The Commonest Criminal

Common Sense

Every president after WW II, including Eisenhower, Kennedy, Johnson, Nixon, and Carter, cut the deficit as a percent of the Gross Domestic Product (GDP). Reagan, as shown in the graph on the left, more than doubled the deficit, adding almost $2 trillion back when a trillion was real money. Between 1980 and 1988, Reagan was busy cutting taxes as the deficit shot up (as you would expect), and it looked like he was doing nothing to pay for his tax cuts but that is not true. Just as is is being proposed today, Reagan was asking working families, the vast majority of Americans to pay the bills for his cutting the taxes of the top 1%. One key element in his program to cut costs was to remove people from the disability lists of social security, taking away benefits awarded by an Administrative Law Judge (ALJ) to claimants who had appeared, usually represented by an attorney, before an ALJ, presented evidence of their disability and, based on the law and testimony, been awarded benefits. The decision was made to revue disability cases and cut of benefits to those that didn't seem qualified in light of the government now running a huge deficit.

The problem was the law. Many of those who had had hearings, and been awarded benefits, felt that the decision, made after a hearing, could not be reversed because the government did not now want to pay, so they took their case to the Federal courts, and those courts agreed, in fact, one judge wrote in his judgment, "I would remand this case to you for your reconsideration if you were a real judge, but a real judge would know that the same testimony and evidence can not support two contrary decisions; you can not award benefits after a full hearing where the plaintiff is represented by an attorney who hears all the arguments,and then remove them in the middle of night without the plaintiff being represented. The commonest criminal in this country would better treated than a man who works honestly for 35 years, becomes disabled, and asks for the benefits that are his due, as you agreed. Therefore I am not remanding this for your reconsideration, the law is plain, I am ordering you to resume payments within 30 days." After this ruling, one of the first of what was to become many (and no claimant ever lost) because the Reagan administration decided not to correct their error, but to allow the constraints of the docket of the Federal courts put a brake on how many people could get their right to due process; the Reagan administration not only refused to accept as precedent that you can not use the same evidence to reverse a decision in the middle of the night, but they announced that ALJs would rated on how many decisions they made in favor of the claimant and those who decided in favor the worker too often would be removed. One ALJ told a co-worker that his decisions would now be based on how the decision affected him.

That is pretty much where we are today. There is a feeding frenzy of lobbyists trying to find a way to protect their clients, mostly by buying time with politicians, after writing big checks, and, like the common working man, there are few voices for the middle class and none for the poor. If you want to be heard in Washington, you must work with others to make sure your voice is heard and that congress respects your opinion, and the best way to do that is to make them stop taking campaign funds from lobbyists. You can do it; check out the 7 cent solution. See if it is not the best value and ask why your representative did not offer it to you 30 years ago. The commonest criminal still gets his day in court, represented by an attorney, but the honest middle class worker has no lobbyist demanding that congress look out for his or her rights. The majority of Americans deserve at least the consideration given every criminal facing such penalties, but congress does not provide or assure such consideration. Tell congress you want at least that much, you want to end the system of bribes that fund elections and take congress away from doing the work you pay them to do.

As a footnote you may want to consider the quality of political appointments that the current system provides us after every election. Since this article is about the Reagan years and social security, let's start there; Reagan appointed a woman to be head of the Social Security Administration (SSA) who felt she was above at least some the rules. When going on a trip, she insisted that an SSA employee drive her car and take her to National Airport. When they got there, she insisted that he (a black man) carry her bags to the airline check in, ignoring the porters waiting at the curb (you have to pay them). Even in the 80s, you could not leave an unattended vehicle at the drop off point to check in, so when the man came back to his bosses car, he was met by the police who asked; if it was his car? (no), did he have the registration? (no), whose car was it? (his boss's the head of SSA), how long had she lived in the area? (several years), why does she have expired Alabama (or some other "foreign" state; not local) tags on her car? (no idea). So the police said they could not allow him to move the car and they impounded it. Contempt for workers and contempt for any rules and the law, seem to go hand in hand, and if you remember how the political appointees at the Department of the Interior Minerals Management Service acted, you can see that nothing has changed.
washingtonpost.com/wp-dyn/content/article/2008/09/10/AR2008091001829.html

Obama: A Cost without Benfits

Common Sense

"President Obama abandoned a contentious new air pollution rule on Friday, buoying business interests that had lobbied heavily against it, angering environmentalists who called the move a betrayal and unnerving his own top environmental regulators...The E.P.A., following the recommendation of its scientific advisers, had proposed lowering the so-called ozone standard of 75 parts per billion, set at the end of the Bush administration, to a stricter standard of 60 to 70 parts per billion." NY Times 3 Sept 2011

Just as in the deficit negotiations, Obama points out the costs projected by business (always billions and lost jobs, ignoring the fact that if they are forced to spend billions, it is impossible to see how that can be done without creating jobs).

The cost completely ignored by business and its graceless sycophants is that we have a $2 trillion health care industry whose costs are passed on to consumers,and when those consumers get sick or die, there are real losses that are painful, and can drive even individuals with insurance into bankruptcy.

If Obama's house was on fire, he would not say, "We can not afford to put it out now; let's wait." and when pollution continues there are real costs that are tragic for the people affected. Those people have no lobbyists, so their voices do not seem to reach the White House, but the only reason for canceling a program is if the costs exceed the value of the benefits, and that is the argument that Obama did not make. He made the political judgment that big industries make large contributions, and voters rarely do.

This is hardly the first time that Obama has ignored working families. He accepted the parameter for the deficit talks that there would be $3 in spending cuts every $1 in tax increases. The spending cuts a necessary because he allowed the Bush tax cuts to continue. The spending cuts mean job losses; in August 2011, the private industry added 17,000 jobs and federal, state, and local governments laid off 17,000 workers. Nobody rushed to put help wanted ads in the paper. Layoffs are tax, particularly when they come when there are six people looking for every job being offered. A huge tax, but since Obama does not see the burden on working families as something he can work to political advantage, he does not address it. $3 in spending cuts is $3 of taxes to someone. Too bad Obama does not talk to those people.

How Reagan and Bush Blanced the Budget

Common Sense

Just joking, we know that Reagan and Bush did not balance the budget, unlike every president since WW II until Reagan, every other president, Democrat and Republican, reduced the deficit as a percent of Gross Domestic Product (GDP).So, why did the deficit go down under Carter,explode under Reagan and Bush, fall under Clinton, and explode under George W. Bush?

The answer is simple; every time you cut taxes for someone, you increase the deficit or you increase the burden on someone else, higher taxes or cut their benefits. Working families have not got raise in salary, except for a promotion or cost of living increase since 1975. While they failed to get a real raise (keeping up with the effect of inflation on the cost of living is not a raise), they did get benefits, like grants so they could send their children to college, and a variety of services we called the safety net. So long as Reagan, and then Bush, and after that, Bush again, were cutting taxes, nobody complained, and even Alan Greenspan said that paying off the deficit might not be a good idea. So the deficit kept climbing, nobody suggested taking benefits away, the middle class did not get a raise, but women stopped staying home raising the children so family income went up, and everyone was pretty happy with the ballooning deficit. It was not a problem.

And taxes keep coming down for the super rich, cut from 70% for income over (today's) $1.2 million in the Eisenhower years, down to under 20% by Reagan, Bush, Clinton, and then Bush again. The story told by Reagan and never doubted by Bush or Clinton, was the cutting taxes on the rich created jobs, and everyone got richer.

The problem was that the Reagan economic policy was what George H. W. Bush called, "Voodoo" economics. It did not work. Wages were not going up, and during the George W. Bush years, 2001 to 2009, the stock market went from 10,000 up to 10,000. That is not a typo, it did go up from time to time and then it went down, when Bush left office, it was where it was when he came in. Unless you were a banker, almost a decade wasted. Middle class wages went down and to keep up, people had to use their homes as an ATM. While the population was growing at a rate of 1.2 million new workers a year, the workforce grew, on average, under Bush by an average of less than half the growth of the workforce.

Nothing about the Reagan and Bush years was good for the middle class and working families. Time and again Reagan and Bush cut taxes without cutting spending, each time creating more of a burden to paid off later, after the reasons for the burden, tax cuts,were forgotten. Even Clinton got into the act, protecting the IT industry that would reward him so so handsomely after he left office, in what has long been seen as message to future presidents, by cutting the capital gains tax rates, the taxes on the sales of stock options that fuels so many IT CEO incomes:

"Even more interesting results arise from comparing the effects of the Bush tax cuts with the changes for investors that President Clinton signed into law in 1997. During Clinton's two terms, the effective tax rate for the top 400 (U.S. incomes) fell from almost 30 percent to 22.2 percent. Applying the Bush tax cuts yields a rate of 17.2 percent for income taxes only. That means that Clinton gave the richest of the superrich a much bigger tax cut than Bush." - David Cay Johnson, "Free Lunch".

Like Reagan, and like "W" Bush would do later, Clinton did not cut spending, he did not reduce benefits to the middle class, paid for by those taxes, he decided to just add to the deficit and let the debt be paid long after the reason it was incurred had been forgotten. After all, a grateful nation will not pay $50,000 a night in speaker fees after you leave office; grateful CEOs not only will, they will fly your wife around the country so she can campaign.

And then the banks made the bet that even though there were many more homes being built each month than there were qualified buyers to move into, the price of homes would never go down or even level off, so loans to people with no income and no assets would always be made good by the always rising home prices. The problem was, that was the dream, the reality is, since the first mortgage was ever made, that home prices go up sometimes, and then they go down. When they went down, all bets that lenders made that prices could not go down, were lost, and the bankers turned to people who always have bailed them out, the public.

The problem now, is that with no real raise in 40 years, no raise while the cost of health care and education climbed faster than inflation, there just enough money to bail out the banks and no more.So now there were only three things that could be done; increase taxes back to where they were when everyone was doing well, give the middle and working classes the raise they wer cheated out of, or cut the benefits working families got in lieu of raises that kept up with the increases in productivity of U.S. workers, and the long hours they put in. It is going to be a feeding frenzy for lobbyists. The deficit is going to be taken care, and the burden is going to be up one someone who does not have a lobbyist writing checks to congress. You can "man up" and pay off your (and the bank's) share of this disaster or pay just seven cents a day to get a congressional representative that works for you , not the lobbyists. Think if this way: letting the banks gamble on the housing market has added $25,000 to your share of the debt, and the recession will end up costing you another $25,000 in lost or lower future wages. Figure the two now cost you %150 a a month, and if interest rates on U.S. debt go up, it can cost more. $25 a year for publicly funded elections, or $2,000 in waste and abuse? Seven cents a day to pay for a better system that ends bribes, or $5 a day keep the system that abuses you? Which sounds better?