GOP - a two-part Coalition?

Brad Todd is a Republican Media Strategist and he wrote an op-ed piece that suggests the Republican Party is operating more like a two-part coalition than a political party. He makes the comparison that Republican and self-identified Tea Party politicians are similar to the coalition governments in European countries. It is an interesting analogy, and his arguments make a lot of sense. Weather or not this ends up being a good thing or a bad thing is left up to the reader to decide, but he does present a unique view of the relations between establishment Republicans and freshmen Tea Party Representatives in the House.

Why the GOP is more a two-part coalition than a party

Debt Charade

Joe Klein at TIME wrote an op-ed piece about the Republican stand-off over the debt ceiling debate. Yes, he's an anti Tea Party liberal, but his scolding words resonated with me, and seem to make sense in the current political climate. The gist of his argument: The Republicans have asked for everything and more and the Democrats have essentially agreed to all of it - including massive cuts and changes to the Big 3 Entitlements (Social Security, Medicare, and Medicaid). Yet, the Tea Party folks will have none of it. They add more and more demands. And, as a result of their failure to compromise, the country will default on it's debt for the first time in history. What does it mean? Read on!

Republicans' Debt Ceiling Charade is Downright Dangerous

Independents = Independence

Say what you will about the 'Tea Party.' They seem to have an iron grip over their message and an expert ability at manipulating the political parties. They have been driving the debate in Washington almost all year - and with great effect. Both parties end up caving to their demands to some degree - Republicans are downright afraid of them. However, since I'm a crazy liberal, I've never truly understood how the Tea Party has managed to influence independent voters so effectively. To me, their message comes across as too extreme.

Nick Gillespie and Matt Welch are writers for Reason Magazine and have co-authored a book "The Declaration of Independents: How Libertarian Politics Can Fix What's Wrong With America." They wrote an op-ed piece that appeared in the Los Angeles Times and several other papers that I think does a good job articulating how groups outside of the two major parties can effectively rally independents and either the liberal or conservative bases to their cause. It is a great read!

In U.S. politics, the Independents have it

The Debt Debate: Who's Winning?

The debate over the national debt and the debt ceiling continues in Washington. Over the weekend, almost every polling firm did a poll asking people who was winning the debt debate - President Obama and the Democrats, or Republicans. Nationally, the President & Democrats win by nearly a 2 to 1 margin - or more - in each poll. I'm still wondering why we're debating the debt ceiling at all, since our economy is still in the toilet and unemployment is still high.

Larry Jacobs, a professor and Director at the Center for the Study of Politics and Governance at the University of Minnesota's Humphrey School of Public Affairs (and my local political idol), wrote a great piece for CNN that focused on the political realities presented by the recent polling. It is a great read!

Who's winning the debt debate?

Obama vs. Boehner - Debt Lock

President Obama & House Speaker Boehner are both trying to convince us that their individual plans are the better plans and that the others plan will destroy America. This saber-rattling is typical for Congress, especially when government control is divided between the parties. However, I find it striking that the debate over the debt ceiling has eclipsed the larger (and in my opinion), more important issue facing our country today - Jobs.

Raising the debt ceiling will not create jobs. Defaulting on our loans will certainly destroy jobs. The debt ceiling has been raised over 70 times over the past several decades, without much complaint from politicians. There are structural issues that need to be dealt with as far as managing our debt and finances are concerned. However, as I stated in an earlier post, massive adjustments to government spending could prove to be detrimental to our fragile recovery.

Alan Silverleib and Tom Cohen from CNN put together a very good article outlining the current stalemate on the deficit. It is balanced and doesn't assign blame - rather it clearly states each side's position and why they believe their side is the better side. Very informative!

CNN Article: Obama calls for compromise amid stalemate in debt talks

Who Owns America? Hint: It's NOT China

Thomas Mucha from The Global Post wrote up a fascinating little article about who actually holds most of America's debt. Included in the article are links to graphs and slide shows from Business Insider - clearly and cleverly illustrating who is lending us most of the money we borrow. I was surprised by the numbers! It's a great read!

Who Owns America? Hint: It's NOT China

How the Deficit Got This Big

Teresa Tritch at The New York Times posted an op-ed piece about how the U.S. Deficit got as bad as it did over the past 10 years. It is a short, to the point, explanation of how the Clinton Era surpluses turned into the Bush Era - and now the Obama Era - deficits. There are charts and graphs that make sense, and are hard to argue against.

Yes, I know the New York Times is among the most liberal newspapers out there, and their editorial section is famous for attacking conservative policies. However, the numbers really can't be manipulated in a way that skews to the left or the right. They are what they are. It is worth a quick read.

How the Deficit Got This Big

Thoughts & Prayers for Norway

Politicoaster offers its thoughts and prayers to the Norwegian people, especially to the family members of the victims of this tragedy.

David Gergen Gets It

I generally find myself screaming at the TV when David Gergen talks about fiscal responsibility. However, his latest opinion piece for CNN seems to be right on the money! I actually agree with almost everything he says in the piece. This is a first for me!

No Way to run a Country

Cut, Cap, and Balance - My A$$!!!

I'll be writing more about this. In the meantime, the general reporting will do.

House Passes GOP Debt Measure

The Truth about the Unemployment numbers

The U.S. Bureau of Labor Statistics released its June 2011 jobs report last week. It found that America added only 18,000 jobs in the month of June – far less than expected. The Unemployment rate remained flat, at 9.2%. In order to even maintain that rate, America needs to create – at minimum – 150,000 jobs a month. 18,000 jobs a month won’t cut it.

The problem with these numbers is that they’re not the whole story. In actuality, the private sector created 57,000 jobs. Nowhere near what we need, but three times more than what we ended up with. The 39,000 jobs that disappeared: Local Government Layoffs. As the last funds from the stimulus package dried up, local and state governments had to start laying people off. Also, deep cuts in local government spending by new Republican majorities in state legislators will likely continue this trend. Add to that the planned historically huge cuts at the federal level if President Obama and the Republican leadership can make a deal on the debt ceiling, the unemployment rate will likely end up topping 10% by the end of the year.

The Private Sector is creating jobs, not enough, but jobs are there. The problem is the government is shrinking, which in turn increases the unemployment rate and decreases economic activity. The government spends money on lots of things, but the biggest expenditure is people. And, those people get a paycheck. That paycheck pays for food, housing, clothing, bills, etc. It is estimated that local, state, and federal spending cuts could eliminate over 1,000,000 jobs over the next 2 years.

The philosophy of Republicans about the government being too large and hurting the economy has some merit, but they fail to acknowledge, and the Democrats fail to explain, that Government has to participate in the free market system in order for itself to function, as well as to spur economic growth.

Look at something as simple as office supplies. Office Supplies are a 50 Billion dollar industry. Legal pads, paper, pens, paperclips, staplers, ink cartridges, etc; they all are physical products and a lot of it is made in the U.S. 3M’s iconic Post-It Notes, one of the most popular office products, owes nearly 15% of its sales to the U.S. Government. Now, imagine if the U.S. Government suddenly stopped buying Post-It Notes. How would a 15% drop in sales affect 3M’s bottom line? When sales go down, private industry downsizes and people are laid off, further aggravating the unemployment numbers and decreasing economic activity.

Republican Presidential candidate Tim Pawlenty talks about a “Google Test” for government. If a Google search turns up a private company that is providing a service that the Government provides, he would eliminate that government service. It sounds good, in theory, but historically, handing over government programs to the private sector hasn’t saved us money in the long term. The thinking goes – if the government stops providing a service, this creates a window for private enterprise to enter and a whole slew of new customers to woo. This creates competition and lower prices for consumers.

In practice, this hasn’t worked well anywhere a Government has turned over a service to the private sector. Russia’s relinquishing telecom services to the private sector resulted in decreased competition and some of the highest rates anywhere in the industrialized world. Japan’s partial-privatization of its railroads ended up leading to more accidents, higher costs, and less dependable service.

In the United States, generally, the government provides specific services that cannot be easily duplicated in the private sector. President Obama’s plan to turn over space travel to the private sector may not work as well as it needs to, considering the safety concerns over getting people into space. The Federal Government has the money and resources to accept that risk – the private sector will not be as lucky.

One of the reasons Richard Branson’s Virgin Galactic Space plane rides have been priced as high as they are ($250,000 per person for a 6 minute junket into low Earth Orbit) has to do with liability insurance. Going to space is dangerous, and getting an underwriter to protect a company in the event of disaster is going to be expensive. The idea that volume will lower costs is true – but getting to that critical mass of customers will be massively expensive – significantly more than we’re paying right now.

The Government is a big player in our economy. It needs to spend in order for the private sector to function. If the debt ceiling isn’t raised and the Government is forced to stop spending money, this will seriously harm the economy. However, massive spending cuts incurred right now, during economic stability, will also be bad. Treasury Secretary Geithner estimated that the federal government would have to immediately cut over $160 Billion in spending on August 3^rd if the debt ceiling isn’t raised. That would lower overall GDP to negative territory and put us back in recession. If the Government voluntarily cuts $300 Billion this year with an additional $4 Trillion over the next 10 years, we will also slide back into recession.

Deficit spending is a problem; there is no doubt about that. However, our economic situation is still very fragile, and reduced economic activity on anyone’s part will make things worse. Since the economy is growing at a paltry 2.1% and considering that Government Spending makes up nearly 15% of our total economic activity, cutting Federal spending even a little could put us back in recession, and exacerbate the unemployment issue even more.

I believe we need to wait until the economy is stronger before we scale back government spending. Yes, there is wasteful government spending out there and it needs to be addressed. There are also important, underfunded programs out there that we need to improve. Right now, our economy is shaky. Until we can afford to scale back, the debt will have to stay.

The world welcomes South Sudan

Stepping away from domestic policy for a moment: The World is welcoming a new nation - South Sudan. The history of Sudan has been rife with trauma over the past several decades. Wars, disease, the mass killings in Darfur - all of which have lead up to the splitting in two of the largest African nation. It is not a perfect solution, but hopefully a big step towards that solution.

Nima Elbagir and Faith Karimi from CNN have written a lovely piece about South Sudan independence. There's also a video of their new President's swearing in, embedded below.

South Sudanese Celebrate the Birth of their Nation

Debt Ceiling Votes: From Routine to Radioactive

Alan Silverleib from CNN has written a very informative article about the current battle over America's Debt Ceiling. He takes us back through history, when the debt ceiling was considered a helpful tool for Congress to manage government spending. He points to all of the times it has been raised (74 times since 1962), and how each time there was not much fuss. It is a great dissection of the hyper-partisan atmosphere currently enveloping our political system.

Debt Ceiling Votes: From Routine to Radioactive

Economic Struggles

The debate about the debt ceiling has been the hot topic over the past few weeks. The standoff appears to be unwillingness by Republicans to increase the debt ceiling without major budget cuts and spending reforms. They contend that the Recession will get worse if we don’t tackle some major budget reforms now. I agree in principle, but the economic disaster that is all but certain to occur if the debt ceiling is not increased will definitely have a monstrous effect on our economy, something Democrats are quick to point out.

I always find it best, when discussing how to fix the economy, to look at the hard numbers.

According to the Federal Reserve Bank, the Great Recession has, in fact, ended. Since the 3^rd quarter of 2009, the U.S. economy has been growing, albeit slowly. Average growth since the end of the recession has been around 2.1% - proof that economic activity is positive, but not enough to spur significant job growth.

Barring any unexpected foreign policy developments, the economy will be THE issue voters will consider during the 2012 election cycle. With unemployment currently at 9.1%, President Obama will have a tough time getting re-elected if things don’t improve, and improve quickly.

To figure out where we should go from here, it is important to look back at what we have done already to fix the economy. Thus far, the U.S. government has spent about $2 Trillion dollars to prop up the economy. This includes the Troubled Asset Relief Program (TARP), The American Recovery & Reinvestment Act (stimulus), the auto industry bailout, the extension of the Bush era tax rates, and other specific bailouts and interest rate cuts by the Federal Reserve. All told, the economy stopped hemorrhaging jobs and positive GDP growth began shortly after most of these things were enacted – around June 2009.

The question now: What do we do next? Though there is positive economic activity right now, 2.1% growth will not be enough to support significant job creation. It is estimated that America lost nearly 8.5 million jobs during the recession. Current economic growth rates have been supporting roughly 150,000 new jobs per month. At that rate, it will take nearly 5 years to replace all of those jobs. Also, the rapid loss of access to capital and credit, as a result of skittish investors and more stringent lending practices by financial institutions, has made it more difficult for companies to hire people.

Economists appear split on what to do now. Some are calling for more stimulus spending – somewhere between $500 – 900 Billion in infrastructure investment. Some are calling for broad-based corporate tax holiday in order to spur job creation. Some advocate a middle-road with a little of both. Some argue that no additional stimulus is needed, instead emphasizing on reforming the tax code and reforming large government entitlement programs to stabilize the budget and bring down the debt, which they say will stabilize the markets.

Depending on your political stripes, these plans are either the “silver bullet” or the “death knell” of our economic future. Personally, I believe each idea has merit, but considerations must be made for the long term stability of our economy, and the effects of deficit spending on the world.

If we go the “stimulus” route, and spend another trillion dollars on infrastructure, proponents claim that the economic activity from the building of roads, rail, bridges, power plants, airports, etc., will have the net effect of getting private industry an incentive to hire. Build a new road, and businesses will open along it. Build a new rail station and it will foster new development in the areas around it. Essentially: If You Build It, They Will Come.

The corporate tax holiday – a suggestion recently championed at the New Hampshire Republican Debate by former Senator Rick Santorum (R-PN) – would essentially allow all business entities in the U.S. to not pay any corporate income taxes for the next 5 years. The idea is that if corporations don’t have to pay taxes, they will have more money available to spend on expansion and investment – hiring new workers, opening new plants and factories, etc. Hopefully, that would accelerate economic growth across the board.

A complete reform of the Tax Code would involve setting lower rates for individuals and corporations, and the elimination of most – if not all – tax deductions and credits. Essentially, whatever percentage bracket you land in is what you pay – period. Most plans for this include the elimination of the Estate Tax (the so-called “Death Tax”) and the Capital Gains Tax. With the latter, it has been suggested that any capital gains should be counted as regular income, and taxed accordingly with your income taxes. The idea behind this is that a simplified tax code can more adequately predict revenue levels for the Government, and make budgeting easier. That in turn could help reduce and ultimately eliminate deficit spending.

All of these plans have some merit, but I don’t believe any one of these things is the “silver bullet.” I don’t believe economics can be fixed with simple solutions – our economy is WAY TOO complex for ‘simple.’ However, a balanced, non-partisan, combination of aspects of all of these things may be helpful. Investing in infrastructure is always simulative – especially since the construction industry has been hit particularly hard the past few years. The Federal Reserve and the International Monetary Fund have hard evidence that Tax Holidays can provide short term economic acceleration – sort of like a jump-start for the economy. And, reforming the Tax Code – well – it would be nice not to need a Doctorate in Mathematics and a Masters Degree in Law just to file personal income tax these days!

I believe our political leaders need to pause and look at where we are now, versus where we were when this mess started. Republicans need to stop perpetuating the myth that the economy is still in recessions – by any definition, it’s not. Democrats need to stop touting the “success” of their economic policies as heavily as they have. Yes, the bleeding has stopped – but this is not a success by any real measure.

President Obama used an analogy of the American Economy being a car, and Republicans drove it into the ditch. The Democrats may have gotten the car out of the ditch, but there’s still A LOT of work to be done before we can use the accelerator again!

The Campaign Logos of 2012

The Seal of the President of the United States is an iconic image - one that is instantly recognizable and conveys strong feelings about power, America, and Democracy. It is probably the most recognized political logo in the world, transcending party politics and ideological divides. As the 2012 Republican Presidential candidates start up their campaigns - they try to find a similar logo to represent and differentiate themselves.

Ashley Killough from CNN spoke with two graphic designers to get their opinions on how effective they felt the 2012 Republican candidates' campaign logos were. It's a fascinating read - especially since it's nonpartisan. The designers comment only on the style of the iconography, not the message behind it.

Political Logos Define Campaigns