Political Sex Scandal? There's an App for that!

As constant as the Wind, political sex scandals are always happening. There was a bit of a lull after the Anthony Weiner scandal, but summer is nearly over and we needed a new one. This one comes from our friends in Puerto Rico.

Ignore Early Polling: It's Usually Wrong

Ed Hornic from CNN wrote a little blurb about how all of the early polling for the Republican Presidential nomination is pretty much useless, since pre-primary polling is almost always wrong. Right now, the world (i.e., the media) is all about Governor Rick Perry, who has catapulted to GOP front-runner in the most recent Gallup Poll. However, if you look at polling taken around the same time before the primaries for both parties, who was leading in the polls doesn't match up with who ended up winning the nomination.

Early Presidential Polls No Indication of Eventual Outcome

It's Perry Time!

Texas Governor Rick Perry topped a recent Gallup survey of Republican Presidential candidates by a wide margin - beating former Massachusetts Governor Mitt Romney by double digits. It appears that the Rick Perry movement is gaining some serious momentum in Republican circles. I don't want to speculate, since it is still 4+ months until the first caucuses of the 2012 election, but Perry could very well end up being the one to beat for the Republican Nomination.

Gallop Survey Results

Perry vs. Bush via Jeanne Moos

I've seen far too many articles comparing Rick Perry to George W. Bush. However, Jeanne Moos's take on the comparison is hilarious, relevant, and entertaining! Take a look at the video below.

Why the Presidential Selection Process is Broken

I'm using the image of Rick Perry being touted as a potential front-runner for the Republican nominee to illustrate a point: Our Presidential Selection process is broken. Not to disparage Gov. Perry - he has a decent record in Texas and seems to be a genuinely nice person. However, on a political level, the idea of a Perry Presidency is hilarious. Another Texas Governor - a good ol' boy with a drawl in his voice - pandering to social conservatives and winking sympathetically at the majority of the electorate. Does this not look familiar?

Government to Citizens - Gone Fishing!

America’s economy is struggling. The jobs picture is bleak. The stock market is in chaos. What is Washington’s prescription: a vacation?

The House & Senate went on vacation shortly after the debt ceiling crisis was averted. Now, President Obama is taking some R&R. What the White House dubs as a “Working Vacation”, it appears that our elected officials have exhausted themselves so much that they are taking a break from work – until after Labor Day.

In the mean time, our Nation’s unemployment rate hovers around 9.2%. Economic output is down overall. European debt issues and uncertainty in the U.S. have caused wild gesticulations in the stock market. There is a lack of confidence in our elected officials. CNN’s latest polling shows that a majority of Americans will not re-elect their current congressional representatives – the first time that has happened since the question was first asked 20 years ago. I would guess that this extended vacation won’t help.

I do not want to complain too much about Congress and The White House taking a break. It is common for the legislature and executive branch to take vacations. If people recall the summer of 2009, when Congress took its vacation there were all those town hall meetings of people screaming about the President’s Health Care Plan. These vacations generally give our elected officials the chance to meet with their constituents at home. However, this doesn’t appear to be THAT type of vacation.

As the country teetered near the brink of default, Congress and the President battled it out over spending cuts. What emerged is a half-hearted plan that may help limit the growth of our debt, but won’t do ANYTHING to pay down the existing debt. Interest on our existing debt is the single largest expense of the Federal Government – more than defense, Social Security, Medicare/Medicaid, or anything else. Congress is taking a break because it achieved something that doesn’t solve the problem?

However, there appears to be some news from The White House. President Obama will be making a speech after Labor Day to unveil his plan for job creation and fixing the current economic picture. From the parts that have been leaked to the press, it appears to be a hodgepodge of things the President has already requested: an Infrastructure Bank, extensions of unemployment benefits, job-training assistance, payroll tax holidays for workers and businesses – things that were negotiated away in last minute budget deals with Republicans in the House.

While I applaud the President for not giving up on these ideas, it seems to me to be “Too Little, Too Late.” Not to mention, politically impossible.

An Infrastructure Bank is an idea that has been tossed around for a while. In theory, it would be an extension of what was started in the Stimulus bill – money set aside for rebuilding America’s infrastructure with an emphasis on things that can be started right away. The Bank would be funded by closing some loopholes in the Federal Tax Code, thus not adding to the deficit. An initial $50 Billion dollar investment would get the ball rolling, with continual funding of $30-70 Billion a year as the taxes collected from the loophole closures fluctuate over time.

Not a bad idea, but the political will to close enough loopholes to raise $50 Billion a year doesn’t exist on the Republican side of the aisle. This would amount to a 50 Billion dollar tax increase – something I believe will not garner ANY Republican support.

The President is also expected to push for another extension of unemployment benefits. The Republicans will only agree to an extension if it is accompanied by cuts of equal or greater value. Depending on how long of an extension the President pushes for, it could cost anywhere between $10-70 Billion. It isn’t clear where the Republicans would request the cuts to be made, but I would guess they would go after the budgets for the new Consumer Protections Bureau (which they openly hate) or Medicare and Medicaid (which they openly want to end).

A payroll tax holiday is something the Republicans would be willing to support. However, the President will more than likely request that the holiday be paid for by increasing revenues elsewhere in the tax code, specifically ending some corporate deductions that are wildly popular with the oil and natural gas industries. Republicans have and will continue to block any attempts at raising revenue through corporate taxes, and therefore this idea will likely be dead on arrival.

There may be more to the President’s plan than has currently come to light. However, given the current political climate, it is doubtful that the President’s plan will become law – at least not in its current form. The gridlock that plagues Washington is constant, but over the past few election cycles we’ve seen an almost cult-like atmosphere of ideological entrenchment.

I’m all for party loyalty, but not at the expense of the well-being of our Nation. Republicans are going to have to accept that taxes will have to go up. Democrats have to accept that entitlement programs need to be reformed. The two sides of our political spectrum need to meet in the middle, instead of pulling and pulling until the “middle” is closer to their side.

The random and unnecessary partisan bickering over false crises has distracted too long from our larger problems. People need jobs. We need to grow the economy. We need to deal with our long term structural debt. These are the issues we need to focus on as a Nation, and our leaders need to work diligently in order to address them.

After Labor Day, any additional vacation time will not be tolerated until we have a plan.

The Omaha Oracle Speaks: Is He Right?

Warren Buffett, that financial genius and investment guru extraordinaire, wrote an op-ed piece for The New York Times on Sunday that has caused some controversy. He is advocating higher taxes on the "Super Rich" - specifically creating new tax brackets for ALL income over $1 Million and $10 Million. It's a bold plan, especially since it's being proposed by one of the wealthiest men in the world (Buffett paid nearly $7 Million dollars in Federal Income Tax last year). However, the current state of the Republican Party would sooner nominate Fred Karger for President than support a tax increase of any kind.

Two respected columnists have written response pieces to Mr. Buffett's op-ed. Jeffrey Miron is senior lecturer and director of undergraduate studies at Harvard University and Senior Fellow at the Cato Institute. He is the author of "Libertarianism, from A to Z." He wrote a piece against Buffett's argument - stating that the resulting tax increases would stifle job creation, and not actually net much revenue for the United States. William G. Gale is a senior fellow at the Brookings Institution and co-director of the Urban-Brookings Tax Policy Center. He wrote in support of Mr. Buffett's argument - citing historical patterns in how government spending and taxes have fluctuated over decades, pointing out when government shrinks and when taxes are raised.

Both sides make a compelling argument, and both sides views are worth a look.

Jeffrey Miron's Op-Ed Piece: Why Warren Buffett is wrong

William G. Gale's Op-Ed Piece: Buffett is right - raise taxes on the wealthy

Ames, Iowa GOP Debate - It was Fun?

I missed the Republican Debate last night, but I am going to watch it today and give my take on it. In the mean time, pundits from all sides are posting their re-caps of the debate. I came across this one from Todd Graham. He is the director of Debate at Southern Illinois University, Carbondale. He has coached his teams to national championships, and has been honored with the Ross K. Smith national debate coach of the year award. He wrote a short blurb about how he thought the recent debate was "fun."

Debate Coach on GOP: Fun dust ups, missed opportunities.

Apparently, we Hate Congress

CNN has released a poll taken in the wake of the debt ceiling debate. Apparently, a majority of Americans now believe that their congressional representatives should NOT be re-elected. This is the first time a majority of Americans have felt that way about their specific congresspeople since the question was first asked 20 years ago. It also shows that the GOP and the Tea Party have fallen out of favor with a majority of the American Public, while the Democrats have managed to maintain their standing - now 14 points higher than any other group. If you're a statistics geek, like me, you'll enjoy reading the poll!

CNN/ORC Poll Results (Aug. 9th, 2011)

Taxes Suck (but we need them anyway)

Liberals are always talking about how the wealthy need to pay their “fair share” of income taxes in this country. I consider myself to be a liberal, but this argument is a stretch, to say the least. The wealthy DO, in fact, pay their fair share. Those in the upper echelon of income earners pay a substantially larger chunk of income in taxes than the rest of us. As of 2010, the top 5% of wage earners in this country pay 40% of the income taxes collected in this country. The average multi-millionaire pays nearly $1.5 million in income taxes each year – more than 150 times the amount the average American pays. And, this is counting all of those sweet deductions that the wealthy get to take advantage of.

That being said, I still believe that the wealthiest among us should pay more in taxes because they can afford to. For me, it isn’t about the percentage of income that is a deciding factor – it is the actual available income, after taking into account real life expenses.

For an example, we’ll look at the 2010 federal income tax and compare a family of four making $60,000 a year and another family of four making $2,000,000 a year.

The middle class family, at $60,000 a year in joint income (Schedule Y-1), will be in the 15% bracket. They will pay a total of $8,165 in federal income taxes. Not an insurmountable amount, but that is only part of the overall financial burden. According to the Department of Housing & Urban Development (HUD), the average middle-class American family spends roughly 35% of pre-tax earnings on housing (rent or mortgage, insurance, utilities, etc). That means our middle class family will be spending $21,000 on housing costs for the year. That lowers their available income to $39,000 a year. Add to that the $8,165 in federal income taxes, their total available funds drop to $30,835. Of this amount, roughly 28% (according to the Department of Commerce) - will go to the “other” taxes, state, local, property taxes, sales taxes, etc. – that’s $8,634. Now, the middle class family has $22,201 left. Factor in food, car payments, 2 dependent children, trying to save for the children’s college education and for the parents’ retirement, and you’re looking at a pretty tight financial situation.

The wealthy family, at $2,000,000 a year in joint income (Schedule Y-1), will be in the 35% bracket. They will pay a total of $765,582 in federal income taxes. That is A LOT of money, but considering the total income, they are still sitting pretty with over $1.2 million dollars which makes the next part VERY disappointing. HUD estimates that the average total housing costs for people who make over $1,000,000 in this country hovers between 1-8% of pre-tax earnings, generally because folks with this much money can buy their homes outright. No mortgage payment = lower overall costs. We’ll slap this family with the 8% number and they’ll be paying $160,000 in housing expenses. They’re still over $1,000,000 in available funds. Also, the average in “other taxes” the Dept. of Commerce says those who make over $1,000,000 pay out of their remaining total: 5%. Our wealthy family has $1,074,418 after federal taxes and housing costs. Subtract 5% of that – which is $53,721 – and they are left with $1,020,697 for everything else.

Now, this is a very simplistic comparison, and doesn’t take into account the multitude of federal tax breaks and incentives both families are able to take advantage of. My point with this comparison is to explain how the current tax system is easier for the wealthy to handle than it is for the middle class.

There is a lot of discussion in Washington about reforming America’s tax code. Many have argued that, in exchange for the elimination of most tax incentives and loopholes, we would be able to lower the overall tax rate to 25% or less, only use 3 tiers, and still generate more revenue. I believe that could work, and make the system fairer overall.

I would institute a 3-tiered tax rate that started at the poverty level, plus 25% (as of 2010, that would be $13,952 for individuals or $27,195 for a family of four). Anyone at that level or lower would pay no federal income tax. From that level to $100,000 for individuals or $250,000 for a family, an income tax of 10% would be levied. From $100,001 for individuals or $250,001 for a family to $1,000,000 for individuals or $2,500,000 for a family, an income tax of 17.5% would be levied. And for all income over $1,000,001 for individuals or $2,500,001 for a family, an income tax of 25% would be levied.

No deductions would exist for the top bracket and the upper half of the middle bracket. The lowest bracket and the lower half of the middle bracket would be allowed to make some deductions, especially for big ticket items like college, mortgage interest, etc. Also, things like capital gains and estate inheritance would be rolled into general income – without any special tax. So, if Aunt Mildred dies and leaves you $10,000 or you cash out $300,000 in stock options – simply add that amount to your year’s earnings and whatever bracket you land in, that’s what you’ll pay. To me, this seems like a much more predictable and fair way to levy taxes than our current system.

Of course, there are a host of things to consider. And, this issue is so complex that it needs and fully deserves a long, thoughtful, and thorough debate in Congress and with the American public. Both sides have legitimate ideas about the tax code, and both sides should be granted the right for their ideas to be discussed and debated.

Taxes are a burden, but a necessary one. The more we can do to make the system fairer and more effective, the better off we will be as a nation.

S&P's Political Miscalculation

Adam Sorensen at TIME wrote a quick blurb about S&P's rationale for lowering the U.S. government's credit rating. Specifically, he found fault in the political argument S&P made for its decision. While in the long run most economists feel that the downgrade in America's credit rating will have little effect, short term consequences are unclear, and Sorensen wonders weather or not an attack on America's political system by Standard & Poor's will result in anything positive. He also questions the validity of the argument - is the hyperpartisanship permeating out of Washington anything new? His blurb is a fascinating read! And, there's a chart!

S&P's Political Miscalculation

Default Averted. Now, where are the damn jobs?

Now that the debt ceiling “crisis” has been averted, I thought that Washington would FINALLY start talking about jobs. Instead, we are greeted with word that Congress is going on vacation – for A MONTH! They are going, despite the fact that unemployment is still over 9%, the economy is still sluggish (anyone notice the nearly 800 point slide on the Dow this week), and despite record profits at most major corporations, no one is hiring.

I never intended to use this blog as a place to vent frustrations – rather, I wanted to openly discuss the politics of the day in a fair way. However, I am finding it increasingly difficult not to scream at the top of my lungs at some of the big political players in Washington. In order to maintain some semblance of sanity, I would like to talk to the big DC players in this drama.

First, I would like to say something to House Speaker, John Boehner (R-OH).

Mr. Speaker, when you were elevated to this position, you said that the mid-term elections showed that the public was upset with the economy. You said the stimulus didn’t work, and you and the Republican majority in the House were going to focus “like a laser” on jobs so Americans can get back to work.

Well, I still don’t see any jobs. I’d also like to point out that the first 10 bills the House took up (H.R.1 to H.R.10) had NOTHING to do with jobs! H.R.1 was a procedural budget bill. H.R.2 was a symbolic attempt to repeal Obama’s heath care reform bill from the previous year. H.R.3 was an anti-abortion bill. H.R.4 was a Tax Bill that adjusted the rules of the 1099 form. Do I need to go on? Where are the jobs?

The only thing you’ve said about jobs is that Government needs to get out of the private sector’s way - i.e., lower taxes and less regulation – and the jobs will come. Corporate taxes are lower now than they were under Reagan and corporations are reporting record profits in almost every industry, so the regulations don’t seem to be hurting. Corporate America is sitting on hundreds of BILLIONS of dollars – cash – and still no jobs. Your plan isn’t working.

You make a point of saying how much you want to work with the President. I believe YOU want to, but I don’t believe a lot of folks in your caucus do. The Tea Party folks essentially have you in a full-nelson headlock, and you continue to placate them versus doing what lawmakers are supposed to do: work with the other party and compromise so a solution can be found. You and the President are Statesmen. The folks of the Tea Party Express are not. Don’t play this game with our Nation – because in the end – you will lose, and so will your party.

Second, I would like to say something to Senate Majority Leader, Harry Reid (D-NV).

You are the Charlie Brown of Political Compromise. The Senate Republicans are Lucy. If it isn’t clear to you now that all of the supposed deals, Gangs of Six, and any other cockamamie idea for compromise Senate Republicans have proposed are false hope on arrival, you should resign. Each of your attempts at an equitable deal between Senate Republicans and Democrats has failed in a spectacular fashion. I understand that you lost several members of your caucus during the mid-terms, but you should not be so naïve as to believe you can build a coalition with Republicans in their current form.

Why aren’t you and the Democratic MAJORITY writing legislation to your standards, and then shopping it around to the few moderate Republicans there are left in the Senate? I know they won’t sign on to anything, but you can at least find 7 Republicans to allow a procedural vote to end a filibuster, right? And if not that, isn’t there some “Pork” you could bribe them with?

Each time I read about another bipartisan “Gang of” whatever – I cringe. I know you’re trying to be optimistic, but the time for optimism is over. Why? Because, it’s not working!!! Voters like to see courage. They like to see guts. They don’t like to see weakness. Each time you agree to one of these bipartisan talks and each time it ends up blowing up in your face, it makes you appear weak. You need to come from a place of strength – actual or perceived – and then fight for your principles. Compromise some, but not on EVERYTHING. Otherwise, what do you stand for?

And, finally, I would like to say something to President Obama.

Mr. President. I voted for you, but I am pretty dissatisfied by your performance. I cannot blame you for the actions of Congress, but I can criticize you for your lack of a message.

You pushed through the Stimulus, the auto bailout, Healthcare Reform, Financial Reform, an extension of the Bush Tax Cuts, the repeal of ‘Don’t Ask, Don’t Tell’, and a host of other things. On most of these, you stated your position, and then let Congress take the lead. Frankly, I don’t understand why – especially now.

The Executive Branch has a unique position in Government: It has the ability to set and drive the agenda. For better or for worse, people will stop and listen if you speak – it takes a bit more for the House and Senate to get everyone’s attention. Why aren’t you out there fighting for jobs? You talk about things you’d like to see. I like the Infrastructure Bank you’ve mentioned. Why aren’t you on TV every day telling us about it? You talk about Rebuilding America’s Infrastructure but you don’t explain how we’ll do it. You don’t adequately explain why it’s important. You don’t ‘sell’ your ideas in a compelling way. For such an eloquent speaker – you as Executive should have complete control over our national conversation. But, for some reason, you’ve been rendered mute.

You continue to reach out for compromise with Republicans. It’s admirable, but at this point, it should be painfully clear that their interest is to take your job away. I understand that’s the nature of politics, but why don’t you get it? I voted for Hillary Clinton during the Democratic Primary in my state because I felt she could handle the swampland that is DC. I didn’t think you could handle it. You may believe you are staying “above the fray” by taking a back seat during the negotiation process, but you are coming across as detached, aloof, and indecisive.

You need to find that inner strength you had during the 2008 campaign. If you can’t rally people, there’s no way anything will get done. The President has the ability to lead like no one else. If you don’t use that ability as effectively as possible, you will lose it forever.

All three of these men have a responsibility to the American People to govern effectively. If they all fail to do so, we all suffer. This isn’t specifically about ideology or party affiliation, it’s about Governing. Our elected officials are elected to Govern. When they fail to do that, we get rid of them.

Over 14 Million People are unemployed right now. That is 50% more people than the margin of votes between Obama and McCain in the 2008 election. If those 14 Million People don’t see a light at the end of this dismal economic tunnel, or at the very least, see our lawmakers diligently working to create that light…

The term MASSIVE UPHEAVAL comes to mind.