Stating a Path Forward

          In the midst of the non-starters called the State of the Union, I heard a few possibilities for a way forward strategically (although not politically).

Critics of our economic policy contend that we may end up like Greece. Not a chance. We are too vibrant and innovative a nation for this outcome. However, we certainly are becoming like Japan. In the 90s, Japan was poised for economic dominance in the electronics and finance sectors. But they have slipped from the world’s second largest economy to 24th, and their debt ratio to GDP is 230%. Why did this vibrant economy tank? Their government seized up and refused to make the tough choices needed to reform and move them forward. For Americans desiring their “side” to win at the expense of the other “side”, knock it off. If we don’t all move forward, we all lose.

It is unclear what direction Obama will actually devote energy towards, but he could jump start the economy with a few focused directions in structural reform and human capital investment. Since the Pope is quitting, I’ll put on his hat and provide some “if I were king” recommendations to the powers that be:

1. Energy- Convert the country to natural gas, since we are the Saudi Arabia of natural gas production now. Might as well use it. Bring in the oil from Canada and shoot for energy independence from people who hate us. Build more refineries. Why the hell do we have to send oil to Texas? Those refineries are knocked offline during every hurricane. Put more Americans to work in the energy sector until decentralized solar disrupts the whole damn thing in around a decade from now.
2. Tax reform- Get off the tax rich people bandwagon and onto the major overhaul the 73,000 page tax code bandwagon. Think Ronald Reagan. Lower the corporate rates and close the special interest loopholes. Create a new taxation category for small business to separate it from personal taxation and provide incentives for business creation. Fast track and incentive-ize business start-ups, hiring, and investment.
3. Infrastructure- We need to move away from infrastructure projects funded with taxpayer money. An infrastructure bank would create private/ public partnerships and toll-based building projects which could efficiently create thousands of new jobs, as well as keeping our bridges from collapsing.
4. EU trade agreement- A little recalled and less understood point was made concerning next years EU free trade agreement talks. This announcement is a blaze rather than a glimmer of good news. This trade agreement represents the consolidation of 50% of the planets production capability. Goods and exports could be manufactured and transported at per unit costs rivaling China. If handled wisely, this agreement could make the US-EU the most powerful economic zone on the planet and add millions of new jobs to supply emerging markets.

 

 

The Message on Medicare

            The upcoming sequestration will force automatic spending cuts in two large areas of government spending: defense and discretionary spending. While reducing spending might seem a lovely thing, across the board cuts will mean contracting the economy into recession, laying of over a half million people (who will want “benefits”) and reducing government services and capabilities.

            I’m not sorry to see cuts in “defense”. An internal audit under Gates concluded $300 billion in waste, fraud & redundancy. That’s just in the Pentagon. Since 9/11, the  “national security” infrastructure has grown beyond the size of eight Pentagons. Most of these agencies still get blank checks in the name of “security” against Abdul with a bomb in a backpack.

            While these issues may be rant-worthy, the point of this blog concerns the popular consensus on health care. It is clear that Medicare is unsustainable. It is also clear that the People don’t want their Medicare benefits reduced. People want far more government than they are willing to pay for.

            The People don’t want reductions in Social Security or Medicare. Democrats are riding that wave. The People don’t arrive at this position in a partisan manner. They have a longer memory than polls and pundits.

            Social Security was passed in the midst of the Great Depression in 1935. This was the first social safety net at a time when most Americans were falling off the fiscal cliff of the day. When Social Security was passed, less than 5 million Americans had any type of health coverage. Most health care was provided by small town doctors and care was administered in the home. When it was your time to go, you went. The People remember that level of health care.

            Medicare was passed in 1965. At that time, health insurance cost on average $1.65 a month and only 140 million Americans had it. Although medical care had advanced, urbanization made home care less of an option. The sick and elderly were packed off to relatives, much as had been done during the 19th Century. Hospitals were where you went to die. The People remember that level of care.

            Now we have whiz-bang Star Trek super-expensive medicine. An aspirin costs $50 in the emergency room. We can keep Gramps alive whether his brain is working or not. It only costs a bijillion dollars. We have more and more Gramps coming online all the time. Hence the unsustainable part of Medicare.

            I think that what the People are saying is they remember what life was like before Medicare and they’re not willing to live that lifestyle or quality of life. It’s just that simple. So in the sea of conflicting political messages, they’re saying “Find something else to cut. Get your Government hands off my Medicare.” I still love that one. Anyway, I think this is the heart of the message and it might be wise for politicians to reduce costs without reducing care.

Legal Stances

Some interesting stories in the news this week:

          The Big Banks have pretty much settled with the Government (State & Fed) to avoid further prosecutions for fraud and predatory lending, mortgage, and foreclosure practices. Slap on the wrist   , got off for pennies on the dollar.

          Yesterday, the Federal Justice Department announced a suit against Standard & Poor's. This is the first federal suit brought against a credit rating agency. Such agencies enabled the Great Recession by rating very risky mortgages as AAA, i.e. they lied. Sixteen state Justice Department's have also filed suit when internal documents emerged showing that they lied (allegedly). Standard & Poor's is accused of defrauding investors to increase profits and market share. We’ll see if anyone actually goes to jail. Hold no breath. S&P's defense? Everybody was believing and doing the same thing as they were. If everybody jumped off a cliff...wait a minute, they did.

          For persons desperately concerned about our federal deficit and the burden it will place on future generations, the CBO projected yesterday that the deficit will fall to $840 billion. Last year's deficit was $1.1 trillion.

          For persons desperately opposing investment in infrastructure because the spending will burden future generations, Texas A & M University released a study yesterday on how much time commuters spent in their cars. Largely because of gridlocked roads, commuters were found to spend 5.5 billion hours more in their cars in 2011 than they did in 2010. I would assume that since infrastructure does not magically repair itself, the 2012 numbers won't look much better when released. The study estimates $12.1 billion was wasted in time and fuel. All that sitting around released an additional 56 billion pounds of CO2 into the atmosphere.....which might turn out to be a burden on future generations, if you think about it.

          Professional bloggers tell me that blogs should focus on only one subject, and be no more than 500 words long. They misunderstand that I am Lord of my Writing Realm, and as sovereign, I make up the rules as I go along.

          In a similar manner, the Justice Department yesterday released their logic and legal reasoning for targeting and killing Americans living abroad who may be or might become a “terrorist” enemy mastermind. Tips for your next vacation: drones only travel at 89 mph. Drive fast.

          The leaked document was an internal Justice Department memo, and Administration officials scurried to clarify, justify, and cover bottoms. Atty. Gen. Eric Holder stated that the Administration’s policy of lethal force was based on a Congressional statute permitting combat against Al Qaeda and related groups. The Administration policy is to take “these kinds of actions” when there is “an imminent threat, when capture is not feasible, when we are confident that our actions are consistent with federal and international law.” The Justice Department white paper was prepared for a Congressional committee last year, and calls targeting senior enemy leadership “lawful acts of self-defense and not illegal assassinations. ”The White House Press Secretary called such actions “legal, ethical and wise.”  

          It is certainly wise strategically to eliminate enemy innovators. Israel tested and repeatedly demonstrated this model. When key innovators were eliminated, enemy cells dissipated. I absolutely agree with removing the heads of Hydra.

          My caution concerning this policy is not based on a defense of our enemies, but rather the threat posed to our civil liberties. The stated legal rationale is sketchy and incomplete. The leaked White Paper was based on Justice Department memos, which continue to remain classified.

          The leaked document demonstrates that this Administration is continuing the fine 21st century tradition of expanding Executive branch power. The lethal force decisions made by the Administration are not subject to any judicial review, and would appear to deny American citizens their right of due process. The Administration solely determines what constitutes an “imminent threat” and whether the American citizen/target is an enemy of the State. This “threat” may not reflect any actual plot, need not be based on clear evidence, or place the target near a battlefield. Did I mention that these decisions and executions are not subject to any other review, before or after. The target may represent a future          rather than current security threat. For example, the 16-year-old son of an operational leader was killed while having dinner with friends. I guess he looked suspicious, or the White House crystal ball was working that day.

          Such “limits” on Executive power appear rather subjective, like Dick Cheney with a dartboard. If the administration can “make up”their own limitations, they would appear not to be limitations at all.

          On the other hand, this is an incomplete summary document, leaked without permission. It does appear to be an effort at creating a narrow, restricted rationale for limiting Executive power. It also appears an attempt to reconcile Constitutional and international law with the changing realities of war. The drafters of this document point out that current armed conflicts present limited facts and require real-time decision-making. In addition, while due process accountability is usually experienced within our domestic legal system, it is not limited to the courts. Historically, Presidents been accorded latitude to exercise coercive force on American citizens during wartime. The document attempts to balance these key issues.

          While Executive latitude may appear realistic, the “limitations” on Executive actions expressed to date, such as imminent threat, are so broad and subjective that no other nation endorses the legality of this position. The assertion of power is expansive, a global reach. It is troubling that the Administration will not release rationale or criteria for vetting decisions concerning the use of lethal force. They are also strongly resisting any congressional or judicial oversight or accountability for these decisions.

          While strategically justifiable, the ability of the Executive branch to execute Americans abroad appears to me as much an overreach legally as torture and secret prisons. It is outside our values and ethical tradition. I have heard such language before, during the Cold War. Anything was justified in the name of stopping Communism, our existential enemy. We tend to define ourselves relative to our enemies. “Terrorism” is our new existential enemy, although a rather ragged and toothless one.

          A person may put great faith and trust in the decision-makers of the Obama Administration. Another person might not. It seems obvious how a precedent for subjective executions might be manipulated and abused. As in the Cold War, the question lingers: Who will watch the Watchers?