What do Stalin, Mao and Obama Have in Common? Nothing.

Over the past several years, as President Barack Obama has occupied the White House, his detractors have ceaselessly labeled his policies as communist or socialist. Pundits like Glenn Beck often carefully choreographed imagery of the Soviet Union’s hammer and sickle flag, or the Nazi’s swastika when referring to Mr. Obama and his policies. The notion that Democrats support socialism has become a foregone conclusion in conservative communities. As one who formally studied economics and political science at BYU, hearing these terms twisted far from their actual meaning, and observing the comparison of programs like Medicare and the Affordable Care Act to Stalinist Russia, make me cringe. For Republican strategists, the purpose in making such comparisons to the genocidal regimes of Stalin, Mao, or Hitler are obvious- striking fear in their largely uninformed constituents. This messaging strategy has worked marvelously as more and more Americans now simply refuse to even consider the merits of any policy proposal that the GOP punditry has labeled “socialist” or “communist.”

Obamacare Unlocks American Innovation

America’s antiquated health care insurance system has hampered innovation and ultimately slowed economic growth for decades due to the insurance system’s perverse incentives. However, the 2010 Affordable Care Act (ACA), or Obamacare, has done much to reverse those disincentives. Consider the following scenario:

The Tyranny of Gross Income Inequality

In a 2012 General Conference address, Elder M. Russell Ballard of the Quorum of the Twelve Apostles of the Church of Jesus Christ of Latter-day Saints, expressed concern about "the ever-growing gap between the rich and poor." Elder Ballard's concern about gross wealth inequality has been shared by many of his predecessors. Elder Orson Pratt once observed that "an inequality of property is the root and foundation of innumerable evils; it tends to derision, and to keep asunder the social feelings that should exist among the people of God.... It is a principle originated in hell; it is the root of all evils.... It is inequality in riches that is a great curse."

Shutdown Antics Threaten Constitutional Order

The current shutdown of the federal government and upcoming showdown over the debt ceiling has caused many people to ask who is to blame for this gridlock. The media, in its effort to try to report both sides of the story, often end up giving balanced treatment to an unbalanced phenomenon. What we have is an extremist element within the minority political party that refuses to accept the results of the previous elections. Leading up to the shutdown, House Republicans demanded defunding of the Affordable Care Act (or Obamacare) in exchange for passing a continuing resolution budget that would fund the rest of the federal government for a brief period. Republicans also threatened to prevent the debt ceiling from being raised that could result in a catastrophic default on our national debt if their demands are not met. In making these demands, Republicans are attempting to thwart the Constitutional order of our government while threatening financial and economic chaos.

Stop Subsidizing Walmart: Raise the Minimum Wage

A recent study of Wisconsin's Medicaid program revealed that Walmart ranked first on state's list of Medicaid enrollment by employer. In other words, Walmart employees in Wisconsin comprise a plurality of the state's Medicaid recipients. Altogether, a single Walmart Super Center costs Wisconsin taxpayers about $900,000 per year in poverty subsidies for employees, such as food stamps, Medicaid, school lunches, and housing assistance because the employees are paid significantly less than what is reasonably required to survive at a minimum standard. Most Americans have rightly decided that we will not allow our fellow citizens, especially children, to starve or go homeless. We have a safety net for the poorest Americans, most of whom live in working households. However, Walmart and all other minimum wage employers are passing on much of this burden from themselves to the taxpayers.

An Economy on the Rebound

When President Barack Obama took the oath of office on January 20, 2009, the U.S. economy was in free fall. During the preceding year and half, some of the nation’s largest and most important financial institutions went bankrupt, including Bear Stearns, Countrywide, and Lehman Brothers, as risky loans and other investments failed. Many other large banks were on the verge of collapse. The downfall of the financial sector had been preceded by a spectacular end to a massive speculative housing bubble that almost instantly wiped out trillions of dollars of Americans’ net worth. When Lehman Brothers and AIG went into bankruptcy during the same weekend in September 2008, panic ensued all across the economy. It felt like 1929 all over again. The Troubled Asset Relief Program (TARP), which was signed into law by President George W. Bush and was implemented by President Obama, stopped the bleeding in the financial sector, but the damage to the broader economy had already been done as other sectors of the economy continued to rapidly deteriorate. The stock markets plummeted, losing more than half of their peak market capitalization just six weeks after Obama took office. Many retirees and workers nearing retirement saw their investment portfolio lose much of its value. Millions of people lost their jobs due to no fault of their own after the U.S. entered a recession in December 2007. Over 1.2 million Americans were laid off between the election and Obama’s inauguration. All told, the Bureau of Labor Statistics estimates that 8.7 million jobs were lost due to the Great Recession. No president since Franklin D. Roosevelt has begun their tenure in the White House under such dire circumstances. An evaluation of each segment of the economy around the time Obama took office compared to now shows that we are definitely better off four years later.

The Case Against Mitt Romney

Mitt Romney’s nomination as the 2012 Republican candidate for President is an important and historical moment for me and many other members of the Church of Jesus Christ of Latter-day Saints across the U.S. and the world. A thick glass ceiling was shattered when Romney, a prominent member of my faith, overcame anti-Mormon bigotry prevalent in parts of the Republican primary electorate to clinch the GOP nomination. During the past twelve years we have been witnesses to a triumph over a wide array of social prejudices in American politics with the nomination of Senator Joseph Lieberman, who is Jewish, as the Democratic Party’s vice presidential candidate in 2000, Hillary Rodham Clinton’s historic run as the first serious female contender for the White House in 2008, and Barack Obama’s election as the county’s first African-American president. We may very well have a Mormon as our President starting next January. While I admire Romney’s dedicated unpaid service in my church as a bishop and stake president, believe that he is a good family man who also cares deeply about our country, and am thrilled by Romney’s ascension to the GOP nomination in this Mormon moment, I am confident that he is the wrong person for the job of President of the United States.

Does Romney Believe Laziness Causing High Unemployment?

Remarks that Mitt Romney made to wealthy donors back in May 2012, have put Romney in an awkward position. Romney denigrated nearly half of the population of the U.S. and erroneously claimed that Obama supporters were all dependent on government assistance. After receiving a question about how Romney would be able to win the election, Romney remarked:

How I Benefited from the Obama Housing Policy

I am someone who has personally benefited from some of President Obama's economic policies. In addition to getting the temporary payroll (Social Security) tax break, I am now refinancing my underwater home through President Obama's Home Affordable Refinance Program (HARP). My home is now worth about $25K less than I owe due to the collapse of the housing bubble, and in three years I would be facing a significantly increased interest rate from the already high rate I have now if I were not able to refinance. I acquired my home in 2005 with a 10-year fixed rate, which would change to an adjustable rate mortgage at the 10-year maturity, because I did not plan on living there for over 10 years. But the housing crash put me in a difficult situation, as it has done for millions of Americans, and made refinancing pretty much impossible. Of course, selling the home at such a huge loss was not a viable option for me either. As I researched my refinance options, I found that no lender would have granted me a refinance loan for my underwater property on their own volition, even though I have never made a late payment. It's only through HARP that I am now able to refinance and take advantage of some of the lowest interest rates in about half a century, and it didn't cost the American taxpayers a nickel for me to do so. So thank you Mr. Obama, for helping me and millions of other Americans keep our homes with even lower monthly payments.

A Minimum Living Standard in the World’s Wealthiest Country

In the last post, I illustrated how the positive right to an education is essential to a modern economy. Most Americans do not question the right to a public education, perhaps because it has been a fact of American life for over a century. Other positive rights adopted to some extent by American society, which are unfortunately more controversial, include the right of the disabled to a dignified existence, the right to food and shelter, and the right to life-saving emergency care. Most recently, through the 2010 Affordable Care Act, we adopted in principle the right to adequate comprehensive health care.

Defending a Century of American Progress

Massachusetts Senate candidate Elizabeth Warren, in an oft-seen video clip, describes how a thriving industrialized economy is dependent on government taxation and redistribution for the creation of key institutions, infrastructure, and social programs: She notes, “there is nobody in this country who got rich on his own.”

She mentions factory owners who “move [their] goods to market on the roads the rest of us paid for,” and “hired workers the rest of us paid to educate.” She adds that police and fire services, that “the rest of us paid for” kept them safe and prevented them from having to hire their own security and fire defense forces. She ends by saying, “Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

Thank Romney for Underscoring Need for "Buffet Rule"

After losing the South Carolina Primary to Newt Gingrich, possibly in part due to his waffling at the pre-Primary debates about releasing his tax returns, Mitt Romney released his tax returns for the past two years, which show that he paid about 14% in federal taxes on income of nearly $43 million. The timing of Romney's tax return release was impeccable- for Democrats. For months, President Obama and Democrats have been attacking Republicans for wanting to maintain tax breaks and loopholes for the super-wealthy. Last August, Warren Buffet pointed out in an op-ed that he paid a lower federal tax rate than his secretary in 2010. He paid about 17.4%, whereas his office staff paid an average of 36%. Buffet rightly pointed out that this simply isn't fair. He added, "it’s time for our government to get serious about shared sacrifice."

Last October, the non-partisan Congressional Research Service released a report that indicated 25% of all households earning at least $1 million annually are paying a smaller share of their income than a large segment of the middle class. The report adds that 94,500 millionaires pay a lower tax rate than most of the middle class and that 7,000 millionaires pay no income taxes at all.

The reason for this is because of the payroll tax (Social Security tax), which doesn't tax income above $107,000, and the capital gains tax rate, which is 15%. Investment income is usually taxed at this rate, which is much lower than earned income tax rates. Many of the super-wealthy make their money via investment income rather than earned income.

President Obama has talked about "the Buffet rule" as a way to help fight the budget deficit by implementing a higher minimum tax rate for people in the highest income bracket, to ensure they don't pay a lower percentage of income in taxes than the middle class. As he has stated, millionaires shouldn't be paying lower tax rates than their secretaries. Mitt Romney's revelation that he paid an effective federal tax rate of 14% underscores the notion that it is completely unfair for the super wealthy to pay less in overall taxes than the middle class. And it adds to the powerful narrative that was created by the Occupy Wall Street movement, whose underlying theme deals with the challenges posed by the incredible gap between the top 1% of earners in the U.S. and the rest of the country, and the disproportionate amount of power that the top 1% hold. Romney's tax returns show that we are in dire need of tax reforms that will create a fairer revenue system. If Romney becomes the GOP nominee, which seems pretty likely at this point, you can count on Romney's ridiculously low tax rate as becoming a major campaign issue. It will help show that the GOP's insistence in preserving Bush's tax cuts for the wealthy and Romney's advocacy for even more tax cuts for top earners are entirely out of touch with our federal budget deficit reality and lack any sense of fairness. So I thank Mitt Romney for serving as a poster-child for all that is wrong with the fiscal policies he and his party tirelessly support.

A Pivotal Moment for President Obama and America

President Barack Obama visited Osawatomie, Kansas last week to speak about the danger of the growing economic inequality in America and the threat this currently poses to the middle class and our country as a whole. I thought this was the most important speech of his Presidency thus far because it clearly illustrated the monumental challenges we face in dealing with a weak economy, high unemployment, and an eroding middle class. He emphatically connected the success of the middle class with the success of America and described how investments in education, infrastructure, and science and technology along with tax and financial industry reform are critical to our economic recovery. The speech was 55 minutes long, so I highlighted what I thought were his key points:

Communists Like Thomas Jefferson and Adam Smith

Conservatives often invoke our country's Founding Fathers as well as prominent historical figures like economist Adam Smith, whose ideas about the "invisible hand" of free markets helped form the theoretical foundation of modern capitalism, when they advocate far-right economic policies. Lately, there has been a lot of talk by GOP presidential candidates about creating a flat tax system in the U.S., particularly from Texas Governor Rick Perry and Godfather's Pizza founder Herman Cain. Ironically, you'll never hear a conservative pundit or politician point out that Adam Smith and Thomas Jefferson, among other historical figures, were strongly in favor of progressive taxation.

Taxes and Used Car Dealers

To support their argument against President Obama's calls additional revenue to solve the budget deficit, Republicans have argued that the U.S. has one of the highest corporate tax rates in the world. Democrats, on the other hand, have pointed out that companies and wealthy Americans are paying historically low levels of taxes. Paradoxically, both parties are right. To understand why, you need to think of the U.S. tax code like code like a user car dealership. Sticker prices are usually high at used car dealerships, but hardly anyone ever pays sticker price. The same is true with federal tax rates, especially with corporate taxes. Although the corporate federal tax rate in America is high (too high in my view), most companies take advantage of a plethora of loopholes and deductions that result in a much lower actual corporate tax. The Government Accountability Office released a study in 2008 that revealed 55% of U.S. companies paid no federal income taxes during at least one year in the seven-year period covered by the study. This makes our tax code look like a proverbial block of Swiss cheese, as the wealthiest companies and individuals are able to become savvy at tax avoidance by hiring the best accountants and tax attorneys who can find loopholes. The U.S. corporate tax rate needs to be competitive with the rest of the world. However, most countries do not have the kind of loophole-ridden tax system we have. Simply stated, we can help solve the massive budget deficit by raising revenue while actually lowering the corporate tax rate. This means we need to close the loopholes, end the subsidies (corporate welfare) and make the tax code fairer and the tax environment more predictable for businesses. The current Administration has supported this, but to date, the Tea Party element of the House Republican caucus has opposed anything that would increase the amount of revenue coming into the Treasury. Hopefully saner heads will prevail.

Presidents and Vacation

I meant to post this in August while Congress was on recess and President Obama was on vacation. It's not exactly a timely topic anymore, but I think it still warrants mentioning:

This August was a crazy time for American politics. The debt ceiling debate (or debacle) along with the "compromise" bill where the Democrats essentially gave in to nearly all of the GOP's demands, followed by the stock market's precipitous drop and frightening volatility have resulted in hysteria among some of the political talking heads. One thing that annoyed me a bit was constant criticism of President Obama for taking a vacation after the debt ceiling crisis was finally solved. It seems to me that every time Barack Obama and his family take some vacation time, they are subject to relentless attacks by the right-wing media. Conservative pundits on FOX News and elsewhere assaulted the President for taking vacation during such distressing economic times. Of course after the debt ceiling compromise bill was passed, Congress took a 3-week recess, and there isn't much the President can do about the economy without Congress. Even if the President recalled Congress, everyone should know by now that there is little chance the two parties could come to an agreement on measures to stimulate economic growth and fight unemployment anytime soon.

In hearing all of this criticism of the President and his vacation-taking, I wondered how he compared with his predecessors regarding the amount of vacation days he's taken. Fortunately, there are folks in the media who have nothing better to do than track Presidential vacation days.

CBS Radio's Mark Knoller observed the following in August:

So far, President Obama has taken 61 vacation days after 31 months in office. At this point in their presidencies, George W. Bush had spent 180 days at his ranch where his staff often joined him for meetings. And Ronald Reagan had taken 112 vacation days at his ranch. Among recent presidents, Bill Clinton took the least time off — 28 days.

Would FOX News care to publicize that comparison during their prime time shows?

Where Did All That Debt Come From?

I've intended since the spring to write about our country's current fiscal situation and how we arrived here. For months, Congressional Republicans have been asserting that our federal government does not have a revenue problem, it has a spending problem, and have argued for draconian spending cuts largely aimed at programs that benefit the middle class. And President Obama and many Democrats have largely conceded to the GOP on the issue, allowing them frame the debate about our economic woes as being the result of a large federal debt and ongoing budget deficit. Polling shows that a large majority of Americans blame our country's budget woes on wasteful government spending. However, it is critical to examine our country's fiscal policy during the past decade, to fully understand why our deficit and debt have become so large. The data show that the current budget deficit is primarily the result of 3 factors:

• Significantly decreased federal tax revenue due to the 2001 and 2003 Bush tax cuts for the wealthy;
• The wars in Iraq and Afghanistan, and other post-9/11 defense and security spending, which have added trillions of dollars in new debt;
• And more recently, the financial crisis of 2008 and recession have led to a dramatic decease in the amount of tax revenue coming into the U.S. Treasury (estimated to have increased the debt by $3.6 trillion).

Warren Buffet Paid a Lower Tax Rate Than His Secretary in 2010

In today's New York Times, billionaire investor Warren Buffett pointed out that he pays a lower federal income tax rate than his staff. His effective tax rate last year? 17.4 percent! His is not a unique case. Our tax code is written so that the wealthiest have the best tax breaks. As the President has said, everyone needs to pay their fair share. And since debt reduction is the pressing issue on politicians' minds in Washington, I hope that the new 'Super Congress' takes a balanced approach that includes significant revenue increases when they look for ways to improve our nation's budgetary problems. I plan on writing more about this and the recent debt ceiling debate - there is a lot more to the subject- but I was impressed by Buffett's Op-Ed.

Buffett states, "my friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice."

Reagan a Supporter of Collective Bargaining Rights

It has seemed apparent for some time that Ronald Reagan, the greatest icon of the conservative movement, would not be conservative enough for today's Republican Party. Attempts by Republicans in several state legislatures across the country to eliminate collective bargaining rights of public employee unions has truly been explosive-- the equivalent of the "nuclear option" in politics. Contrary to claims by Republicans such as Governor Scott Walker of Wisconsin, that these moves were made simply to help fight budget deficits, these attempts are nothing more than a power grab.

In Wisconsin, public employee unions had already agreed to cuts in pay and benefits amounting to 8 percent, doing more than their fair share in helping solve the budget crisis. However, for Walker and his party, that was not enough. He wanted to entirely prevent public employees from participating in negotiations regarding their pay, benefits, and work conditions. Demonstrating the blatant partisan nature of the move, Walker exempted some public employees from the collective bargaining ban, particularly those professions that tended to be Republican-leaning.

Princeton economist Paul Krugman points out, "you don’t have to love unions, you don’t have to believe that their policy positions are always right, to recognize that they’re among the few influential players in our political system representing the interests of middle- and working-class Americans, as opposed to the wealthy."

Krugman also states,

In principle, every American citizen has an equal say in our political process. In practice, of course, some of us are more equal than others. Billionaires can field armies of lobbyists; they can finance think tanks that put the desired spin on policy issues; they can funnel cash to politicians with sympathetic views (as the Koch brothers did in the case of Mr. Walker). On paper, we’re a one-person-one-vote nation; in reality, we’re more than a bit of an oligarchy, in which a handful of wealthy people dominate.

Given this reality, it’s important to have institutions that can act as counterweights to the power of big money. And unions are among the most important of these institutions.

It is, instead, about power. What Mr. Walker and his backers [have done] is to make Wisconsin — and eventually, America — less of a functioning democracy and more of a third-world-style oligarchy. And that’s why anyone who believes that we need some counterweight to the political power of big money should be on the demonstrators’ side.

The video clip above, which shows Ronald Reagan referencing the struggles of workers in Poland who wanted to organize into unions, demonstrates that even the Great Conservative Icon, who fired thousands of members of the Professional Air Traffic Controllers Organization when their union violated the law, recognized the important role that unions play in a free society. It's too bad we don't have any more semi-moderate Republicans like Reagan in contemporary politics.

Political Trivia: Who said the following?

"Where free unions and collective bargaining are forbidden, freedom is lost."

A. Barack Obama
B. Jimmy Carter
C. Ronald Reagan
D. Margaret Thatcher
E. Bill Clinton

Answer to be posted soon.