Today we witnessed one of our country's most magnificent events, a Presidential Inauguration, celebrating our ability to be governed by officials who are elected only for specified terms. It also ennobles all of us by causing us to recognize that, despite very important differences, we all respect the process even when it produces results we don't prefer.
As readers of this blog have gathered, I am among those tens of millions of American voters who would have preferred a different result this time around. And I am still annoyed by the commonly expressed narrative that President Obama achieved a "great victory". In fact, it was one of the narrowest popular vote victories in history (about 1%), especially for a re-elected incumbent, with very small margins in states that gave him his electoral vote win, which, itself, was smaller than the first time around. In any event, he won and let us all hope that he and his administration can work with the co-equal Legislative Branch (let's not forget the basics of how our government is intended to work) to achieve good results for our country over the next four years. A lot of our future, for better or for worse, will depend on what we're able to accomplish in this short time.
Like many, I was surprised, but pleased, by the specificity of the President's inaugural address. Rather than mere thematic platitudes about America's exceptional natural and human endowment and its unique set of core values leading us to continued greatness as a nation, we heard a long list of intentions for particular results. I was personally very pleased to hear the calls to better deal with gun violence, a much more welcoming policy for immigration, gay rights, tax reform, and better managing the costs of entitlements. It would be hard to disagree with the broad goals; the problems will lie in the details of how those goals are to be achieved. And I would have preferred him to say more about cooperative engagement with those who don't share all his views and less continuing to divide the nation on economic terms. There was a lot of "code" in his speach to reassure his electoral base that they could count on him to further their agendae; there was little to suggest that he genuinely respected the views of those not in that base. And most fundamentally, there was little to suggest that he is prepared to truly grapple with the most fundamental of all the problems we face...the completely unsustainable mismatch of government expenditures and revenue. That problem must be set on a credible course of correction or all of the other goals will be impossible to achieve.
Still, today, I am prepared to be hopeful, both because that's in the spirit of celebration of our success as a democratic republic and because our newly inaugurated President should be looking to how history will judge him over all future time. If he is as wise as he is smart, he will not want to waste this fabulous opportunity to do some very good things...that the country is actually able to pay for indefinitely. Still, I'm glad that the next election is only about 21 months away, just in case.
Monday, January 21, 2013
Friday, November 23, 2012
Another Country
With apologies to James Baldwin for using his 1962 title to caption this post, I'll share a few comments on a trip that Penelope and I made to the United Kingdom in October. I emphasize both words, united and kingdom, since both contain some irony. It's also an opportunity to recall some often-confused geo-political basics. England is a country, occupying part of an island, Great Britain, which in turn is only a part of the political entity, the United Kingdom, which takes the northeastern chunk of another island to complete.
After just one quick day in London upon arrival (beautiful room, with a great view, in gorgeous fall weather, at the Sheraton Towers in Knightsbridge...dangerously close to Harrods), we traveled by car to Wales for a meeting of the Financial Planning Standards Board. Just past Bristol, the road signs changed to include a Celtic language, in addition to English. The driver explained that we were now in "another country", Wales...and quickly added that the Welsh and the English don't necessarily get along too well. English weekend homeowners sometimes find their Welsh properties put to the torch. Hmmm.
I also remninded myself that Charles is the "Prince" of this place and that Will and Harry have "Wales", not Windsor, as their surname. If Charles ever gets to the throne, one presumes that Will will take over the Princedom. "Poor" Harry stays a mere Duke.
The country is green and wet and blustery in October; the sky changed dramatically from dark overcast to brilliant sun several times a day. Because FPSB kept me busy during the days at The Celtic Manor (home to the Ryder Cup a few years earlier), there was little opportunity to explore; but Penelope took the train from Newport to Cardiff one day and had fun shopping and negotiating lunch to avoid cream, butter, and cheese.
We were treated to a large Welsh Choir's performance (excellent!) one evening and a trip to a nearby castle for dinner theatre on another night. Getting there was quite an adventure. The driver of our bus (one of two) made a woefully wrong turn and, with much skepticism from those at the front of the bus, took us a long way down a very narrow, unpaved (so quite muddy), one lane road till we reached a firm barrier. On either side were deep ditches and wheel swallowing mud, so we had no choice but to back up...at least a mile and an half, in total darkness...it was interesting to observe the range of responses, from great humor to near panic from the 40 or so international attendees, all of whom are accustomed to being "in control" in their own spheres. I think the driver nearly had a heart attack and many of us were much more concerned about him. Eventually, now very late, we found the castle and joined with our colleagues from the other bus who were refused (unexplainedly) anything to drink until the whole group had arrived.
After Wales, we flew to Edinburgh for several days of history (there is much: start with Edinburgh castle itself), art, great food, sighseeing, in town as well as in the wild and beautiful Highlands, and getting into the spirit of yet another country. So, of course I bought a kilt, learning that not many people really take specific tartans into account anymore, so my having not a drop of Scottish blood was no obstacle. A taxi driver later explained to me that the outfit wouldn't be complete without a "dirk", the small blade true Scotsmen always carry in their stocking and that always gets him in trouble with our TSA.
We visited the Parliament of Scotland (it proudly has a separate one; and something like 40% of the population say they favor separation, "devolution", from the British crown) and so much of the history of this place is framed in terms of it's soveriegnty struggles and actual battles, some won, some lost, with the English. A Scottish joke asks why God was so generous with Scotland: great beauty, fertile land, clever, handsome people; it seems unfair. The response, "but look who he gave them as neighbors!"
Hail Britannia
Still, Edinburgh won the competition to be the permanent home of the recently decommissioned royal yacht, Brittania. Touring it, complete with the Queen's and Prince Phillip's private quarters and the decidedly more modest quarters for the non-officer crew, brought to life the very strange (to Americans) situation of a hereditary monarchy living an almost other-worldly existence, now deep into the 21st century. It's not just that the family is extraordinarily rich, and enjoys a healthy budget provided by taxpayers as well, it's that they are treated almost as if a superior species.
After just one quick day in London upon arrival (beautiful room, with a great view, in gorgeous fall weather, at the Sheraton Towers in Knightsbridge...dangerously close to Harrods), we traveled by car to Wales for a meeting of the Financial Planning Standards Board. Just past Bristol, the road signs changed to include a Celtic language, in addition to English. The driver explained that we were now in "another country", Wales...and quickly added that the Welsh and the English don't necessarily get along too well. English weekend homeowners sometimes find their Welsh properties put to the torch. Hmmm.
I also remninded myself that Charles is the "Prince" of this place and that Will and Harry have "Wales", not Windsor, as their surname. If Charles ever gets to the throne, one presumes that Will will take over the Princedom. "Poor" Harry stays a mere Duke.
The country is green and wet and blustery in October; the sky changed dramatically from dark overcast to brilliant sun several times a day. Because FPSB kept me busy during the days at The Celtic Manor (home to the Ryder Cup a few years earlier), there was little opportunity to explore; but Penelope took the train from Newport to Cardiff one day and had fun shopping and negotiating lunch to avoid cream, butter, and cheese.
We were treated to a large Welsh Choir's performance (excellent!) one evening and a trip to a nearby castle for dinner theatre on another night. Getting there was quite an adventure. The driver of our bus (one of two) made a woefully wrong turn and, with much skepticism from those at the front of the bus, took us a long way down a very narrow, unpaved (so quite muddy), one lane road till we reached a firm barrier. On either side were deep ditches and wheel swallowing mud, so we had no choice but to back up...at least a mile and an half, in total darkness...it was interesting to observe the range of responses, from great humor to near panic from the 40 or so international attendees, all of whom are accustomed to being "in control" in their own spheres. I think the driver nearly had a heart attack and many of us were much more concerned about him. Eventually, now very late, we found the castle and joined with our colleagues from the other bus who were refused (unexplainedly) anything to drink until the whole group had arrived.
After Wales, we flew to Edinburgh for several days of history (there is much: start with Edinburgh castle itself), art, great food, sighseeing, in town as well as in the wild and beautiful Highlands, and getting into the spirit of yet another country. So, of course I bought a kilt, learning that not many people really take specific tartans into account anymore, so my having not a drop of Scottish blood was no obstacle. A taxi driver later explained to me that the outfit wouldn't be complete without a "dirk", the small blade true Scotsmen always carry in their stocking and that always gets him in trouble with our TSA.
We visited the Parliament of Scotland (it proudly has a separate one; and something like 40% of the population say they favor separation, "devolution", from the British crown) and so much of the history of this place is framed in terms of it's soveriegnty struggles and actual battles, some won, some lost, with the English. A Scottish joke asks why God was so generous with Scotland: great beauty, fertile land, clever, handsome people; it seems unfair. The response, "but look who he gave them as neighbors!"
Hail Britannia
Still, Edinburgh won the competition to be the permanent home of the recently decommissioned royal yacht, Brittania. Touring it, complete with the Queen's and Prince Phillip's private quarters and the decidedly more modest quarters for the non-officer crew, brought to life the very strange (to Americans) situation of a hereditary monarchy living an almost other-worldly existence, now deep into the 21st century. It's not just that the family is extraordinarily rich, and enjoys a healthy budget provided by taxpayers as well, it's that they are treated almost as if a superior species.
Saturday, November 10, 2012
Elections Have Consequences...Not Necessarily Obvious Ones.
It's now a few days after the election of 2012 and I'm still searching for something to be optimistic about in the results. As I suggested in recent posts, this was to be an opportunity for a choice about the nation we want to be, the emphasis we want to pursue. Sadly, my view is that the choice we've actually made is probably the wrong one on the economic and fiscal policy fronts. And, my home state of California has gone even further in a continuing wrong direction than at the federal level.
Mitt Romney is indeed a very good man, smart, compassionate, and very generous, worthy of respect and admiration. I disagree with several aspects of his announced social agenda, but I would be much more optimistic about good economic results in the coming years with him in the White House. I am convinced that we've got to get the economics right before we can effectively tackle whatever social agenda is appropriate for any government to pursue...and, for me, that's not really very much. I would feel much more comfortable having government, with its potential for the tyranny of the majority and its susceptibility to influence by very committed, though small, interest groups, exert its huge power in favor of no social agenda at all. So, I could tolerate a few cringe-worthy social policy perspectives, from either left or right, in order to get the really higher priority economic issues on a better path.
We did come very close to what I think would have been, overall, a better result. If the election were a few days earlier, before Hurricane Sandy took Romney off the front page and put the President in the role of Rescuer in Chief... or a few days later, after the further doubts about Benghazi emerged in the main stream press, and Petraeus resigned in shame, and the increasing Katrina-ization of Sandy's aftermath, Romney could have squeaked thru. As it is, Obama's "victory" was less emphatic (a narrower popular vote margin and fewer electoral votes) than his initial election 4 years ago; and it was pretty thin in any event. 50 million plus people voted for the other guy...and some of Obama's crucial electoral college wins were in fact very close.
Still, as everyone now observes, the Romney/Republican campaign failed to adequately capture the confidence of key...and growing...segments of the electorate, especially the young, women, and Hispanics and other immigrants. If they fail to better welcome and respond to these groups, shame on them. They won't deserve future electoral victory and they probably won't get it, despite the very high relevance to these groups of the key Republican themes of smaller, less intrusive government, self-reliance, and upward economic mobility thru one's own effort. It now seems clearer that they won't get enough people to adhere to this set of values unless they also share more common ground on important social issues as well. If Democrats, in turn, can also move from their current stance closer to the center on issues of long range fiscal discipline, we could all celebrate a very happy new day in American politics and be much more optimistic about the life of our nation going forward.
A Time for Compromise
Everyone says that they hope for it, and the "fiscal cliff" at year-end provides a deadline to get serious about it, but the actual political and structural fundamentals for compromise don't look especially promising. Yesterday, three days after the election, Obama, still in hot campaigning mode, had selected citizens standing on risers behind him...in the East Room of the White House (!)...as he claimed a popular mandate and brandished his pen in a challenge to Republicans to send him legislation to sign that met his requirements of increasing taxes on wealthier Americans. Meanwhile, the Republicans claim a mandate of their own, retaining control of the House and still having filibuster capability in the Senate. Whatever mandate that is, however, is also pretty skinny; they now will hold fewer seats in both houses than before.
So, maybe those chastened positions, on both sides, provide an environment for progress; and maybe the first element of a recipe for collaborative success relies on a careful parsing of the respective rhetoric on taxes. For a long time now, there's been a deliberate obfuscation (particularly, I think, by Democrats) of the crucial difference between rates of tax, on the margin, and absolute volumes of tax collected. Republicans insist on no increase in rates (and argue strongly for even reducing them); Democrats insist on making the "millionaires and billionaires" pay more. Instead of comparing warren Buffet's, or Mitt Romney's, tax rate with the rate their secretaries pay, let's have both sides acknowledge that you can increase the amount of tax anyone pays, without increasing the marginal rate...or even when lowering it... if allowances or deductions are reduced or eliminated and if additional categories of income are subjected to tax.
With the right leadership, the American people are smart enough to grasp this structural choice and the arithmetic involved and to at least then intelligently debate the merits of marginal rate increases or decreases as incentives or disincentives toward economic growth. The data, such as exists, is regrettably not conclusive on this. For now, it's more a matter of faith and logic on the side in favor of low marginal rates and a sense of distributive fairness on the other. But, if the wealthy have their allowances reduced such that they actually pay more than they do now, even with no rate increase, the revenue increase the Democrats want should occur. And, if the no increase in marginal rates that Republicans insist on actually does spur economic growth, there will be a potentially huge bonus in the resulting increased revenue across the board.
Romney alluded to this in the first debate, almost in passing...suggesting a cap on itemized deductions of a certain dollar amount (or perhaps a certain percentage of income) that can be used for whatever item (mortgage interest, charitable contributions, state taxes, etc.) that is most salient for each individual wealthy tax-payer. No-one's favorite deduction has to bear the entire burden. And, if that cap is small enough, the amount of tax actually collected from the wealthy can increase even if their marginal rates come down. Victory is available to both sides here.
A Bigger Fight over Entitlements.
More revenue from the wealthy, alone, won't solve the problem of annual trillion dollar deficits. There isn't enough income or wealth among the wealthy to solve the problem even if the government confiscated all of it (and what's left then for a second act?). Much reduced spending is even more essential than revenue increases, particularly reductions in the area of our expected "entitlements" committments. Here, the Democrats have the longest road to travel. At least they are no longer asserting that there is no problem. There is...and a very big one. The demographics are working against these programs and the reserve "funding" is imaginary: the government's own IOU's. Major structural changes are necessary, and fast.
The Democrats will need to quickly abandon their pledges never to do anything to change these programs' benefits nor ever employ viable alternative funding mechanisms.
To me, it seems that the only politically workable solution is to employ a combination of some form of grandfathering for current beneficiaries with many partial solutions for the future so that opposition to any one of them is too small to wreck the whole package:
The American people are neither stupid nor blindly self-interested. Let's abandon all the pretenses. With a sensible plan and effective leadership, we can solve these problems. To quote President Obama's closing exhortation
yesterday: "Let's get busy!" Regardless of our vote on election day, we can all agree with that.
Mitt Romney is indeed a very good man, smart, compassionate, and very generous, worthy of respect and admiration. I disagree with several aspects of his announced social agenda, but I would be much more optimistic about good economic results in the coming years with him in the White House. I am convinced that we've got to get the economics right before we can effectively tackle whatever social agenda is appropriate for any government to pursue...and, for me, that's not really very much. I would feel much more comfortable having government, with its potential for the tyranny of the majority and its susceptibility to influence by very committed, though small, interest groups, exert its huge power in favor of no social agenda at all. So, I could tolerate a few cringe-worthy social policy perspectives, from either left or right, in order to get the really higher priority economic issues on a better path.
We did come very close to what I think would have been, overall, a better result. If the election were a few days earlier, before Hurricane Sandy took Romney off the front page and put the President in the role of Rescuer in Chief... or a few days later, after the further doubts about Benghazi emerged in the main stream press, and Petraeus resigned in shame, and the increasing Katrina-ization of Sandy's aftermath, Romney could have squeaked thru. As it is, Obama's "victory" was less emphatic (a narrower popular vote margin and fewer electoral votes) than his initial election 4 years ago; and it was pretty thin in any event. 50 million plus people voted for the other guy...and some of Obama's crucial electoral college wins were in fact very close.
Still, as everyone now observes, the Romney/Republican campaign failed to adequately capture the confidence of key...and growing...segments of the electorate, especially the young, women, and Hispanics and other immigrants. If they fail to better welcome and respond to these groups, shame on them. They won't deserve future electoral victory and they probably won't get it, despite the very high relevance to these groups of the key Republican themes of smaller, less intrusive government, self-reliance, and upward economic mobility thru one's own effort. It now seems clearer that they won't get enough people to adhere to this set of values unless they also share more common ground on important social issues as well. If Democrats, in turn, can also move from their current stance closer to the center on issues of long range fiscal discipline, we could all celebrate a very happy new day in American politics and be much more optimistic about the life of our nation going forward.
A Time for Compromise
Everyone says that they hope for it, and the "fiscal cliff" at year-end provides a deadline to get serious about it, but the actual political and structural fundamentals for compromise don't look especially promising. Yesterday, three days after the election, Obama, still in hot campaigning mode, had selected citizens standing on risers behind him...in the East Room of the White House (!)...as he claimed a popular mandate and brandished his pen in a challenge to Republicans to send him legislation to sign that met his requirements of increasing taxes on wealthier Americans. Meanwhile, the Republicans claim a mandate of their own, retaining control of the House and still having filibuster capability in the Senate. Whatever mandate that is, however, is also pretty skinny; they now will hold fewer seats in both houses than before.
So, maybe those chastened positions, on both sides, provide an environment for progress; and maybe the first element of a recipe for collaborative success relies on a careful parsing of the respective rhetoric on taxes. For a long time now, there's been a deliberate obfuscation (particularly, I think, by Democrats) of the crucial difference between rates of tax, on the margin, and absolute volumes of tax collected. Republicans insist on no increase in rates (and argue strongly for even reducing them); Democrats insist on making the "millionaires and billionaires" pay more. Instead of comparing warren Buffet's, or Mitt Romney's, tax rate with the rate their secretaries pay, let's have both sides acknowledge that you can increase the amount of tax anyone pays, without increasing the marginal rate...or even when lowering it... if allowances or deductions are reduced or eliminated and if additional categories of income are subjected to tax.
With the right leadership, the American people are smart enough to grasp this structural choice and the arithmetic involved and to at least then intelligently debate the merits of marginal rate increases or decreases as incentives or disincentives toward economic growth. The data, such as exists, is regrettably not conclusive on this. For now, it's more a matter of faith and logic on the side in favor of low marginal rates and a sense of distributive fairness on the other. But, if the wealthy have their allowances reduced such that they actually pay more than they do now, even with no rate increase, the revenue increase the Democrats want should occur. And, if the no increase in marginal rates that Republicans insist on actually does spur economic growth, there will be a potentially huge bonus in the resulting increased revenue across the board.
Romney alluded to this in the first debate, almost in passing...suggesting a cap on itemized deductions of a certain dollar amount (or perhaps a certain percentage of income) that can be used for whatever item (mortgage interest, charitable contributions, state taxes, etc.) that is most salient for each individual wealthy tax-payer. No-one's favorite deduction has to bear the entire burden. And, if that cap is small enough, the amount of tax actually collected from the wealthy can increase even if their marginal rates come down. Victory is available to both sides here.
A Bigger Fight over Entitlements.
More revenue from the wealthy, alone, won't solve the problem of annual trillion dollar deficits. There isn't enough income or wealth among the wealthy to solve the problem even if the government confiscated all of it (and what's left then for a second act?). Much reduced spending is even more essential than revenue increases, particularly reductions in the area of our expected "entitlements" committments. Here, the Democrats have the longest road to travel. At least they are no longer asserting that there is no problem. There is...and a very big one. The demographics are working against these programs and the reserve "funding" is imaginary: the government's own IOU's. Major structural changes are necessary, and fast.
The Democrats will need to quickly abandon their pledges never to do anything to change these programs' benefits nor ever employ viable alternative funding mechanisms.
To me, it seems that the only politically workable solution is to employ a combination of some form of grandfathering for current beneficiaries with many partial solutions for the future so that opposition to any one of them is too small to wreck the whole package:
- postponed retirement ages
- increased payroll tax rates
- larger taxable base
- means-testing of benefits
- partial privatized accounts (maybe increased IRA and HSA opportunities, funded by a part of the payroll tax)
- vouchers for parts of Medicare/Medicaid benefits (see blog post of March 3, 2010)
- mandated catastrophic insurance coverage, in addition to or in lieu of mandated "first dollar" coverage (also see blog post of March 3, 2010)
- portions of governmental components' prefunding committed to real, third-party investments, instead of Treasuries.
- and, probably some additional solutions as well.
The American people are neither stupid nor blindly self-interested. Let's abandon all the pretenses. With a sensible plan and effective leadership, we can solve these problems. To quote President Obama's closing exhortation
yesterday: "Let's get busy!" Regardless of our vote on election day, we can all agree with that.
Monday, November 5, 2012
Voting for Vengeance?
It's the day before election day and like, I'm sure, most Americans, I'm exhausted by this presidential campaign...eager for it to be over, almost regardless of who wins the White House. I yearned, throughout, for a more substantive discussion of the very serious issues facing our country, but there was very little of that from either side. What is, however, increasingly clear is that there is a real choice in front of the American people about what kind of nation we will strive to be; where we will put our emphasis in the next several years. Though I am not a fan of harnessing the coercive power of government to any particular social agenda, my instincts favor most (but not all) of what the Obama administration and its supporters on the left would also prefer. So, despite that personal preference, my vote has long been decided in favor of the Romney/Ryan ticket for what I believe it will do to foster good results in the more important (and more governmentally appropriate) and the more immediately urgent issues of economic growth, fiscal discipline, tax reform, and structural changes necessary to solve the entitlements disaster looming on the near horizon.
So, I hope the Republican ticket wins. Less important, I hope that Barack Obama loses. I had voted for him in 2008 and hoped that he would be a true agent for change and the pragmatist he was reputed to be. Instead, I'm afraid we got an inexperienced ideologue. I still find him an attractive personality, but I'm convinced he does not belong in the role of our nation's head of state and our government's chief servant. I would be enthused to have him as a delightful dinner companion or an enjoyable weekend houseguest. I would be eager to engage in spirited interchange with an obviously very intelligent, eloquent, and deeply commited person; but I do not trust him in a position of enormous power precisely because I do not share his convictions.
If I needed further convincing of that, it came a few days ago, where, at a campaign rally, in response to a comment from the crowd, he urged his supporters to "vote; it's the best revenge".
Really!?!
Revenge for what? What wrongs have been perpetrated, by whom, against whom, does he feel need to be avenged? And in what way would an election be the proper vengeance in any event. If you saw and heard Obama's statement, it's obvious that this remark did not appear on his teleprompter. It was instinctual, in the moment, unscripted, coming from the man's gut, revealing him as the class warrior and unreconstructed community organizer many fear. It was an expression of genuine, unguarded belief not worthy of a man who should be President of all of the people of the United States.
So, I hope the Republican ticket wins. Less important, I hope that Barack Obama loses. I had voted for him in 2008 and hoped that he would be a true agent for change and the pragmatist he was reputed to be. Instead, I'm afraid we got an inexperienced ideologue. I still find him an attractive personality, but I'm convinced he does not belong in the role of our nation's head of state and our government's chief servant. I would be enthused to have him as a delightful dinner companion or an enjoyable weekend houseguest. I would be eager to engage in spirited interchange with an obviously very intelligent, eloquent, and deeply commited person; but I do not trust him in a position of enormous power precisely because I do not share his convictions.
If I needed further convincing of that, it came a few days ago, where, at a campaign rally, in response to a comment from the crowd, he urged his supporters to "vote; it's the best revenge".
Really!?!
Revenge for what? What wrongs have been perpetrated, by whom, against whom, does he feel need to be avenged? And in what way would an election be the proper vengeance in any event. If you saw and heard Obama's statement, it's obvious that this remark did not appear on his teleprompter. It was instinctual, in the moment, unscripted, coming from the man's gut, revealing him as the class warrior and unreconstructed community organizer many fear. It was an expression of genuine, unguarded belief not worthy of a man who should be President of all of the people of the United States.
Sunday, August 12, 2012
A Clearer Choice: Hooray!!
Romney's selection of Paul Ryan as his running mate will, we can hope, move this Presidential campaign beyond trivia, name calling, and defamation. The American people are hungry for genuine consideration of serious policy choices and are capable of discerning attractive resolutions within the unavoidable complexity. The time for division, demogogic over-simplification, and class warfare should never have arisen; but it is now high time for it to depart.
So, for the first time in a long while, we can hope for a clear set of choices. If the current administration has superior approaches to foreign policy matters, let them bring them to the public floor. If the Republican challengers have more articulate plans for economic growth and rational tax policy, let's hear them, clearly (if not loudly, thank you!). If candidates have a set of possible solutions to the problems around the long term viability of Social Security and Medicare (see blog post of March 3, 2010), let's bring them forward for careful consideration. And, in any event, let's agree that there are problems with these entitlements systems. The most disingenuous position of the Democrats is that everything here is just fine. The demographics/economics of these systems (in the US and almost everwhere else in the world...and especially in some parts of the developing world) are definitely not fine. Either a great inter-generational injustice or a sudden retraction of long-standing promises...or both... is about to be inflicted. Financial professionals have a duty to our fellow citizens, everywhere, to blow the whistle on this!
My sentiments among these choices favor the challengers. I understand, of course, that there are many nuances here and I strongly believe that we should not harness the power of government to any set of social policies...Left or Right. While, on a personal level, I am deeply sympathetic to the "social justice" components of their overall motivations, I see the general thrust of the Left's economic policies being very seriously flawed: some version of redistribution of income and wealth from the more successful to the less so and a large role for government in economic decision-making. Despite genuine good intentions, this choice repeats the error now on display in most of Europe and seems to ignore the great, failed economic experiment of the 20th century: Soviet Communism, which made everyone under its sway poor. And, while I wince (or worse) at some of the social policy perspectives of the Right, I concur with their general desire for limited government intrusion and for incentives to foster individual economic success and to impose disincentives on failure to exert effort.
The debate, then, should be joined over which is the greater good: reducing disparities in relative wealth or enhancing virtually everyone's absolute wealth, across generations, despite even greater relative disparity. It's not a case of "either/or", but of emphasis. It's also a matter of understanding and accepting tolerable costs for that desired emphasis. How do we get to what we decide is the greater good? Let's understand the costs...we're smart enough to do this; let's decide, as a society, what costs, and how much of them, we're willing to bear...we're fair enough to do this; and let's agree on the benefits we desire...we're insightful enough and optimistic enough to accomplish this.
I vote for everyone's greater absolute wealth... even at the cost of greater disparity in relative wealth. History is on my side. Even the "poorest" people today, almost anywhere on the planet, have much better health, longer life span, greater access to movement and communication, and greater freedom of choice of economic outcomes than the "richest" people of just 100 years ago. Not many well-informed persons of 2012 would trade places with even the wealthiest person of 1912. Maybe it would be fun for a day or a week...but not many would make that permanent switch.
So, America has a now clearer choice this November: do we want to be, in the words of our national anthem, more of "the land of the free and the home of the brave" or instead move further toward being the land of the indebted and entitled and the home of the timid and dependent? We get to choose; we have to choose!
So, for the first time in a long while, we can hope for a clear set of choices. If the current administration has superior approaches to foreign policy matters, let them bring them to the public floor. If the Republican challengers have more articulate plans for economic growth and rational tax policy, let's hear them, clearly (if not loudly, thank you!). If candidates have a set of possible solutions to the problems around the long term viability of Social Security and Medicare (see blog post of March 3, 2010), let's bring them forward for careful consideration. And, in any event, let's agree that there are problems with these entitlements systems. The most disingenuous position of the Democrats is that everything here is just fine. The demographics/economics of these systems (in the US and almost everwhere else in the world...and especially in some parts of the developing world) are definitely not fine. Either a great inter-generational injustice or a sudden retraction of long-standing promises...or both... is about to be inflicted. Financial professionals have a duty to our fellow citizens, everywhere, to blow the whistle on this!
My sentiments among these choices favor the challengers. I understand, of course, that there are many nuances here and I strongly believe that we should not harness the power of government to any set of social policies...Left or Right. While, on a personal level, I am deeply sympathetic to the "social justice" components of their overall motivations, I see the general thrust of the Left's economic policies being very seriously flawed: some version of redistribution of income and wealth from the more successful to the less so and a large role for government in economic decision-making. Despite genuine good intentions, this choice repeats the error now on display in most of Europe and seems to ignore the great, failed economic experiment of the 20th century: Soviet Communism, which made everyone under its sway poor. And, while I wince (or worse) at some of the social policy perspectives of the Right, I concur with their general desire for limited government intrusion and for incentives to foster individual economic success and to impose disincentives on failure to exert effort.
The debate, then, should be joined over which is the greater good: reducing disparities in relative wealth or enhancing virtually everyone's absolute wealth, across generations, despite even greater relative disparity. It's not a case of "either/or", but of emphasis. It's also a matter of understanding and accepting tolerable costs for that desired emphasis. How do we get to what we decide is the greater good? Let's understand the costs...we're smart enough to do this; let's decide, as a society, what costs, and how much of them, we're willing to bear...we're fair enough to do this; and let's agree on the benefits we desire...we're insightful enough and optimistic enough to accomplish this.
I vote for everyone's greater absolute wealth... even at the cost of greater disparity in relative wealth. History is on my side. Even the "poorest" people today, almost anywhere on the planet, have much better health, longer life span, greater access to movement and communication, and greater freedom of choice of economic outcomes than the "richest" people of just 100 years ago. Not many well-informed persons of 2012 would trade places with even the wealthiest person of 1912. Maybe it would be fun for a day or a week...but not many would make that permanent switch.
So, America has a now clearer choice this November: do we want to be, in the words of our national anthem, more of "the land of the free and the home of the brave" or instead move further toward being the land of the indebted and entitled and the home of the timid and dependent? We get to choose; we have to choose!
Tuesday, August 7, 2012
ENOUGH!!...about Romney's Tax Returns
If I were Romney, I would publish the tax returns that his political opponents are clamoring for...but not because he has a duty to do so; but only to get this issue behind him. And I wouldn't do it in the way they request.
I respect his right to privacy about his returns. We all should. We should understand that he is already complying with the existing laws relating to disclosure. If the degree of disclosure is not enough to satisfy legitimate needs for understanding better his financial circumstances, then change the law and make more extensive disclosure mandatory. But, meanwhile, it would probably be good, as a political expedient, to volunteer to do more than is now actually required.
And, I believe that there are ways to do that that will not compromise his and his family's legimate privacy interests.
But, first, a comment on the apparently malicious, or at least ignorant, charge or innuendo that his acknowledged holding of overseas accounts must mean that he is somehow avoiding the payment of appropriate US taxes. It is fundamental that all US citizens must pay income taxes on all income, from anywhere in the world. If Romney were using foreign accounts to avoid paying proper US taxes, he would be, already, in very serious violation of the tax law and would no doubt be disqualified from any political candidacy. The continued implication of this wrongdoing, and the glee with which the media reports and repeats it, is shameful. The only excuse would be that the accusers are truly ignorant of this fundamental principle of taxation of worldwide income and ignorant of the many legitimate reasons for persons of even modest wealth to pursue the protections offered by certain overseas jurisdictions. Many medical professionals, for example, maintain "asset protection" accounts in places like Switzerland or the Caymans as a way of shielding those assets from the scrutiny of opportunists (but not from the scrutiny of the IRS) and from the claims of unjustified creditors. But no US citizen can, legally, use them to avoid income taxation of the income they may generate. If knowingly false accusations would be shameful, the alternative of ignorance is nearly as bad.
So, here's what I would do if I were Romney: enlist a small group of impeccably highly qualified persons (say, the heads of the personal income tax practice at each of the Big 4 accounting firms) to review the returns and then report, publicly, their findings on two points:
I respect his right to privacy about his returns. We all should. We should understand that he is already complying with the existing laws relating to disclosure. If the degree of disclosure is not enough to satisfy legitimate needs for understanding better his financial circumstances, then change the law and make more extensive disclosure mandatory. But, meanwhile, it would probably be good, as a political expedient, to volunteer to do more than is now actually required.
And, I believe that there are ways to do that that will not compromise his and his family's legimate privacy interests.
But, first, a comment on the apparently malicious, or at least ignorant, charge or innuendo that his acknowledged holding of overseas accounts must mean that he is somehow avoiding the payment of appropriate US taxes. It is fundamental that all US citizens must pay income taxes on all income, from anywhere in the world. If Romney were using foreign accounts to avoid paying proper US taxes, he would be, already, in very serious violation of the tax law and would no doubt be disqualified from any political candidacy. The continued implication of this wrongdoing, and the glee with which the media reports and repeats it, is shameful. The only excuse would be that the accusers are truly ignorant of this fundamental principle of taxation of worldwide income and ignorant of the many legitimate reasons for persons of even modest wealth to pursue the protections offered by certain overseas jurisdictions. Many medical professionals, for example, maintain "asset protection" accounts in places like Switzerland or the Caymans as a way of shielding those assets from the scrutiny of opportunists (but not from the scrutiny of the IRS) and from the claims of unjustified creditors. But no US citizen can, legally, use them to avoid income taxation of the income they may generate. If knowingly false accusations would be shameful, the alternative of ignorance is nearly as bad.
So, here's what I would do if I were Romney: enlist a small group of impeccably highly qualified persons (say, the heads of the personal income tax practice at each of the Big 4 accounting firms) to review the returns and then report, publicly, their findings on two points:
- had there been any illegitmate manipulation of the tax law?
- had the Romneys taken advantage of tax planning any more agressively than they would have condoned for any of their similarly situated clients?
Monday, August 6, 2012
It's Not Too Late
Only a little over two weeks since Aurora, (see post of July 22, 2012) America again faces the pain and frustration of a mass shooting. What incredibly sad irony, the killing and wounding of Sikhs, and first responder police, within their temple, and during a worship service. The Sikhs are gentle, tolerant, peace-loving people. It's hard to imagine a religious group less likely to inspire violence against them. And, here again, the murderer gave little indication of the huge threat he posed to those around him and, I suspect we'll learn, acquired his weapon or weapons fully legally.
It is well past time...and it's not too late...to seriously address the significant problems of public safety that our current culture and law of gun tolerance presents. Joe Klein, in the current issue of TIME Magazine, presents very sobering statistics about the prevalence of these mass shootings throughout at least the past 35 years and how prior assault weapons controls showed no apparent relief from the carnage. However, that implies a logical fallacy. Because that particular legislation failed to lessen the violence it does not follow that no legislation, no cultural shift can do so. Klein also, with chagrin and apparent resignation, also cites polling data that shows much reduced support for stricter gun controls over the past 20 years. I am more optimistic about the future.
The data are what they are, but they are not destiny. With strong and persistent leadership, from public opinion-makers, from legislators, from whoever resides in the White House, we can effect a change in this mentality toward access to weapons and toward aggressive treatment of mental illness that threatens us all. The current balance between individual liberties and public welfare and safety is just plain wrong. We can do better. We must. Shame on us all if we don't even try.
It is well past time...and it's not too late...to seriously address the significant problems of public safety that our current culture and law of gun tolerance presents. Joe Klein, in the current issue of TIME Magazine, presents very sobering statistics about the prevalence of these mass shootings throughout at least the past 35 years and how prior assault weapons controls showed no apparent relief from the carnage. However, that implies a logical fallacy. Because that particular legislation failed to lessen the violence it does not follow that no legislation, no cultural shift can do so. Klein also, with chagrin and apparent resignation, also cites polling data that shows much reduced support for stricter gun controls over the past 20 years. I am more optimistic about the future.
The data are what they are, but they are not destiny. With strong and persistent leadership, from public opinion-makers, from legislators, from whoever resides in the White House, we can effect a change in this mentality toward access to weapons and toward aggressive treatment of mental illness that threatens us all. The current balance between individual liberties and public welfare and safety is just plain wrong. We can do better. We must. Shame on us all if we don't even try.
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