When talking to students, I often like to use a visual from the movie "Wall Street". Remember Michael Douglas as Gordon Gekko? In the movie he's talking on a cell phone; a Motorola cinder block, that when adjusted for inflation, cost about $10,000 and about $1,000 a month to operate with 30 minutes of talk time. You couldn't give the thing away.
So I ask students to pull out their phones and show me what's in their pocket. They've got iPhones, Droids and whatnot. Rich kids, middle class kids, working class kids, they pretty much all have cell phones. Some have nicer ones; some less nice ones. Compare what you have in your pocket to what Michael Douglas had in that movie 25 years ago – and you had to be a millionaire to have that. Now everybody has one.
This thing has gotten better and cheaper, better and cheaper, better and cheaper. Now what do your schools look like? You can see the little light bulbs coming on over their heads. If you can figure out why your cell phone has gotten so much better and so much cheaper over time but your school still looks like something that was from the 1950s, 1960s – or in many cases the 1930s – then you'll have an idea about why this system doesn't work.
The problem with education is that we are a country of 300 plus million people. We are an extraordinarily diverse and complex country with an extraordinarily diverse and complex economy. We've got basically one model of K-12 education that comes from 19th century Prussia and Otto von Bismark. It’s a kind of factory model of education where the students are widgets and the schools are factories; they turn them out and they fit into various places in the economy. That is not a model for the 21st century.
The question isn't what kind of system to we replace our current education system with, it is what kind of systems, plural, do we replace it with.
Profit can act as a catalyst for advancement and is not necessarily evil. As with most things, in and of itself, it is morally benign. Much like a gun, profits can be used for good or evil.
Here is a crazy and bold prediction: à la the 1994 government shutdown, no matter what happens with regard to the "fiscal cliff", the GOP will get the blame. Just as the right was fingered as the culprit for the housing bust even while they were sounding the alarm about the need for more regulation of Fannie Mae and Freddie Mac, so too they will be blamed for any detrimental effects of the fiscal cliff. Republican options for dealing with this issue include:
stay true to their values and pledges of smaller government and lower taxes;
just vote "present" and let the Dems march forward unresisted;
leave DC and hole up at the Best Western Clock Tower Resort in Rockford, Illinois;
But, it doesn't matter what the GOP does short of registering as Democrats and feeding grapes to Nancy Pelosi, they will be castigated by the Dominant Liberal Establishment Mass Media (DLEMM) and those on the left as obstructionist and intransigent.
And this will happen even though the left boldly proclaims their intransigence on a daily basis:
Before the election, Harry Reid said, "Mitt Romney's fantasy that Senate Democrats will work with him to pass his 'severely conservative' agenda is laughable."
Harkin and Rockefeller asked Obama to "reject changes to Medicare, Medicaid and Social Security that would cut benefits"
Durbin, the Senate Majority Whip, said in a speech that under no circumstance would there be any entitlement reform.
Krugman says, "Mr. Obama should hang tough, declaring himself willing, if necessary, to hold his ground even at the cost of letting his opponents inflict damage on a still shaky economy. And this is definitely no time to negotiate a 'grand bargain' on the budget that snatches defeat from the jaws of victory. So stand your ground, Mr. President, and don't give in to threats. No deal is better than a bad deal."
A pundit opines, "The president can win, without doing anything. He does not have to give an inch. Not an inch!"
Are these the voices of bipartisanship and compromise?
The left sets up a situation where "negotiation" means something like 'You can choose any color you like as long as it is blue," and then accuses the right of stonewalling if they desire any color other than the shade of blue that the Dems are promoting. They are all for compromise so long as it is the GOP that does the compromising.
However, If the GOP compromises here - and by compromise I mean choosing the preselected, preauthorized positions of the left that are not open to compromise - they will just be yielding more ground to the all-encompassing entitlement state and will be part of the problem. They will fix nothing and only slightly mitigate the slowing economy, higher taxes on everyone and increased debt. But worst of all, if there is even a trace of GOP DNA on the deal - GOP good intentions notwithstanding - the DLEMM and the left will pin all negative outcomes on the right and the GOP will bear the political consequences of failed policies no matter who authored them (e.g., housing bubble).
Since most agree that we are approaching the cliff at a high rate of speed, the GOP should let the left own the 'solution'. Many on the right argue against this because of the inevitable destruction resulting from leftist policies. But since our Thelma and Louise moment is nigh, will nudging the wheel so that we enter the atmosphere at an angle somewhat less than 90 degrees change the outcome? Will insisting that the windows remain rolled up before we sail off the cliff make the car any more drivable once we reacquaint ourselves with terra firma?
How could the GOP let the Dems own the solution? First, the GOP should set forth details about what they would do if they had control of all three branches. Second, they should propose Obama's own budget and tax plan with a nice acronym like AIRBORN, or FORWARD and vote "present". Lastly, the GOP should then let the Dems propose anything they like and vote "present".
The first move would establish a benchmark.
The second would, as much as possible, remove the ability of the DLEMM and the left (but I repeat myself) to blame and demagogue the right's attempts to inject sanity. And there is little likelihood of passage since Obama's plans have gone down in flames before.
The last move would allow the Dems to wholly own the solution by letting them propose solutions without resistance. By removing the resistance, the Democrats would be forced to realistically deal with their own proposals. It is very likely that without a great Satan to battle against, the Dems would self-moderate rather than relying on the GOP to provide the moderation for them (as well as a scapegoat) and come to rest on something like Simpson/Bowles. A self moderated outcome may share many aspects with the Republican benchmark and the GOP could enjoy an 'I told you so' moment. But even if the Dems don't moderate their extreme positions, by voting "present" on anything the Dems propose the right gets absolution - not from the DLEMM or the left, but from their base and their conscience.
GOP moderation and compromise only serves to prolong the inevitable. Just as Democrats often stand in opposition to and protest against economic reality, we may be at the point where Republicans are standing in defiance of Schumpeter's reality, and they should, if reluctantly, step aside and allow creative destruction to do its work.
Government grew massively under President Bush. He was a bigger spender than any previous president going back to Lyndon Johnson. He massively expanded entitlements, grew food-stamp enrollment (almost as much as Obama did) and nearly doubled “investments” in education. He created a new Cabinet agency -- Homeland Security -- and signed into law sweeping new regulations, like No Child Left Behind, Sarbanes-Oxley, and McCain-Feingold.
This, according to Democrats, amounts to telling Americans “you’re on your own.”
Millions of illegal immigrants are getting a bigger tax refund than you. Eyewitness News shows a massive tax loophole that provides billions of dollars in tax credits to undocumented workers and, in many cases, people who have never stepped foot in the United States. And you are paying for it!
And there probably isn't any voter fraud either. Oh, wait...
If I'm hearing Ed correctly, and I think I am, he likes the phrase "grease the skids." Yes Mr. Johnston, that's what the GOP wants. "Take it from the working people, and the poor and the disabled and the children so the rich can have more. And then everything will be great." I think he left out the elderly, women, blacks, Hispanics, babies and cute bunnies. Johnston really missed an opportunity to hit that one out of the park.
This is reminiscent of how the left generally treats the right. It is like when Howard Dean said: "Our moral values, in contradistinction to the Republicans', is we don't think kids ought to go to bed hungry at night." Yes. Republicans want children to go hungry.
Can we put on our big boy pants and discuss issues without demonizing everyone who isn't on the show? Mysteriously, no talk about how working people, the poor, the children, the disabled, the elderly, the babies and bunnies will pay down the debt racked up by this generation. Any concern about the disabled in that regard?
Go ahead, stick it to the "rich". Take everything they have. Unfortunately, you could take everything and it wouldn't come close to solving the problem. See why.
If the territorial tax is a dodge, then let's get rid of it. Although how is this much different than how Hollywood (just one example) conducts business by going where the taxes and wages are lower to make movies. The left does not practice what they preach. If they preached what they practice, they would be conservatives.
The piece of this puzzle that Schultz and Johnston cannot reshape is that businesses will gravitate to states/countries that are the most business friendly. You would do the same thing. Unmentioned is that higher energy and tax rates will push companies overseas too. Will Schultz hammer the left about their energy and tax policies driving jobs overseas? (No answer needed. It was a rhetorical question.)
But hey, at least Ryan and the Republicans have offered a plan. It is a little odd that Schultz and Johnston aren't as concerned that a budget hasn't been passed for 1097 days even though it is against the law not to. And every Obama budget has been a voting blow out. Dems won't even vote for it. 414-0 on the last go-round. Why do you suppose that is? The President is a pretty smart guy. He should be able to propose something that at least one Dem would like.
But the GOP will get blamed for not reaching across the aisle - partisan politics and all that. Even while Dems refuse to vote for the Obama plan and then don't pass something of their own. As for the Obama budget - heretofore the only response to the Ryan budget - Mark Steyn sums it up thusly:
Have you seen the official White House version of what the New York Times headline writers call “A Responsible Budget”? My favorite bit is Chart 5-1 on page 58 of their 500-page appendix on “Analytical Perspectives.” This is entitled “Publicly Held Debt Under 2013 Budget Policy Projections.” It’s a straight line going straight up before disappearing off the top right-hand corner of the graph in the year 2084 and continuing northeast straight through your eye socket, out the back of your skull, and zooming up to rendezvous with Newt’s space colony on the moon circa 2100. Just to emphasize, this isn’t the doom-laden dystopian fancy of a right-wing apocalyptic loon like me; it’s the official Oval Office version of where America’s headed. In the New York Times–approved “responsible budget” there is no attempt even to pretend to bend the debt curve into something approaching reentry with reality.
As for us doom-mongers, at the House Budget Committee on Thursday, Chairman Paul Ryan produced another chart, this time from the Congressional Budget Office, with an even steeper straight line showing debt rising to 900 percent of GDP and rocketing off the graph circa 2075. America’s treasury secretary, Timmy Geithner the TurboTax Kid, thought the chart would have been even more hilarious if they’d run the numbers into the next millennium: “You could have taken it out to 3000 or to 4000” he chortled, to supportive titters from his aides. Has total societal collapse ever been such a non-stop laugh riot?
“Yeah, right.” replied Ryan. “We cut it off at the end of the century because the economy, according to the CBO, shuts down in 2027 on this path.”
The Ryan budget is demonized because it focuses on reductions in spending. Any sensible person knows that spending must be controlled in their own budget at home. However, even the supposedly horrific poor/children/disabled/bunny crushing Ryan plan doesn't "cut" spending - it increases it. From the Fiscal Times:
Neither President Obama nor Paul Ryan actually cuts government spending. Rather, both are playing the time-honored game of calling a reduction in the rate of increase a “cut.” Thus, the president would increase federal spending from $3.8 trillion in 2013 to $5.82 trillion in 2022. That might not be as big an increase there might otherwise be, but in no way can it be called a cut. Meanwhile, Ryan, who is being accused of “thinly veiled Social Darwinism,” would actually increase spending from $3.53 trillion in 2013 to $4.88 trillion in 2022.
The president warns that Ryan’s spending “cuts” would “gut” the social safety net. And, it is true that Ryan’s budget knife falls more heavily on domestic discretionary spending than does the president’s – but only relatively. Over the next 10 years, Ryan would spend $352 billion less on those programs than would Obama, an average of just $35.2 billion per year in additional cuts. Given that domestic discretionary spending under the president’s budget will total more than $4 trillion over the next decade, Ryan’s cuts look less than draconian.
$35.2 billion per year. That's only about 2.6% of the current annual deficit. Ryan's budget would have to cut another 38 times as much to even stop the deficit spending. It would be as if you were told that on your $50k income this year, you would only go in debt $24,500 instead of $25,000. Ryan deserves all that opprobrium for proposing a draconian horror show of that magnitude, don't you think?
Both the Democratic option and the Republican options are on the spend more side of the equation. Ryan just spends 'less' more than Obama. But the GOP is painted as raping, pillaging and burning.
No cutting. Not extreme. Not Robin Hood in reverse. (Although a good case could be made that Dems are actually Robin Hood in reverse since Robin Hood took what was taken by the tax collector and gave the people their own money back. Remember Friar Tuck's exclamation: "Praise the Lord and pass the tax rebate!") God only knows what Republicans would be called if they actually proposed austerity measures and cuts in spending (instead of slower increases).
This all boils down to the different visions of the left and the right. One is unconstrained, redistributive and egalitarian and the other is constrained and libertarian. Neither is perfect. Each has its downside. It is unlikely that proselytizing will change one or the other's mind so the best we can do is strive for clarity. Clarity before agreement.
But maybe a consumption tax could fix this. End all prebates, rebates, exceptions, loopholes and deductions. Just pay a tax on everything that isn't food or utilities. Then those who earn and spend more will pay more. Although they currently pay the majority of tax anyway, so it is hard to imagine they could pay any more of the "fair share".
I am not sure that a GOP campaign ad writer could have come up with a better way to communicate the left's idea of Keynesian intervention in the economy. The Onion may have been able to come close.But U.S. Labor Secretary Hilda Solis did it better than any of them could have.
Failing to extend the length of time that unemployment workers are eligible to receive federal unemployment payments “will mean an increase in the unemployment rate.”
Before you do damage to your scalp trying to figure out if this makes sense, rest assured it is true. Just as no longer borrowing or printing money to pay people's grocery bill increases hunger, and no longer borrowing or printing money to pay people's car loans increases immobility, and no longer borrowing or printing money to pay people's house loans increases homelessness.
A finer example of a tautology you will not find.
The argument rests on unilateral demand side thinking. If the demand is not maintained by giving people money that is either borrowed or printed, the businesses who sell goods and services will go out of business. If this works so well, why not just print money and send a pallet to each and every person in the US? Wouldn't this sort of stimulus expand the economy and create tremendous demand?
Ugh. Yes, an increase in borrowing can be a stimulus to demand. But at what cost? Is there a limit to how much borrowing can occur before the debt is overwhelming? Is this wise
Alan Greenspan had this to say on Meet the Press when asked "Are U.S. treasury bonds still safe to invest in?":
This is not an issue of credit rating, the United States can pay any debt it has because we can always print money to do that. So, there is zero probability of default.
This is about destoying. Isn't about reducing the deficit. It's about destroying the public space. It's about destroying public in... federal involvement in education. It’s about clean air, clean water, food safety, public safety. You name it, they’re there to diminish it. Destroy it.
The voting in the House of Representatives went as follows:
Voting yes were 95 Democrats and 174 Republicans.
Voting no were 95 Democrats and 66 Republicans.
Why isn't Rep. Pelosi accusing the half of the House Democrats that voted against the bill with the same destructive outcomes? No matter what the motive of the Democrats who did not vote for it, the result would have been the same. So are the 95 Democrats that did not vote for the bill against clean water, food safety and public safety? Can they be said to have voted in favor of default?
What is happening in Washington is nothing less than a culture war. On President Obama's side are supporters of a national concept, like one known in Europe, namely that the state should take care of a certain amount of social equalizing, and if necessary, intervene with regulations. For his opposition, even Obama's idea of expanding health insurance coverage equals the birth of communist totalitarianism.
Anyone who raises taxes or increases the debt ceiling, and therefore unleashes the Leviathan of 'big government,' is, according to their logic, threatening the highest ideal that the American revolutionaries fought for: freedom. Those who do it will be pursued by these self-named patriots with virtually pathological hatred, even when the infrastructure or social benefits would profit from their undertakings. Illogical? Patriotism is possibly the only thing that many uncertain American citizens have left. The crisis has not only cost them their jobs; it has also threatened their country's hegemony. And a solution for none of these problems seems apparent.
The business daily Handelsblatt writes:
Obama .... will have a much harder time than in prior elections because he'd convinced his supporters that he would end the divide in America. But he's failed to prove that he can really achieve that. 'No, he can't' should be the conclusion of disappointed voters.
The Financial Times Deutschland writes:
The debt burden per person is, in the end, almost as high as in Greece.
I was angry about this vote because of the process, the process of bringing our country right up to a default and scaring seniors and making our active military worry they may not get a paycheck. In terms of the ultimate agreement, it's a strong fiscal plan. It goes out 10 years and puts a real framework on managing our expenses. I would have liked revenue as part of the plan, but that wasn't meant to be.
So who exactly was he mad at?
Not raising the debt limit does not necessarily mean a default. President Obama's Treasury Secretary would have to make that happen. (Sen. Pat Toomey's article on this.)
It was the President who was the one who threatened those on Social Security with withholding their checks.
And as for it being a "real framework on managing our expenses," apparently not so much:
U.S. debt shot up $239 billion on Tuesday — the largest one-day bump in history — as the government flexed the new borrowing room it earned in this week’s debt-limit increase deal.
That increase puts the government already remarkably close to the new debt limit of $14.694, which means one day’s new borrowing ate up 60 percent of the $400 billion in space Congress granted the president this week.
There is a lot of discussion about how the Tea Party Republicans are intransigent and are unwilling to compromise during the debt ceiling debate. Nanci Pelosi said that Democrats "were forced into something in order to raise the debt ceiling." Apparently they were reluctant to compromise too.
Of course people want as little compromise as possible. They have ideals, beliefs values and visions that differ. And to the extent that they compromise their beliefs they are sacrificing their values. (This isn't to say we shouldn't compromise. Just that compromise comes at a price.)
This is true for Democrats and Republicans. Democrats want to give up as little ground as possible just as Republicans do. Democrats are as unwilling to negotiate away their beliefs as Republicans. Would Rep. Pelosi feel uncomfortable negotiating away key elements that she thought were vital and important? We know the answer because of her past record and acknowledging that there are "bitter pills" in the bill. But is she asking the other side to set aside their beliefs without putting up resistance?
Also, agreeing that it is a "Satan sandwich" indicates her lack of desire to vote for this bill and her desire to not have to compromise her beliefs.
It probably is, with some Satan fries on the side.
The fact that we are here today to debate raising America ’s debt limit is a sign of leadership failure. It is a sign that the US Government can not pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. Increasing America ’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.
Sen. Obama, Congressional Record, S.2237-8, 3/16/06
Both President Obama and Harry Reid now state that their past positions on the debt ceiling were merely political stunts.
I think that it's important to understand the vantage point of a Senator versus the vantage point of a...President.
As President, you start realizing, "You know what? We-- we can't play around with this stuff. This is the full faith in credit of the United States." And so that was just a example of a new Senator, you know, making what is a political vote as opposed to doing what was important for the country.
Was it OK to "play around" with the full faith in credit as a Senator? Does he now think an apology to the former President and the American people is in order?
