State of The Union 2012

[heironymouspasparagus]

Did you notice how the comments on something as simple and common sense as banning insider trading by members of Congress - Republicontins all stayed seated. 

[we vs us]

(Warning: long Conan ramble)

Oil prices have hovered around $100 a barrel and gasoline between $3.00 and $3.75 a gallon for three years. That's sapped the consumer economy,  brutalized the poor, and helped to stifle job growth, but hey, smile happens!!!

Free trade agreements have resulted in the loss of millions of jobs overseas, but it's allowed us to export more goods manufactured by fewer Americans.  But hey, smile happens!!!

Obamacare is supposed to create lower cost healthcare, yet ever since the passage of this legislation, procedure costs and insurance costs keep going up in a desperate profit grab prior to new regulations (just found out our company's premium is going up 8.5%).  You don't think that's brutalized people without insurance or driven up payroll costs do you?  Not to mention the uncertainty to American employers who cannot plan budgets or payroll needs until they know for certain what this will cost them.  Damn the unintended consequences, we got health care reform!  Hey, smile happens!!!

(Our previous health insurer dropped out of the business as a direct result of that legislation.  So much for competition to help keep costs lower.  Don't you think it's hard to forecast costs from year to year when variables like health insurance keep rising?)

We created a huge new bureaucracy with Homeland Security and TSA which has choked foreign tourism to the United States (in case you missed that tidbit in the news last week http://overheadbin.msnbc.msn.com/_news/2012/01/19/10192546-travel-experts-applaud-obamas-pro-tourism-measures) as well as air travel within our borders.  Rather than profile likely terrorists, security agents feel up 80 year old women and 5 year old children and make air travel such a hassle many people elect to drive even on long trips these days.  High fuel prices and lower passenger loads are choking the airline industry and killing airline jobs, but hey, smile happens!!!

The economy is in the crapper and your solution is "smile happens"?  That's not a solution.  Real jobs are lost when smile happens.  Costs to consumers go up when smile happens.

I don't see how there could be a more equitable tax set up than there is now.  Nearly half (or slightly over half depending on whose stats you look at) pay no federal income tax.  Lower income earners also qualify for all sorts of credits to help them along.  We give lower income earners all sorts of credits for all the kids they have, college tuition paid, childcare, etc.  We all pay into social security and medicare.  Everyone should be required to pay into their retirement or for a permanent disability and retirement healthcare plan, don't you think?

That said, letting the Bush tax cuts expire won't seriously affect job growth once the economy is in a full and sustained recovery.  Even prominent Democrats (including President Clinton) recognize that a down economy is not the time to start increasing income taxes or re-writing the tax structure.  Obviously the tax code seemed to work during the Clinton era, but we also were in an explosive growth mode due to a wealth of new technologies and the exploitation of the internet during the 1990's.  I don't think we need any new tax cuts at this juncture.  I won't vote for a candidate who promises that this next election either.  We simply need a leader who inspires confidence in the free markets, not fear and hatred of those at the top.  That's not how you create jobs, that's how you secure votes from the underclass, giving them false hope that penalizing the wealthy will make them whole.  

Even still, taxation like the Clinton era won't lift all classes.  Even a draconian tax code with a 90% maximum rate and reissuing money to the under and middle class wouldn't raise all classes, it would simply create a bigger entitlement mentality.  The wealthy would simply move their wealth to safe havens and the ruling oligarchy would retain most of the remaining wealth, it's proven time and again throughout history.  Cuba, USSR, anyone?  There will still be an underclass and no "economic" or "social" justice as the left is so fond of.  You don't lift the underclass by confiscating from the successful.  Those who have successfully gotten out of the underclass or moved upward in the middle class or moved from the middle class to upper class, didn't do so via any sort of wealth redistribution, economic justice, social justice or spatial mobility plan put forth by the government.  They did it via their own efforts and motivation to improve their lot in life.  There's no shortage of grants, loans, free Vo-Tech programs, and low cost in-state college tuition programs that people simply don't take advantage of.

You've been sold a bill of goods with the rhetoric of social justice, economic justice, and social and spatial mobility.  The government simply cannot create enough incentives nor high paying jobs in the government budget to raise the entire middle class.  That's a fairy tale campaign promise and nothing more.  You cannot illustrate a specific model with real numbers to show how this mechanism works, because it doesn't exist.  I implore you to search to your heart's content and other than vacuous figures or theory, you will not be able to come back with a model that shows if you take X amount from the wealthy or raise the tax rate by a given amount, you can create X amount of net jobs which are all above the poverty line.

Social and economic mobility is available for those with work ethic, imagination, and education.  The people I hear complain the loudest are not doing anything to mobilize themselves.  What productivity has come out of someone sitting (or sh!tting should I say?) at an occupy rally for four months?  None.  It's gotten the attention of the media, but it's not brought that person any closer to gainful employment.  Bitching about the problem  and not looking for work or attempting to get education in a field that will bring gainful employment is being a part of the problem.

It would appear you've been indoctrinated with the idea that money will cure any problem.  We've tossed billions upon billions into education and paid some of the supposed best and brightest to lead the education system through one reform after another and yet, we still have an education problem.  It's not the facilities, it's not the teachers, it's the lack of priority placed on education and bettering ones self within the home.  If the parents are not examples of success and/or they constantly shove a paradigm of hopelessness and dependency into their children's heads, education will never be a priority and that child will end up in the underclass.  A parent stressing the importance of education and being there to mentor their child's education will do far more for social and economic mobility than a thousand tax increases on the wealthy.

Not sure how best to respond to all of that.  For one thing, when I say "smile happens" I mean that unintended consequences shouldn't be an excuse not to engage government to improve our lives.  There're unintended consequences in private industry, too, but that's never brought up as a reason not to act.  As I said in my original response, we should rely on facts, make educated decisions using the best resources available and then let the chips fall where they may.  That's not nihilism, that's pragmatism.

As for taxes, no one in any corner of the government is proposing taxes at a rate that outstrip the Clinton era.  In fact, we can barely bring ourselves to talk about them outside of internet chat rooms (because that's where the Bush tax cuts, if they sunset, will place us -- back to Clinton era levels).  Of course, the Clinton era itself was pretty permissive as far as the tax code goes, especially in comparison with the heyday of American wealth confiscation, which was the 1950's. 

As far as class mobility goes, there're plenty of good hard data that says -- pretty definitively -- that we're much less mobile than we have been in a generation.  We're not only more unequal but there's far less movement between income groups.  What the data says is, the American dream that you and Gassy lionize is a pale shadow of itself.  Hard work, good education, timely investments -- these things pay off far far less than they ever have.  This is not to say they don't at all, but it's getting rarer and rarer.  This is my personal frustration with our political talk in this country.  I want the exact same thing that you do, which is to say opportunity for my daughter.  I want her to earn her education, her career and her success.  I want her to work for it and enjoy having done the work. But I want there a chance for her work to pay off.  And at this point, that chance is vanishingly small.  But you and I still want the same things for our kids, we just disagree about the availability of it.  You think it's common and achievable and I think it's going down the tubes.  Unfortunately, I've got numbers to back me up, and I wish it were otherwise . . . .

And just FYI, if we were to let the Bush tax cuts go, the money should go to deficit reduction, infrastructure repair, and R&D.  You know, all that investment in our future crap.  The point isn't to take money out of the pockets of rich people and hand it out in the form of krugerrands down on Skid Row.  The point is that we should use it to repair the many things that make us great as a nation that have started to decay in front of us.  Bridges, roads, rail, ports, airports, the electric grid, etc etc etc.  There's so much of it to be done.  Of course there's always the next internet to invest in, and shoring up the finances of the country.  Essentially good business practices.  That's what tax money should be for. 

[Red Arrow]

The point isn't to take money out of the pockets of rich people and hand it out in the form of krugerrands down on Skid Row. 

You have some convincing to do even though I expect your example is somewhat figurative.

[Conan71]

Not sure how best to respond to all of that. 

And just FYI, if we were to let the Bush tax cuts go, the money should go to deficit reduction, infrastructure repair, and R&D.  You know, all that investment in our future crap.  The point isn't to take money out of the pockets of rich people and hand it out in the form of krugerrands down on Skid Row.  The point is that we should use it to repair the many things that make us great as a nation that have started to decay in front of us.  Bridges, roads, rail, ports, airports, the electric grid, etc etc etc.  There's so much of it to be done.  Of course there's always the next internet to invest in, and shoring up the finances of the country.  Essentially good business practices.  That's what tax money should be for. 

I know, reality is like kryptonite to your liberal way of thinking, that's why you are struggling for a response

Unfortunately, the way in which President Obama frames his discussion on the rich not paying their fair share does give the underclass and those less educated than you the notion that they will be getting their "Obama money" if we soak the rich.

I agree that we need to re-invest in our infrastructure and start paying down the debt.  I even agree a return to the Clinton era tax policies are far from draconian.  In fact I think you and I are in total agreement on your last paragraph.

Still though, it doesn't erase income inequality or social injustice or whatever one wants to call it.  I suspect the upper, middle, and lower income levels are always going to remain roughly the same as a percent.  Every economy must have business leaders, professions which require advanced degrees, professions which require baccalaureate-level degrees, skilled trades which require technical training, and unskilled trades.  And then there is the wildcard in all this: the entrepreneur.

None of that indicates there's any inherent barrier to bar anyone from rising from nothing to being the next Barack Obama or Warren Buffett.

[nathanm]

Still though, it doesn't erase income inequality or social injustice or whatever one wants to call it.  I suspect the upper, middle, and lower income levels are always going to remain roughly the same as a percent.  Every economy must have business leaders, professions which require advanced degrees, professions which require baccalaureate-level degrees, skilled trades which require technical training, and unskilled trades.  And then there is the wildcard in all this: the entrepreneur.

This is true. Nobody, or at least nobody credible, wants everyone to earn the same income or anything silly like that. There will always be a top and a bottom. What I and others want is a return to the days when there was more class mobility and, beyond that, to the days when there was a larger middle class. The fact of the matter is that the tax code has been rigged to advantage one form of income that accrues mainly to those at the top over the form that most all of us share. How about we treat them equally and see how that works out?

[heironymouspasparagus]

I agree that we need to re-invest in our infrastructure and start paying down the debt.  I even agree a return to the Clinton era tax policies are far from draconian.  In fact I think you and I are in total agreement on your last paragraph.

And yet, you still argue against what you believe.


How about insider trading?  ...and this question is open to everyone... Is it right that the members of Congress should have the special privilege of being allowed to gain information unavailable to the general public and then freely trade and profit based on that information?


(And yeah, we know all about how anyone else who did that would be rewarded with a soft, cushy vacation in a Federal golf resort detainment center...)

[Conan71]

And yet, you still argue against what you believe.


How about insider trading?  ...and this question is open to everyone... Is it right that the members of Congress should have the special privilege of being allowed to gain information unavailable to the general public and then freely trade and profit based on that information?


(And yeah, we know all about how anyone else who did that would be rewarded with a soft, cushy vacation in a Federal golf resort detainment center...)

Huh?  Argue against what I believe?  Where the hell do you get an idea like that?

[Conan71]

This is true. Nobody, or at least nobody credible, wants everyone to earn the same income or anything silly like that. There will always be a top and a bottom. What I and others want is a return to the days when there was more class mobility and, beyond that, to the days when there was a larger middle class. The fact of the matter is that the tax code has been rigged to advantage one form of income that accrues mainly to those at the top over the form that most all of us share. How about we treat them equally and see how that works out?

There's a few nature/nurture issues which will restrain class mobility on the environmental conditions or "nature" side.  Pure conjecture on my part, but three important things have happened in the last 20 years that have truly hurt the middle class: free trade agreements, a big box mentality amongst consumers, and no cohesive energy policy that the U.S. could have taken the lead on.

I don't think anyone could argue successfully that free trade agreements have helped create American manufacturing jobs.  IIRC, when NAFTA was passed the thinking was the only jobs which would go to Mexico were menial manufacturing jobs that we needed out of the way so that Americans could populate more skilled occupations.

Look at the explosion of big box stores over the last two decades: smaller local or regional chains have been replaced by huge big box retailers who control much of the consumer durable goods market.  Wal-Mart, Best Buy, Lowe's, Home Depot, Target, etc.  The prices on consumer goods remaining relatively unchanged over 20 years has given the middle class more buying power, but at what cost?  Our thirst for cheap goods necessarily forces jobs to manufacture those goods into much cheaper labor markets.  In many cases you can actually buy some items for less than you could 20 years ago.  If consumers were willing to pay more for the products they use, this trend would reverse. Only problem is, we've become a society that looks for a bargain first and quality seems to be a distant second.

While consumer goods prices have not trended upward significantly, energy prices have.  We've taken a lackadaisical approach to energy conservation as a nation and individually.  We've also allowed for trading practices which allow speculators to make tons of money off the backs of consumers at the pump.  Sustained high gas prices have brutalized the middle class and left consumers at the lower end with the tough choice of gas or groceries and has limited their discretionary spending.

The maddening part to me is to listen to politicians demonize corporations and their larger investors as greedy and evil when it's their own actions and lack thereof to protect American jobs in the first place that have made it necessary for so many companies to move operations off-shore to remain competitive.  

Again, all conjecture on my part, not anything scientific.

[Gaspar]

There's a few nature/nurture issues which will restrain class mobility on the environmental conditions or "nature" side.  Pure conjecture on my part, but three important things have happened in the last 20 years that have truly hurt the middle class: free trade agreements, a big box mentality amongst consumers, and no cohesive energy policy that the U.S. could have taken the lead on.

I don't think anyone could argue successfully that free trade agreements have helped create American manufacturing jobs.  IIRC, when NAFTA was passed the thinking was the only jobs which would go to Mexico were menial manufacturing jobs that we needed out of the way so that Americans could populate more skilled occupations.

Look at the explosion of big box stores over the last two decades: smaller local or regional chains have been replaced by huge big box retailers who control much of the consumer durable goods market.  Wal-Mart, Best Buy, Lowe's, Home Depot, Target, etc.  The prices on consumer goods remaining relatively unchanged over 20 years has given the middle class more buying power, but at what cost?  Our thirst for cheap goods necessarily forces jobs to manufacture those goods into much cheaper labor markets.  In many cases you can actually buy some items for less than you could 20 years ago.  If consumers were willing to pay more for the products they use, this trend would reverse. Only problem is, we've become a society that looks for a bargain first and quality seems to be a distant second.

While consumer goods prices have not trended upward significantly, energy prices have.  We've taken a lackadaisical approach to energy conservation as a nation and individually.  We've also allowed for trading practices which allow speculators to make tons of money off the backs of consumers at the pump.  Sustained high gas prices have brutalized the middle class and left consumers at the lower end with the tough choice of gas or groceries and has limited their discretionary spending.

The maddening part to me is to listen to politicians demonize corporations and their larger investors as greedy and evil when it's their own actions and lack thereof to protect American jobs in the first place that have made it necessary for so many companies to move operations off-shore to remain competitive.  

Again, all conjecture on my part, not anything scientific.

One note: You mention that consumer prices have not trended upwards, and that is true, however consumables have, significantly. I know you address this when you talk about energy, but I just wanted to clarify.

The items we purchase to live every day have skyrocketed.  Mostly due to energy costs, but also due to other factors that increase the cost of their production.  While a 30% increase in the cost of meat or milk doesn't affect me or you too much it does have a big impact on the poor.

In the president's speech last night, he said a number of encouraging things, but then again we are used to him "saying" encouraging things.  Embracing an "all of the above" energy policy is the most important thing he can possibly do, if he really cares for the poor and the middle class.  Typically the SOTU is an opportunity for a president to report on the health of the country and to expand on the budget presented to congress.

President Obama has always delayed his budget until after his address.  This is unfortunate, because the budget is where we find all of the sticks he has tied to his carrots.  I am hopeful that when he releases his budget on February 14th, it will include a comprehensive energy policy that will bring down the cost of living for the poor and middle class.  I also hope the incentives he is willing to grant to enterprise will not be bound with barbed wire.

[Hoss]

One note: You mention that consumer prices have not trended upwards, and that is true, however consumables have, significantly. I know you address this when you talk about energy, but I just wanted to clarify.

The items we purchase to live every day have skyrocketed.  Mostly due to energy costs, but also due to other factors that increase the cost of their production.  While a 30% increase in the cost of meat or milk doesn't affect me or you too much it does have a big impact on the poor.

In the president's speech last night, he said a number of encouraging things, but then again we are used to him "saying" encouraging things.  Embracing an "all of the above" energy policy is the most important thing he can possibly do, if he really cares for the poor and the middle class.  Typically the SOTU is an opportunity for a president to report on the health of the country and to expand on the budget presented to congress.

President Obama has always delayed his budget until after his address.  This is unfortunate, because the budget is where we find all of the sticks he has tied to his carrots.  I am hopeful that when he releases his budget on February 14th, it will include a comprehensive energy policy that will bring down the cost of living for the poor and middle class.  I also hope the incentives he is willing to grant to enterprise will not be bound with barbed wire.

And we also hope that anything promising and hopeful that makes its way through the chambers doesn't get filibustered to hell and back.

[Townsend]

And we also hope that anything promising and hopeful that makes its way through the chambers doesn't get filibustered to hell and back.

I was under the impression nothing positive could be allowed through a GOP controlled house until his two terms are up.

[Conan71]

And we also hope that anything promising and hopeful that makes its way through the chambers doesn't get filibustered to hell and back.

Let's hope he doesn't play games with Congress and the Senate by tying a massive tax increase on the wealthy that even members of his own party don't want to see right now.  He will though because come November, Democrats will continue the theme of do-nothing Republicans who are blocking any attempt at social and economic justice to protect their rich and greedy 1%'er contributors.

I think GOP members ought to take him up on a huge tax increase and listen for the sound of smile rolling down both of his legs and their Democrat counterparts in Congress when they call his political bluff.

[Gaspar]

Let's hope he doesn't play games with Congress and the Senate by tying a massive tax increase on the wealthy that even members of his own party don't want to see right now.  He will though because come November, Democrats will continue the theme of do-nothing Republicans who are blocking any attempt at social and economic justice to protect their rich and greedy 1%'er contributors.

I think GOP members ought to take him up on a huge tax increase and listen for the sound of smile rolling down both of his legs and their Democrat counterparts in Congress when they call his political bluff.

I'm sure that we will.  Springboarding off of the release of Romney's tax returns will provide an awesome and irresistible opportunity for him to both campaign and push legislation.  He will call for increases to capital gains taxes because he understands that the vast majority of Americans do not understand the multiple taxation levied on these funds.

Of course the legislation will not pass, because neither Republicans or Democrats will support it.  As we've proven again and again, capital gains taxes have a far more profound effect on government revenue than other tax structures because they are more closely related to corporate growth and therefore corporate tax revenue.  Decrease the income from investment and people seek other instruments for growth.

Between 1968 and 1972 rates increased by 10 percentage points and revenues fell 21%.
In 1978 the rate fell by 15 points from 35% to 20% and revenues increased by 46%.
In 1986 the rate was raised by 8 points to 28% and by 1991 15% less revenue was being raised.
In 1996 the rate was reduced by 8 points to 20% again and by 2000 revenues had grown by some 50%
In 2003 the rate was cut to 15% and revenues grew by 45% over the following three years.

The President knows the history, and how this mechanism works, he also understands that a proposal will never pass, so it offers an awesome opportunity to showcase a do-nothing congress, attack his opponent, and even herd the sheeple in the OWS crowd to his pasture.

I will seriously question his intelligence if he chooses not to do this.

[Townsend]

I will seriously question his intelligence if he chooses not to do this.

So you'd stay the course.

[Hoss]

So you'd stay the course.

Chortle.