Category Archives: politics

An Open Letter to Congress

My local Congressthing, Kenny Marchant, was unwise enough to send me a flyer with a small survey attached. I thought it did not adequately cover the issues, or allow a sufficient range of responses, so I wrote him a letter to go with it. Here it is.

Dear Mr. Marchant,

Your little survey on the Economy & Jobs doesn’t give adequate space for a proper reply, so I thought I would elaborate.

Of possible interest to you is the fact that practically no one is interested in ANY of the issues that you asked us to rank in importance. (A survey on the Economy and Jobs that doesn’t actually mention jobs?) The issues of importance to American families right now are jobs and household expenses, and little else. In short, when families don’t have any money and can’t afford Christmas presents for their children (much less a college education for those children), and are struggling just to put food on the table, I can assure you that reforming the tax code is not something they are even aware of, much less concerned about. Your slate of ‘concerns’ is not only insensitive, but outright insulting.

Your ‘choice’ between two ‘plans’ to ‘spur economic growth’ is almost as bad. ‘Lowering the tax burden’ isn’t going to make a significant difference to any families that actually need the help, at the cost of massively increasing our public debt, and ‘reducing Federal regulations’ is only going to lead to an orgy of misconduct on the part of various corporations, another financial crisis, and another looting of the public treasury. As is always the case with ‘deregulation.’ (A code phrase we all recognize now, Mr. Marchant. We know it means “Let the corporations who are paying for my campaign do whatever they want.”)

Raising Federal spending and taxes has a better chance of success, though I notice that the Republican party, for some reason, is only interested in raising taxes on poor and working class families, while cutting taxes even further for upper income families. A very curious thing, taking more money from those who don’t have it and giving it to those who don’t need it. Perhaps the party could use that as a campaign slogan next year. “We take from the poor and give to the rich. Vote Republican!” Well, perhaps not.

It was increased Federal spending (preparing for involvement in WWII) that finally got us out of the Great Depression (the last time the financial markets looted the country and destroyed the economy), so we know it can work. Unfortunately, it is inevitable that Congress will initiate the wrong spending and raise the wrong taxes.

If you are truly interested in what your constituents think would be an effective plan to spur economic growth, sir (and I know that you are not, and in fact are not even reading this, but perhaps some bored person on your staff has gotten this far), here are my thoughts.

First, cut all military spending by 75%. Spread this reduction out over three years, so that at the end of that time the budget for all military spending is 25% of its 2011 level. (A savings of about $700 billion, give or take a few tens of billions.) Our military expenditures have doubled in the past 10 years, and were at unnecessarily high levels before then. Our preponderance of military power (we spend six times as much as China, and ten times as much as Russia) is not only excessive, but bankrupting us. We are destroying ourselves (and our future military power) for the sake of gross overkill. Any plan to reduce the Federal budget that does not reduce military expenditures is not a serious plan, and everyone knows it.

Second, return the marginal tax on upper income brackets to its Eisenhower Administration levels. Specifically, and this is just pulling a few numbers out of the air (though still a more serious proposal than I’ve seen from most Presidential candidates this year), 70% on income over $500,000 (married, filing jointly), 85% on income over $750,000, 90% on income over $1,000,000, and 95% on income over $5,000,000. (Approximating the upper tax brackets of the Eisenhower era, where the marginal rate was 92% on income over $400,000 – a sum about equivalent to $5 million today.) This will raise additional tax revenue in a way that will not impact consumer spending (the driving force of much of the economy). I would also restore the capital gains tax, but let’s not get into too much detail on a simple survey response.

Third, institute a 2.5% tariff on all imports into the United States, without exception. (This would raise approximately $47.5 billion, based on 2010 imports.) This money would go into a fund. Corporations which move American jobs overseas would also pay into this fund (let’s say $50,000 per worker as a reasonable starting figure). For the first three years of the fund’s existence, an additional $75 billion per year would be added from the Federal general fund.

This fund would be used specifically (and only) for retraining US workers. Grants would be available to people who are currently unemployed or working only part-time and whose household income was under $100,000 the previous year. Higher income families could obtain student loans from this fund at a reasonable rate (say, 5 years at 5% interest, with interest and payments deferred for two years before the five-year repayment period begins). Households with an income over $250,000 would not be eligible.

To clarify:
Household income under $100,000: Grant eligible, no repayment.
Household income between $100,000 and $250,000: Student loan eligible.
Household income over $250,000: Not eligible.

This is the cornerstone of the plan. It is absolutely essential to the long-term and short-term economic health of the country that middle- and working-class families be financially stable and productive. Workers with outdated skills, or skills in a field that has contracted and no longer has room for them, must be given the opportunity to rejoin the workforce at a level at least similar to what they used to enjoy. This is critical not only for the economy (families without money can’t spend, creating a vicious cycle that causes the economy to contract even further), and the Federal budget (people who aren’t working aren’t paying taxes), but also for their own feelings of happiness and self-worth, and the country’s political stability. A worker who used to make, say, $75,000 a year and enjoyed a middle-class lifestyle, but who is now scratching by on $25,000 a year is not only less economically productive, but also likely to be depressed, angry, and looking for someone to blame. None of these things are good for the nation’s health, or his own.

Requiring corporations to pay into this retraining fund not only provides additional money, obviously, but it also requires the corporations to absorb some of the cost of their decision to move that job to a country with cheaper labor, rather than forcing the public to pay the cost while the corporation enjoys all of the profits.

The tariff itself is not intended to be a barrier to international commerce, but simply to add a little friction to the country’s economic frontiers, to encourage American money to stay here and benefit other Americans. A slight leveling of the playing field, to help make American-made goods more competitive against imports. Even if (as is likely), all of the increase in the cost of consumer goods were passed on to consumers, the price increases would not be prohibitive. The tariff would add, at most, 13 cents to the cost of a $5 t-shirt, or $625 to the cost of a $25,000 car. (Not much more than the ‘destination charge’ that dealers tack on.) Such a slight increase would not overly upset consumers, who know that the money is going to help them, and people like them.

Fourth, reform the banking industry. Any bank that is ‘too big to fail’ is too big to exist. That is, if a bank is so big that its failure would have catastrophic consequences, and it must be ‘bailed out’ (given huge piles of taxpayer cash, with no strings attached), that bank is too big and should be broken up into smaller institutions that are not a threat to the national economy. No bank should be able to hold the nation’s economy hostage. Restore the Glass-Steagall Act, to protect commercial and savings banks from being looted to fund speculation by investment banks.

Fifth, the educational system is badly in need of a complete overhaul. We have a system designed to churn out moderately-skilled factory workers, but we have done away with almost all of the factory jobs. Without an educational system to turn out workers suitable for a post-industrial economy, the United States cannot, and will not, enjoy long-term economic productivity and competitiveness. The extent of the reforms necessary there, though, are beyond the scope of this letter (we need to throw out the whole system and start over), but vouchers for parents who chose not to send their kids to public school would be a good start.

Sixth, this country desperately needs real healthcare reform. We currently spend more on healthcare than any other country, and get less for it. Growing healthcare costs will consume an increasing proportion of the GDP in the coming years, dragging down the whole economy and pricing many families out of healthcare entirely. As with education reform, though, a detailed breakdown of what is needed is outside the scope of this note.

This plan would reduce the Federal budget by about $650 over the next three years and add about another $275 billion per year in revenue, cutting the deficit by $925 billion. (More or less, from some quick calculations on a piece of scratch paper.) Calculations for that three years would be a bit more complicated, as the military budget would still be shrinking, and a portion of that savings would be allocated to the worker retraining fund, but I think it is still a healthy improvement to the budget. It would also provide $367.5 billion over those three years to educate and train currently unemployed workers, getting them back to being productive members of the workforce.

I’m afraid this isn’t a deeply thought-out program, just a few brief ideas I’ve typed out over breakfast, but I think they would make a good basis for further public debate and I hope you consider it an adequate response to your query. Thank you for asking.

Skinning The Game

Hey, rich guys, just because you’re sociopaths, that’s doesn’t make you better or smarter than anyone else.

A Person’s a Person…Sometimes

Here is a nice example of what I was talking about.

Where Are the Rich People? Oh, There You Are!

Is it any wonder that Congress takes better care of the rich than the poor and middle class?

The Big Lie

Michael Thomas makes some good points, but he misuses a couple of words. A ‘fusillade’ refers to small arms (a ‘fusil’ was a musket), not artillery. He means ‘cannonade.’ He also uses the term ‘anticommunitarian moral opacity’ as a euphemism for sociopathy.

Yes, They Are

They are indeed as bad as you think. Inept, indecisive, corrupt, out of touch.

It Was The Worst Of Times

Brown’s Law of History: History doesn’t repeat itself. It just gives pop quizzes to see if you were paying attention.

This article by Dominic Sandbrook is perhaps a bit alarmist, but it’s not outside the realm of possibility. Anyone who has studied much history knows that the most terrible, unthinkable things do sometimes actually happen. Citizens of the West today are fat and complacent, but not immune to the same tragedies that have befallen fat and complacent civilizations many, many times before.

Whose Security Are We Spending For?

This is a start. Not a very good start, but a start. Panetta is talking about cutting back some of the unnecessary increases of the last decade, not actually reducing military spending to a reasonable level.

The looming cuts inevitably force decisions on the scope and future of the American military. If, say, the Pentagon saves $7 billion over a decade by reducing the number of aircraft carriers to 10 from 11, would there be sufficient forces in the Pacific to counter an increasingly bold China? If the Pentagon saves nearly $150 billion in the next 10 years by shrinking the Army to, say, 483,000 troops from 570,000, would America be prepared for a grinding, lengthy ground war in Asia?

These questions are, frankly, stupid. Let me rephrase them.

Would 10 US carriers, backed by decades of experience in carrier operations, be sufficient to defeat China’s single barely-completed aircraft carrier that they bought from a salvage yard? Would five US carriers be up to the task?

If we were stupid enough to get involved in a major land war in Asia, would the difference between 570,000 troops and 483,000 really make a difference? Or even 250,000?

Arguments against reducing the size of the military establishment aren’t about national security. They’re about making sure that money keeps getting funneled to defense contractors (and back to the politicians, in the form of ‘campaign contributions’). Our actual military needs are tiny, and could be (and have been) served by a substantial navy (about half the size of the one we have now), and a minuscule army. Our needs are small, but the people hooked on that spending are strong.

Generals and admirals will always ask for more troops and ships. It is old wisdom that generals who go over-budget get scolded, but generals who fail get fired. Even so, our Congress spends even more on defense than the military asks for. Ask yourself why, and who is served by that spending. Is it you? Or the members of Congress, and the corporations that pay them?

Who Owes Who

Paul Krugman is right in that national debt isn’t necessarily a terrible thing. It isn’t good, but it doesn’t have to be terrible, especially when, as he says, the money is owed internally. Cutting government spending is useful, but spending more in some areas can also be useful. That’s why I suggest cutting military spending, but increasing spending on worker training.

It more important to spend on the right things than to not spend at all.

Could This Be…Good News?

The Department of Defense has issued a new Defense Strategic Guidance statement, coincidentally just a few days after I sent the White House my suggestions for cutting the budget. I’ve read the document and, rather to my surprise, it makes a great deal of sense. It appears–and much depends on how it is actually implemented–to return the US to the sort of strategic planning that prevailed through most of the 20th century.

First, a bit of background. Throughout the 20th century, it was a strategic goal of the United States to have a continental ally in any major military involvement, and let them do most of the dying. Whether it was France in WWI, the Soviet Union in the European theater in WWII (and China in the Pacific), or South Korea and South Vietnam, the goal was the same; let someone else provide the mass of infantry that was going to take most of the casualties, while the US provided air, naval, and armored support. Even when Iraq invaded Kuwait in 1990, a major goal of US policy was to involve troops from local allies. Syria and Egypt, as well as other local powers, contributed significant forces. This was not merely a political gesture, to show that the United States was not acting alone, but a continuation of sound US strategic policy. Even in Afghanistan in 2001, the US initially provided leadership and firepower (and large amounts of cash), while local allies did most of the fighting.

The lack of a local ally for the 2003 invasion of Iraq was a major failure of US diplomacy and planning. (Turkey was the obvious candidate, but could not be induced to even cooperate, much less participate in the invasion.) As a result, US forces had to provide most of the manpower (and relatively significant casualties) for most of the war. Perhaps the fallback plan was to use a reconstituted Iraqi army in the allied role, but if so that too was bungled and only in 2008, five years after the start of the war, was the new Iraqi army ready to take over significant operations.

The new Strategic Guidance statement talks a very great deal about allies. I think the DoD has learned a valuable lesson about the costs of going it alone. (I mean no disrespect to the British and other allies who contributed troops, and suffered losses, in Iraq and Afghanistan, but their roles were comparatively minor.) There are numerous sentences like “U.S. forces will plan to operate whenever possible with allied and coalition forces.” This is good strategic sense. In particular, India is emphasized as a key ally. I have been saying for at least twelve years that securing India as an ally should be a key goal of US strategy and diplomacy, so it is pleasing to see this finally recognized at the highest levels.

The new strategy, boiled down to its essentials, is this:

‘We can’t afford to keep doing what we’ve been doing, so we’re going to concentrate on the areas that really need our attention, and make sure we have local allies to help us out.’

This is a perfectly reasonable plan. Naturally, many people object to it, ostensibly because it means abandoning certain features of recent strategic doctrine, but more realistically because lower military spending means some corporations will make less money.

For example, a stated goal of recent US strategic planning was the ability to fight and win two wars at the same time. The new goal is, if it is necessary to fight two wars at the same time, to fight one as a delaying action while winning the other, then concentrate resources on the other to win that as well. This seems like a significant change, but it really is not. The ‘win two wars at once’ capacity, you see, never actually existed. The doctrine fell apart when it was put to the test. To fight the war in Iraq, it was necessary to put the war in Afghanistan on hold, and it could only be resumed in a serious way as US forces were withdrawn from the Iraq war. The new doctrine is not a change; it simply recognizes circumstances as they actually exist.

A couple of other points are worth mentioning. The new statement includes this statement:

“Likewise, DoD will manage the force in ways that protect its ability to regenerate capabilities that might be needed to meet future, unforeseen demands, maintaining intellectual capital and rank structure that could be called upon to expand key elements of the force.”

This is interesting on two levels. First, it recognizes that the DoD would need to expand to fight a major war and intends to keep the capacity to do so. This is nothing new; WWI and WWII were both fought mostly with men who had been civilians a few years before. It also means that as manpower is reduced a greater proportion of officers will be retained. Officers, in other words, are less likely to lose their jobs than enlisted men and women. That is important not only for its implications on future mobilizations, but on current careers and politics within the DoD.

“We will resist the temptation to sacrifice readiness in order to retain force structure, and will in fact rebuild readiness in areas that, by necessity, were deemphasized over the past decade.”

This means that the DoD will not try to maintain troop levels if it doesn’t have the funds to arm, equip, and train them properly. Quality is more important than quantity and the most important feature of a military organization is its firepower and combat capacity, not sheer manpower. The number of people in uniform is a convenient benchmark for politicians to pick up and try to score points with, but it matters relatively little if the troops have to be used.

Overall, I am pleased with the new strategic doctrine and matching cuts in DoD spending. The strategy is solid and the cuts, while they don’t go nearly as far as they could (and, I believe, should), are a good start. It recognizes both the strategic realities of the world as well as the necessity of a strong economy to maintain a strong military. Well done.