Our Tax Crisis

Wealthy investors felt that the 14,000 level of the DOW was worrisome, even dangerous because it might be the result of the money the Federal Reserve has put into the financial system. They worried that it was not supported by corporate fundamentals. These heavy hitters feared that another financial crisis could lead to deflation, destroying stability and stock values of dividend paying investments. In the last quarter of 2012, growth contracted in the developed world. The 34 member countries gave the world a sign of how the global economy had weakened. Growth vanished in the developed economies. This recent weakness has not generated counter cyclical support from governments and many of the countries where the economy weakened. What they did came late in the crisis. The United States economy did better because fixed private capital investment was still rising. Government investment was down but the US gain is caused entirely by the private sector. Historically, it was very unusual for government Investment in the United States to decline. Austerity has become the byword in many countries, with the heaviest burden falling on the working class and those living at or below the poverty level. Despite the significant contraction of government spending, a protracted fight over the cuts in government spending is likely to last for a long period. If one side wins the first proposal, counter proposals will keep the issue alive for a political generation but only to decide how much and where to cut government programs The social needs of the underprivileged classes will receive far less attention from the drive for the broadest budget cuts. For lack of money, most of the proposals in the President's State of the Union Address are likely to be unfulfilled along with the social economic and moral needs of the nation.

The Windfall of Immigration Reform

The Democrats have demographic dreams. Liberals are counting on population and voting trends to doom Republicans to minority status that will last for a long time. This expectation is at the heart of the debates in Congress about immigration. Democrats believe that they will be on the winning side in future elections. The first election of Barack Obama set the trend. His landslide reelection confirms the change in voting patterns. The white Americans who tend to vote Republican are shrinking as a percentage of the population while those who lean Democratic are growing rapidly, especially younger voters, Black, Hispanic, and Asian. By 2050, US population is expected to increase by 117 million and the vast majority will be immigrants or the children of immigrants especially Latinos, Asian Americans, and African-Americans who will rise to nearly a third of all Americans. Hispanic immigration in the Southwest and the historic black population will be the biggest factors meeting the needs of the US economy. Expanded education and economic opportunity will help the Latinos move into the mainstream of American life. Their mutual bonds will lead them to bond with the political party that identifies with their concerns. However, right now, the GOP Tea Party seems less likely to consider comprehensive immigration reform and to promote affirmative action. For the GOP to have a serious chance to win over the Latino population and other voting blocs, it will require serious changes in their political, economic and immigration policies. It may be very difficult to obtain support from Middle Western whites for new policies. Restrictive policies passed by the Republicans and states like Arizona and Alabama are the most obvious negative examples. But a move away from draconian immigration policies and belligerence could make Latinos a contested demographic bloc and give the GOP an outside chance to shatter the Democratic dominance. It might even lead to a one party state dominated by a bureaucracy with sufficient political skills to satisfy the status quo while leaving room for the growth and development of all groups. Open immigration policies could be the first step followed by other economic windfalls: simplification of the current visa system, greater investment in employee training by business, temporary work visas should be minimized in favor of permanent status, scientists and engineers and innovators would be favored as the main drivers of productivity.

John Kerry's First Campaign

On October 15, 1969, popular protests against the Vietnam War peaked when 10 million people in thousands of communities in all fifty states, students, non-students, the middle-aged and the middle class, from every profession attended protest meetings and rallies. Republican and Democratic politicians maneuvered to address the public meetings. In working-class communities as well as the affluent suburbs, speakers read the names of local men killed in Vietnam. The Moratorium set the stage for serious political action to challenge the Vietnam hawks in office who insisted on supporting the war without a purpose, costing an enormous toll of lives and pain. In the 4th Massachusetts, this took the form of challenging the hawk incumbent US Rep. Philip Philbin. The word went out and many antiwar supporters appeared from the entire citizenry as though by magic. I was committed to the dean of the Boston College Law School, Rev. Robert F. Drinan, as the best-known and most prestigious candidate willing to sacrifice his career to end the bloodbath. One morning, I was working at my job, President and CEO of Massachusetts Envelope Company in Somerville when the company receptionist came to my office with a problem. A young man who presented himself as a student at Harvard College insisted on seeing me immediately, calling the demand a matter of life and death. Without an appointment, the student was told the interview was not possible that day at that time. The student refused to leave citing the importance of his mission. Bending the rules, the student was ushered into my office. His name was Cameron Kerry, he was a Harvard student and his mission was to obtain for his older brother, just returned from combat in Vietnam, the right to be included in the political Caucus being planned to select the candidate to defeat Philip Philbin. His brother, Cameron said, can speak with the greatest credibility on Vietnam as a decorated veteran of the war, a young man returning after years of fighting service. Impressed by the brotherly admiration and devotion, I nevertheless had to resist because I was committed to father Drinan, who went on to win the Caucus and the congressional seat and to distinguish himself as totally committed to liberty, peace and the pursuit of happiness, a virtual saint in his courageous pursuit of peace and social Justice. However, John Kerry had stunned the 2000 political activists who attended the Caucus with his commitment to the same issues as Drinan. He could not be ignored. I took the microphone and acknowledged Kerry’s words and his absolute commitment to support the winner of the Caucus and opposition to the Vietnam War. “John Kerry”, I said, “We will never forget your sacrifice in the name of group unity. You have a great political future and I will be a part of it, supporting your various candidacies as you rise to the leadership of our nation.” And I have fulfilled my pledge as John Kerry has lived up to the promises and expectations of his brother Cameron. Now, when he speaks about his eagerness to end the Vietnam War, he suggests he may have been too aggressive, didn't think clearly, it was not thought out, but it was how he felt. John: no apologies, please. You and your fellow protesters saved thousands of American and Vietnamese lives, setting a humanitarian standard, never to be forgotten.

Inequality is the Real Financial Crisis

The reelection of President Obama is subject to many interpretations. Each side debated issues that affect a long malaise into which the economy seems to be settling, and the growing divide between the 1% and the rest is an inequality not only of outcomes but also of opportunity, as pointed out by Nobel Laureates Paul Krugman and Joseph Stiglitz. These problems have driven inequality to its highest level since before the Depression and will be difficult to overcome - and the American dream - a good life in exchange for hard work-is slowly dying. Politicians typically talk about rising inequality in the sluggish recovery as separate phenomena but in fact they are intertwined. Inequality stifles, restrains, and holds back our growth. This serious threat to America after four decades of widening inequality is squelching our recovery The reasons: the middle class is too weak to support our economic growth. The top 1% of income earners took home 93% of the growth in incomes in 2010, skyrocketing inequality. Those who are born to parents of limited means are likely to never live up to their potential. More than a fifth of our children live in poverty. Adjusted for inflation, real wages have stagnated or fallen. When young people are jobless their skills atrophy. The student debt for 2010 exceeds $1 trillion. Many of these problems originated in the Bush Administrations. Obama bailed out the banks but didn’t invest enough in workers and students. It is not too late to correct policies

The Struggle against Poverty & Inequality

The popular movements in the 1960’s, women’s reproductive rights, civil rights, sexual rights and so forth left us unprepared for the slowdown in growth and the rise in inequality in the current decade. Today, with union membership reduced to 7% of the private sector most working people have no organized voice at all. Meanwhile, the power of wealth has been fully unleashed by the Supreme Court. The rich protect their freedom with wealth and the people protect theirs with laws. Among most minority groups support for the Democratic candidate is the norm. Whites are the most reliable Republicans democratically in the country. We have two basic poverty problems in the United States. One is the prevalence of low wage work. The other concerns those who have almost no work. The two overlap, with 103 million people who will go into and out of poverty. 20.5 million is the number of Americans with an income less than half the poverty line, a big hole in our safety net. So many desperate people lug their lives and possessions around the streets as virtual outlaws. It is so difficult to upgrade skills and opportunity that fully half the jobs in the United States pay the worker less than $33,000 per year. When nearly everyone in the country is poor, the distinction between have and have not becomes meaningless. Some families become masters at rotating their bill payments. Some estimate 69.1 million as the number of poor Americans at the official poverty line. In too many areas, work disappears and dreams die. It is going to take new solutions motivated by a common wit and universal sympathy.

The Drones: Cowboy Behavior

Iran’s defense minister confirmed that Iran fired on a US drone unmanned aircraft that had entered Iranian airspace. US says it was a routine surveillance mission using international airspace over the Persian Gulf. It was the first time Iranian aircraft fired at an American drone that the US says was protecting American interests. US warned that drone flights will continue. Understanding American drone strikes is difficult, because they are based on uncertain information from dubious sources. How many people have been killed by these unmanned aircraft by the CIA strikes in Yemen and Pakistan? How many are really civilians? How many are children? The Obama administration and the CIA have been secretive about the fast-growing drone program. There are few challenges to the US administration’s description of those killed as “militants”. Are they really terrorist sympathizers? How can they tell from unmanned or even manned planes? Are they victims of American militarism, using weapons indiscriminately without fear of retaliation? There has never been a serious public debate in Congress on the program. Carrying out strikes in secrecy without accountability is dangerous. About once a month, the CIA sends a fax to a general in Pakistan and Afghanistan intelligence, indicating where the US intends to conduct drone strikes. The Pakistanis, who in public oppose the program, don’t respond. The US concludes it has tacit consent to strike with drones. Obama administration officials believe they are on firm legal ground in their drone program, that Pakistan failure to object amounts to a “YES”. Others call the drone program “cowboy behavior”, and unease is widespread except in the US. What if all countries did what the US is doing?

The US and Israel get closer on Iran Policy

Ever since Barack Obama became President of the United States, American relations with Israel and Benjamin Netanyahu have deteriorated over relations with Iran. Netanyahu insists on harsh threatening measures capped by a “red line that must be drawn limiting Iran's ability to enrich uranium thereby limiting Iran from further development of a nuclear weapon.” Pres. Obama and his administration accept the objective of denying Iran a nuclear weapon. They have led the international movement to install economic and diplomatic sanctions to pressure Iran to end its nuclear program. These sanctions have been effective in harming the Iran economy but have not yet persuaded the government in Tehran to suspend its nuclear program. Israel's policy appears to threaten Iran with preemptive military attack. To the contrary, Obama’s policy relies on diplomacy and commercial pressures while maintaining that “all weapons are on the table.” Relevant talks between Obama and Netanyahu have not gone well. Although US policy is strongly supportive of Israel militarily, financially, diplomatically, and commercially, Netanyahu has attempted to change US policy by his lobbying of the US Congress, the Jewish community in the US, and this close relationship with Mitt Romney, the Republican nominee for president. These tensions are about to change. Obama's diplomatic approach to the Iran crisis is working. The sanctions and policies Obama promotes have devastated the Iranian economy. The value of Iranian currency has plunged, economic woes have led to public anger, street clashes, black-market money changers, marching citizens demanding relief as well as many arrests of demonstrators. The turmoil in Iran has affected Israel’s positions. Netanyahu appears to be shifting hisIran policy toward more sanctions and fewer demands for the threatening “red line.” Most importantly, Obama's emphasis on diplomacy as the best way to modify Iran’s policy appears to be correct. Moreover, Netanyahu now faces political and electoral competition in Israeli’s next election. Obama’s successful policy will discourage Netanyahu from helping directly and indirectly the presidential campaign of his longtime friend, Mitt Romney. In recent speeches, the Israeli leader suggests that any military strike on Iran has been deferred indefinitely and that relations between Obama and Netanyahu are likely to improve.

Obama Will Win in a Landslide

President Barack Obama leads Republican challenger Mitt Romney by significant margins in virtually every political category. Worse for Romney, his campaign lacks the plan and focus to reverse his difficulties. In contrast, Obama’s campaign has made few mistakes while riding the benefits of incumbency. In a lead editorial, the New York Times, September 25, “Why Romney is slipping: By refusing to supply voters with intelligent answers, his campaign is driving them away. “ The prestigious London Economist, reports On September 22, that Romney told a group of rich donors that if his father had really been born Mexican rather than born in Mexico to Mormon exiles in Mexico, he would've had the election sewn up. Romney was quite wrong when he claimed that those not paying US income taxes are receiving “entitlements”, writing off half the electorate as parasitic loaders. Romney joined the radical Muslims in criticizing Obama for the controversial video that sparked riots, death, casualties against US personnel throughout the Middle East, failing to support the US against false accusations. Obama's poll numbers are leading Romney by significant margins nationally as well as in the key big states that elect the most delegates. Only North Carolina keeps Romney competitive. Although the Supreme Court approved legislation allowing virtually unlimited political donations, most of which went to Republicans, this advantage is not helping them as expected. Word-of-mouth and the media and political organization remain decisive factors. His cash is low, Romney is striving to find new large donors. In the New York Times, September 23, 2012, Maureen Dowd: “As a candidate, Mitt Romney is awkward, off- putting and hollow, so bad that if he were at Bain and Company, he would shut himself down.” Among the many fallacies in Mitt Romney's now infamous “47%” speech is that people who pay no income tax will vote for the president no matter what. More than 1/5 of non-filers are elderly, a constituency likely to favor Romney. Most importantly, the housing market continues to gather strength and the stock market is going up as the Federal Reserve pumps $50 billion a month into the economy.

The Real Reagan Lesson for Romney/Ryan

President Ronald Reagan has become the patron saint of political Republicans, an inspiration and a model for their few glory days since Abraham Lincoln. He has a lesson for the Romney/ Ryan ticket, a lesson that contradicts the low budget and reduced public services advocated by the Republicans. Facing a severe decline in business activity and employment, Reagan horrified his advisors by raising government spending massively, more than his Democratic predecessor did. He stimulated the US economy and led the West in the Cold War. George Gilder, a key Reagan advisor and a Founding Fellow of the Discovery Institute, reminds us that the Reagan tax rate cuts and other pro- enterprise policies added some $17 trillion(yes, trillions) to America's private sector assets, dwarfing all prior deficits in creating 45 million net new jobs at rising wages and salaries. Ultimately the Reagan boom would raise private sector assets by another $60 trillion over 20 years. The Romney/ Ryan ticket is missing a rare opportunity to follow the Reagan spending initiatives to reverse the current crippling trends. Saving Social Security and Medicare is an opportunity for keeping seniors and workers healthy and happy, and in the work force rather than driving them out. However, Romney and Ryan are going in the opposite direction, cutting the federal budget in order to cut taxes and government expenditures. If Romney and Ryan win election and choose to pursue this path in response to pressures from crony capitalists and ideological conservatives, they will not galvanize another Reagan American Century and industrial boom. Strange as it may seem, the real Reagan lesson will be implemented by the Liberal Democratic Obama regime. They know how to implement the Reagan spending policies that followed the Franklin Roosevelt policies to spend large public money to create jobs for most Americans, improving the American infrastructure, often by increasing taxes paid by the wealth of savers, favored governments and crony capitalists. Departing from the Reagan policy is likely to extend the bad times costing Romney/ Ryan the election. The Democrats have a rare opportunity to spend and spend, elect and elect, in the spirit of Ronald Reagan.

Our wars are not a factor at the political conventions

Some voters and foreign-policy experts tried to make the 2012 presidential campaign a referendum on foreign policy. They are failing: they can't get the candidates to focus on Afghanistan, Iran, or the Pentagon budget despite the enormous cost in lives, money and resources. We have accepted a national amnesia about these very controversial wars. The focus on domestic issues has diverted the country and silenced most national security discussions. At the campaign conventions wars are not even worth a mention, especially from the Republicans who ought to critique the Democrats in charge. Both parties seem to suggest that the troops should have been withdrawn years ago but that position seems inconsistent with Obama and Romney strategies. Why not pull out these veterans or justify their presence and danger in these long and inconclusive struggles? Is it worth noting that none of the men on the two tickets has served in this military, breaking an eighty (80) year precedent. And we don't have a military draft that would strentghen the political power of the average soldier. Our willingness to fight wars on many continents carries with it the responsibility to fight only when absolutely necessary and to end the hostilities with the fewest casualties at the earliest time. Four years ago, the Republicans had an almost exclusive hold on the wars and veterans issues. Now, the continuing wars are not even worth a mention or serious discussion as fighting continues. Don’t we care anymore?