Shadowboxing

For those of you who have never read Bob Woodward’s "The Agenda" and David Stockman’s "The Triumph of Politics", they make for an interesting compare & contrast. The first is an account of the Clinton administration, the second is an account of the Reagan administration (written by the same twerp who engineered that whole Reagan-Revolution-that-wasn’t). The second is particularly fascinating because David Stockman was a well-intentioned, totally unqualified, silly little boy who made a couple of spectacularly numpty-headed assumptions when he designed the policy. He then found himself at the center of a crew of politicians who just didn’t know jack shit about economics, budgets, or even basic bookkeeping, and didn’t really want to know. He realized his errors too late and couldn’t explain to the White House what the problem was because they were all big-picture ideologues who disliked facts. But I digress.

What’s fascinating about those two books is that they both essentially tell the same tale, only from vastly differing perspectives. One of the presidents involved was at the vanguard of the NeoConservative movement, and the other was really just a New Dixiecrat. If nothing else, these two books make it painfully clear that nothing in Washington is new, let alone improved. But what is curious about these two radically different administrations is that they both faced the same insurmountable difficulties in designing an economic plan on which to base an actual budget. And neither of them had run the numbers in any meaningful way while on the campaign trail. Their campaigns were based on nothing more substantial than a hunch that the voters would like the sound of their "new" ideas. As a result, both administrations had all the direction of a fart when it came to implementing any of their policies.

The promises they made were simply ludicrous and could not be fulfilled. The plans that seemed so simple were trashed by the facts. Neither president knew the first damn thing about economics although both of them had presided over their own states. Reagan was not interested in learning. Clinton learned quickly. And neither of those facts made much difference. They still couldn’t resolve the inherent conflict between their dreams and the hard, cold facts. So they ended up compromising and lying their heads off until there was little, if anything, left of their original plans.

Here’s the crux of the conflict: The Republicans continually claim that they want to go back to being a capitalist economy. But a true capitalist economy does not tolerate political fixes for economic problems. When an industry is no longer profitable, it fails and is replaced by a new industry that pushes technology forward and creates new jobs and a higher standard of living for the workers who used to be employed by the failed industry. The government does not require the workers to pay higher taxes to support the dying business that can no longer support those workers. In a capitalist economy, Ford and GM would have gone bankrupt decades ago and the workers would have moved on to jobs in a profitable industry. We are not a capitalist economy. We provide plenty of taxpayer-funded subsidies (read: corporate welfare) for virtually every industry in America today. Farmers. Transportation industries from airlines to railroads to shipping and trucking. Real estate developers. Hospitals and drug manufacturers. Insurance companies. You name it. If people are employed there, the company is sucking the government tit. You are paying them substantial amounts of money for the privilege of working there yourself or allowing someone else to work there. And these subsidies will not be removed. Once you give something away for free, even money, it instantly becomes an entitlement in the mind of the recipient. Now it’s one thing when you give little Johnny a lollipop and tell him that tomorrow you’re going to give him another one too. If you renege on your promise, there really isn’t much little Johnny can do but cry and be disappointed. He can’t really hurt you back. Exxon Mobil is quite another story.

The Democrats believe that it’s far too late to return to that old capitalist model, and it won’t work anyway. Capitalism promotes greed and social injustice and relies on a model that encourages predatory behavior, which is antithetical to a monotheistic culture. In Western civilization, every individual life is a unique expression of divinity and carries within it a value that is simply incalculable. The basis of every branch of monotheism is some form of the Golden Rule. You can’t just kick ’em to the curb when they’ve outlived their usefulness. You can’t just enslave an entire population for your own selfish gain. It’s immoral and repulsive. So the Democrats firmly believe in the redistribution of wealth by coercion. They assume ownership of every penny earned by every worker in the country from the outset, and then they adjust the tax code annually to reflect how many of those pennies you will be allowed to keep. But make no mistake about who they assume actually owns your earnings. They take their cut off the top. You will be permitted to keep however many pennies they determine they do not need to redistribute in the form of various social programs.

Government subsidies to businesses are social programs. And damned big ones, too. Democrats and Republicans alike will guard those subsidies like a mama bear guards her cubs and they will cost you a lot more money than just about any program out there other than Social Security and Medicare. They will never be cut in any meaningful way because those special interest groups are organized and they have political access and the money (thank you very much) to provide them with a level of media access that no one else has. You can kill a school lunch program or take away vaccinations for poor people in Appalachia and you’ll be criticized for throwing widows and orphans out into the snow on Christmas Eve. That news story will last until something juicier comes along, like a Britney meltdown. But if you threaten Boeing’s subsidies, you will disappear like Jimmy Hoffa. You’ll become a spook story they tell to politician’s children around the campfire. It doesn’t matter whether you are Democrat or a Republican. You are done. Government welfare programs for businesses aren’t going anywhere, and if you won’t get rid of them you can’t very well throw the widows and orphans out into the street. Well, not in broad daylight anyway. People will think you are mean. So the consequence is a neat little compromise where the government giveaway programs ALL stay intact with annual growth calculated into the tax structure, you foot the bill for it, and Exxon Mobil goes on being a bunch of predatory capitalists in a socialist state.

So basically we have a system where both of the political parties are essentially the same; Republican and Republican Lite. Or Democrat and Democrat with extra jalapenos. They feed you and burn you at the same time. Okay, John McCain will just set your ass on fire with Bic lighter and be done with it. He has a dead peasant policy on you and WWIII to finance. But you get the idea.

What my generation has failed to grasp is that is that all the noise we hear from politicians is just that – noise. There is no real difference between the Republicans and Democrats. There are minor differences; the Democrats are much more likely to scream loudly about those benefits that are principally intended to assist the poor, the elderly, and the working class. But the benefits that go to the wealthy and corporate concerns are the benefits that are jealously guarded and protected by both parties. And they are often disguised to look like benefits for the poor. Here’s a case in point:

The Job Corps is a program ostensibly designed to benefit underprivileged youth by providing job training that will enable them to become self-sufficient employees (and there’s an oxymoron for you). In 1981 Orrin Hatch, the Republican Senator from Utah, fought like a wildcat to protect the Job Corps from budget cuts. He looked like a real champion of the poor. But was he? The fact is that the Job Corps’ largest facility is located in Utah and employed thousands of bureaucrats at salaries of $25K and up. In 1980 they received a federal payment of $12K for each trainee’s annual training. They could have sent each one of those trainees to Harvard for less money than it cost to send them to Utah. No, I’m not kidding. An Ivy League education cost less than $12K a year back then. Those trainees would have emerged from universities with something more valuable than construction skills. For $12K a year they could have gotten a real education and a degree that would have permitted them to enter the labor force in a really competitive way. They could have become business owners themselves. But no. Instead they got the Job Corps and construction skills, the bureaucrats got comfy salaries for pushing papers around and groping their secretaries, and Orrin Hatch got a nice bonus for his state – a huge employer with a nice shiny halo. Tell me again who got the sweet deal?

Here’s another one for you: did you know that Walmart collects state sales taxes, but they do not forward that money to the state’s coffers? They get to keep that money as part of their profit structure. They claim that they benefit the state by employing so many people and keeping their prices low, so the trade-off is that they keep the sales taxes. Otherwise, they’ll have to punish everyone by laying people off, reducing benefits, and raising retail prices. It’s just so much sweeter to take a juicy little cut off the back end where nobody knows about it, than to call the cost what it is right up front. Socialist subsidized capitalism. Ya gotta love it.

My hope is that the internet and 24 hour news programming will somehow evolve to provide the next generation with the resources to understand how the dollar really bounces. The presidential nominees and the PTB in Congress are not going to tell you. But here are a couple of short facts:

You cannot lower taxes and increase spending without creating a massive deficit that will devalue your dollars, creating horrendous inflation and higher interest rates.

If the federal government withdraws funding for a program, that doesn’t mean a program will die. The state will simply have to raise local taxes to pay for the program. There are no savings involved. The governor is just much happier when it’s buried in 400,000 pages of federal tax code and budget analysis where it’s harder to see and he’s more likely to emerge with clean hands and a lot of votes.

If you deny people healthcare, they will turn up in the emergency room at some point and you and they will both pay for their crisis treatment at astronomical costs. You will pay in the form of higher taxes, higher insurance premiums, higher interest rates, and higher food costs when they levy another gas tax to cover the subsidies to the hospitals. It spreads out laterally and you can’t follow the money because the truth is buried under two tons of paperwork. But you will pay. You are NOT going to let those people die in the gutter because they can’t pay for their insulin no matter how much the right-wingers tell you that you should. When that moment becomes a reality, you WILL reach out to help those people because that’s what human beings do. Wouldn’t it be smarter to pay a fixed price right up front to make sure that everybody gets their insulin BEFORE they get sick from not having it?

So. Ya want that Democrat with or without jalapenos?