.
His approach of promising change not experience, worked in the primaries. And then because it is often better to be lucky than good, his opponent in the general election was an aging reactionary who seemed to lose his place in the middle of the campaign after he’d named a pretty woman with an ‘aw-shucks attitude, a “wise-ass” mouth and not much else, as his Vice Presidential nominee.
What did America know about Barack Obama? He looked great campaigning with his long, hip, swingy walk, his smart, very direct, wife and cute daughters and that extraordinary smile. His ability to reach young people who liked the style and to reach older, independent voters who believed he could be an agent for change in America, was apparent in the large crowds in packed arenas across the country.
But what was he actually saying to all those people or rather what were they hearing? What words or phrases became the catch-words for the campaign; for an understanding of his approach to both winning the Presidency and running America?
He said America wanted change and “…we are that change…” and audiences rose and cheered. What change was he talking about?
He said America was tired of the mean-spirited fighting among politicians and political parties. He said America was concerned about fighting a war we seemed unable to win. He said that Americans wanted health care costs to come down and more people to be covered – with 44 million people having no health insurance at all.
To so many people he sounded like a visionary, a liberal and a humanist, a leader determined to break new ground, a fighter, a man unafraid to take on the special interests in control of America for generations. For so many, those qualities they wanted to hear after eight years of Bush, were so attractive, so promising that they made the electorate color-blind. Who would ever have imagined it in our time?
But what did he actually say?
He said he was neither a liberal nor a progressive. He said he was a pragmatist. He said it again and again. We wanted to hear him tell us about his vision for the ‘change’ he promised. But all we heard him say was that he was a pragmatist.
Pragmatists in politics advocate a behavior concerned with making things happen; the practical application of elements and consequences that will work, rather than theories, dogmas or principles. There is no room in a pragmatist for visionary thinking or behavior. A visionary pragmatist is an oxymoron. A pragmatist is concerned with some practical gain when gain is called for. There is no room for partisanship. No room for humanistic beliefs. No room for promises made. But there is plenty of room for the deal, compromise, conciliation and even appeasement. One could remember – going back to another time in history -that Britain’s pragmatist Prime Minister, Neville Chamberlain, returning from negotiations with Nazi Germany – promised “Peace in our time” even as he opened the door to World War II.
THE PROMISES
And so there were Obama promises that healthcare reform would only work if there was a public entity which could compete and so control the pricing of the private insurance industry. Nothing less would ever work to genuinely reduce the cost of insurance. In the 10,000 page healthcare reform bill, no such public entity exists.
There were Obama promises that the “Don’t Ask, Don’t Tell” policy that permitted gay and lesbians to serve secretly in the armed services would be eliminated so that they could serve openly. That promise doesn’t seem possible now.
There were continuous Obama promises that the Bush-era tax cuts of 2001 and 2003 would be allowed to expire. These tax cuts were essentially illegal at the time but they circumvented the law by promising a fixed expiration date in 2010, (as if any politician would ever be brave enough to “raise” taxes that way). These $300 billion cuts completely wiped out the surpluses gained by Bill Clinton after 24 years of staggering deficits incurred by Ronald Reagan and Bush the First.
By the time George the Second was finished he had taken that $300 billion of income annually out of government for almost ten years. They are likely to continue another two or three; a number that could cost America $4 trillion in the next few years.
Now we’re talking – in inflation dollars – of about 14 trillion dollars in lost income overall. Never mind that the tax breaks suited the rich more than the middle class. America has “lost” trillions in income that we desperately need trying to work our way out of high unemployment, mortgage foreclosures and no jobs.
We’re not going to turn this into a tax treatise…but just know this: America spends $3.8 trillion each year to keep itself in business: in public services, entitlements like Social Security, Medicare, for defense, for the waging of its wars.
America takes in $2.2 trillion annually in income. We’ve spent $1.6 trillion more than we receive every year for ten and now more years, and those losses grow even larger than that.
We can’t really pay for healthcare, or our failing schools or the crumbling infrastructure. We can’t help the States who have been cutting their own taxes for 10 years, and are now broke and busy firing their service workers like police and firemen along with teachers.
Many pundits call the recent Republican promise that there will be no legislation, no action on any bills, even international treaties, unless and until all the Bush tax cuts are continued — “blackmail”. But still the President insisted on trying to negotiate and compromise until we’ve reached the $900 billion in tax cuts annually – and he must now convince his fellow Democrats to support this “bi-partisan” agreement.
And yet we hear the President – ever the pragmatists – apologize after the midterm election-shellacking for not doing enough to work with the Republicans in a bipartisan manner. Is it any wonder that while people in politics wonder if Sarah Palin will become the Republican Presidential nominee in a little less than two years (instead of Mike Huckabee or Mitt Romney), that there are now people wondering who might step up to challenge Barack Obama in Democratic primary.
P.S. Several years ago – before he bought his election for a third term as Mayor of New York City – Michael Bloomberg was asked if he wanted to be President. In that stony-faced, self-effacing look of his he said that he didn’t think a short, Jewish, divorced mayor of New York would stand a chance. Three months ago, his chief political operative Kevin Sheekey moved to Washington to open an office.
BANKRUPTING GOVERNMENT
Do you remember David Stockman?
An economist, formerly Chairman of the Office of Management and Budget in the Reagan years, Mr. Stockman was the architect of Reaganomics, the policy of cutting taxes to produce economic growth. He was mistakenly damned for being the creator of supply-side economics that led to the biggest debt (before George W. Bush) in American history. In fact, he called ‘supply-side economics so confusing and wrong-headed that nobody understood it and no one could take it seriously’. How right he was. But today, Stockman is preaching a very different line.
Stockman claims that politicians have perverted his theory that carefully introduced tax-cutting would in fact produce demand and growth. He said supply-side economics ruined that theory – he resigned two years before the end of Reagan’s last term.
He’s saying that for the past twenty-five years State Governors and National Administrations have simply cut taxes no matter how deep the deficits they produce. He suggests that politicians now fear to raise taxes because that will cost them their jobs in Washington or in State capitols.
He says that Bill Clinton’s courage in raising taxes and America’s extraordinary growth across the board in his Presidential years did produce a surplus wiping out Reagan deficits – when few thought that could ever happen in so short a time.
Then W. came in and in 2001 and 2003 cut taxes across the board while fighting two wars, costing an income loss that turned us to debtor nation status even before the catastrophe on Wall St and in the banking and housing industries which cost us bail-out funding and the printing of more debt for stimulus spending to spur the economy. The unregulated economic activities of the Bush years are now being felt around the World. The transfer of manufacturing and back-office jobs to Asia to increase the corporate bottom-line and increase stock prices have produced record national unemployment with no end in sight. The collapse of the housing bubble and the foreclosures which have followed- all based on outright fraud – have contributed to a debt that Stockman claims can only be recovered by bringing all tax levels back to the Clinton years which will help make an enormous dent in our deficits and make growth possible. While Stockman may be exactly on target, those restorations will not take place. In fact, we know now, the debt will worsen by three-fold as a result of those tax cuts.
While Congressional ‘liberals’ may yet fight back and refuse to go along with these extraordinary cuts, genuine liberals across the country know that the right thing to do would be to get rid of all the tax cuts and bring money back into the government. The tax rates under Clinton provided jobs and wealth across the board. It’s not been the same since. It has been the plan of conservative Republicans since the Reagan era to bankrupt the social programs created in the Roosevelt era when liberalism began and saw its greatest twenty year span influencing American life and prosperity. While Reagan spent us into massive deficits his administration could not overcome the years of growth of the middle class – but it was the beginning.
George Bush and the unregulated financial services community have tried to finish what Reagan started – continuing to limit the government’s income and so its public services. The earnings of the middle class have been static for years while the richest two percent of Americans have made more money than ever before in history.
Now we are beginning to see the disappearance of the middle class itself – and with it the forces that made the American dream a reality and our greatest strength as a nation.
ANDREW AND CHRIS
Being fair, Andrew M. Cuomo and Christopher A. Christie are two politicians who were elected Governors of their States with little serious competition.
He ran for Governor when the Democratic Governor at the time Jim McGreevey, had personal and legal problems and walked away from the job. Corzine, a Wall St. multimillionaire, spent what he had to spend to get elected but he was not a politician and his attempt at good business practices fell flat.
New Jersey suffered from that $34 billion deficit because everything is more expensive in New Jersey than anywhere else in the country. The reason for that is found in a quote from the editorial page of the State’s paper-of-record, The Bergen Record: ” New Jersey is the ‘petri-dish of corruption’. Just think Tony Soprano – and go from there.
Corzine had to raise taxes to develop any kind of a sensible budget and that did him in. Residents of the State insist that they pay the most taxes in the country – no matter what the facts say. Corzine, a smart guy, but not a natural politician, could have run against anyone who knew nothing about government and he would have lost. He did – and he did.
Chris Christie immediately laid out general plans that called for no tax increases and promised forcefully and forthrightly to cut government spending to the bone.
His look and his tough-in-your-face style have made him a conservative Republican (are there any other kind?) hero. His staff has put 163 videotapes of that tough guy stance on YouTube. They get more viewers than Sarah Palin’s.
Christie is going to cut all expenses – teachers, government workers – everybody. He hasn’t cut anything yet but he has withheld State payments in a number of areas like transportation, killed a railroad link from New Jersey to Manhattan and somehow got involved in the drafting of an education grant for Federal money in the Obama Administration’s Race to the Top program – in which New Jersey lost the opportunity to receive a $400 million grant for education this year. The teacher’s union opposed several aspects of the grant and Christie indicated he wasn’t all that interested in receiving Federal money (and control) for education.
Christie has spent much of the election season travelling from State to State supporting Republican candidates for Congress and building his political reputation. New Jersey’s debt is now $39 billion.
He amassed a decent $16 million dollar war-chest for a run for Governor (which eventually grew to $33 million)…had no opposition in the Democratic Party and then ran against Carl Paladino, a Buffalo businessman with some Albany connections in what was hardly an election of equals.
Is it better to be lucky than good? My Mother thought so and it certainly hasn’t hurt Andrew.
With neither the eloquent linguistic ability of his Father, former two-time Governor Mario Cuomo, nor the charm and warmth of his Mom, Andrew spent four years following in the large footsteps of his predecessor Eliot Spitzer, going after Wall St types, fighting the big banks on their unfair loan-shark-like policies to students and attacking the colleges and universities which steered students to those banks. Most recently, after his election to the Governorship, he toured several of the State facilities which house young people in trouble with the law and found that these Detention Centers are all but empty – 600 hundred young people watched by more than 2,800 employees at a cost of millions of dollars.
He found that there is a law (driven by the small but influential Corrections Union) which states that employees in these facilities must be given a year’s notice before being laid off…and that the many empty centers must be cared for by a salaried staff of at least 80 people.
He’s since called for a reconsideration of these policies but one does wonder why he took so long to learn all about this – he has been Attorney-General for four years.
Andrew spent the past four years developing eight “policy books” which speak volumes about ideas and have few specifics in them – whether it’s housing, transportation or education. On education, Cuomo follows the latest “line” – the Obama-Duncan federal policy of granting schools funds on the basis of certain competitive guidelines and he supports charter schools – even though it has been proven that only about 15% of the nation’s charter schools produce any better results than the nation’s public schools.
Because of the ease of the campaign there was little discussion about policies and specific actions planned on any topic in government – except perhaps the biggest job of all: trying to “fix” the nation’s most dysfunctional State Legislature.
There is absolutely nothing in Andrew’s background in government, Albany and politics which has prepared him to take on and defeat the one man around whom Albany runs: Assembly leader Sheldon Silver.
Mr. Silver has more power in Albany than any other leader in history and that includes the number of Governors with whom he has served – including Mario Cuomo and George Pataki – who was Governor for 12 years.
In years past, Mr. Silver seemed to share power with his Republican counterpart in the New York State Senate. But Joe Bruno quit under Federal indictment and the State Senate has become the sad laughing stock of NY State government for the past several years when Democrats eked out control of the Senate only to get into one ridiculous situation after another.
Right now Mr. Silver rules the roost. It is no secret that he controls the votes of every single member of the Assembly, because he controls the funds each needs to do something in their district to keep them in office. Silver also controls the districting of the Assembly – absolutely essential to maintaining the controlled majority under his thumb. He is one of the few NY government officials who refused to sign a petition from civic-minded New Yorkers that would place redistricting the State under the control of an independent commission.
Periodically there’s talk of a coalition of African-Americans and Latinos will try to unseat Mr. Silver. It’s just talk.
He who controls the money and the election district controls the Assembly. And Mr. Silver controls both absolutely.
Can Andrew Cuomo who has already announced plans to put a severe dent in the State’s $9 billion deficit by laying off civil service workers – including teachers (“They are not doing all that well…why should they have all that money”) go nose to nose with Shelly Silver who is supported by most of the State’s civil service unions?
Andrew has never shown that kind of courage before – but he’s about to get his opportunity.
More significantly, there is very little a Governor Cuomo can do without the support of a majority of the Legislature – whether it’s changing school policy or purchasing electric cars in which to do the State’s business, or even in closing all those empty youth detention centers. He simply doesn’t have the statutory power to act independently. We’ll have to see how or if he uses a Governor’s bully pulpit to make a successful case for his ideas.
Two young Governors are coming into office in the worst economic climate in this country in a century. Both have promised to make significant budget cuts to reduce large deficits. Both will have to deal with established unions and with the politicians who have been backed by them.
BREAKING UNIONS
The union serving the employees of Harley Davidson, America’s number one motorcycle manufacturer recently agreed to a new contract which made national news. Harley now has a two-tier hiring system: long-term employees earn a certain salary and benefit range but new employees begin with much less than previously earned. The union has also agreed that during the usual “slow sales period” – basically the three winter months – a certain number of lay-offs of veteran employees would be sanctioned until sales return to normal. What is unusual about that clause (because increasingly unions are accepting certain furlough periods rather than see total job loss) – is that those employees returning from furloughs would not receive their old salaries and benefits but would be paid as the second-tier new employees are being paid.
In Washington, DC, former teacher union head Randi Weingarten, now head of the National Teacher’s Union was pressured to accept a new contract written by the head of the Washington schools – the notable (Newsweek Cover) Michelle Rhee – which permitted teacher’s to be fired on the basis of their tested abilities and teacher salaries to be based on a merit system rather than seniority.
Weingarten never had that pressure applied in New York City – though it was threatened because she had a special friend in Mayor Michael Bloomberg who in eight years gave New York City teachers the best contracts they’d ever received. He based these continual raises on what he termed the great improvements being made in New York City schools – improvements which have not been proven false and misleading.
In any case, Ms. Weingarten was seeing the handwriting on the wall in Washington – and elsewhere as well.
Here’s what New Jersey Governor Chris Christie said about teachers and unions: “I’ve said You punch them (meaning the public) and I punch you. The fight is about who is going to run public education in New Jersey – the parents and the people they elect, or the mindless, faceless union leaders who decide that they’re going to be the ones who are going to run it because they have the money and the authority to bully school boards and local councils.”
Whether Weingarten heard a similar story in Washington, DC before she signed a contract with clauses she’d been fighting her entire career is not clear. But two elements are clear: the public is beginning to believe that teachers aren’t up to the job and that they are unable to really teach the children. And perhaps teachers aren’t really worth the salaries which so often force local taxes to go up. (We’ll have more to say about teachers and schools in the next few weeks)
Soon after the Washington contract was signed there was an election for Mayor. The parents and teachers who hated Ms Rhee turned out in force and despite his reputation as a government leader – one not seen in Washington for years – the Mayor who hired Ms Rhee was soundly defeated. Ms. Rhee left her position as Superintendent soon thereafter. The new Mayor appointed Ms. Rhee’s deputy as the new Superintendent and the union contract is still in force.
As unemployment remains staggeringly high with very little relief in sight, union leaders – who make corporate-like salaries seem all too willing to sacrifice their people to the will of management. Perhaps that will change when the economy improves; perhaps not.
What is certain is that the strength of unions helped build America’s middle class in the years of our industrial growth and might. As unions lose their numbers and their strength because America no longer produces very much, the government service unions have become the powerhouses in the movement.
Now governments all across the country on every level are going broke. Will the strength of their unions help them hold the line against wholesale lay-offs? Is the ‘breaking of unions’ another sign that the middle class has become the – disappearing class?
Martin I. Hassner
Executive Director
Website Managing Editor