Malum in se: Goodby Mr. Geithner!

Malum in se

“He is calm in the face of a storm, and he sees the world as it is, not how we’d like it to be.”
-Treasury Secretary Geithner, as quoted in Bloomberg 7-2-12

“Some men see things as they are and say, ‘Why?’  I dream things that never were and say, ‘Why not?’” 
- Robert Fitzgerald Kennedy, U.S. Attorney General; U.S. Senator

By J.M. Hamilton 7-14-12

This essay may, for some, get a little crude this week, so for those with virgin eyes, you may not want to read further. 

Who am I kidding?  It’s going to be crude! 

You can almost taste it.  One can certainly feel it, and read about it.  It’s invasive.  And it has metastasized throughout the body politic.  It’s called cynicism, or by any other words:  “an attitude of scornful, jaded, negativity.”

I remember the first time I encountered it.  It was 1990.  We were still basking in the warm Republican glow of Reaganomics.  In Texas, the Republican Party had put forth a businessman named “Claytie” Williams, to run against then State Treasurer, Ann Richards.

democrat!  

And, Mr. Williams was about to politically stomp Ms. Richards, big time.  He had a twenty-point lead. 

Republicans were feeling real good. 

Mr. Williams was about to become the second Republican governor in the State of Texas, since the Civil War’s Reconstruction.  Yup.  A carpetbagger was about to enter the governor’s mansion, but at least he was one of ours. 

And then something happened like a bolt out of the blue… revelations!  Turned out Claytie’s tongue would be his undoing; turned out Mr. Williams had a fondness for cynical, dark humor.  Poof, his lead went up in smoke.  He was quoted as saying amongst the “boys,” the following joke:

“Rape is just like the weather…  it’s inevitable, just relax and enjoy it.”

Ms. Richards never looked back and won the governorship.  Republicans shrieked and howled and chewed on their own body parts.  Damn, I was sore.

Now, you have to remember Mr. Williams comment was Pre-Hillary and Pre- P.C. (politically correct), but it displayed – even if in jest – the dark side of American politics and of human nature.   Many of us have watched political cynicism grow and grow ever since, if not at the state level then certainly at the national level. 

Today, the author of our economic recovery, and our economic messiah, if you believe his P.R., Mr. Geithner, was recently quoted in Bloomberg as praising Mr. Draghi, E.U. Central Bank President, and Goldman Sachs Alum, with the aforementioned quote.

Mr. Draghi gets it, per Mr. Geithner, not how the world ought to be, but how it is.  

According to Mr. Geithner, one might infer, how the world should and will be is with Bank Presidents running the planet, impervious to their own malign actions, backed by the full faith and credit on the American taxpayer, and never, ever sanctioned or held accountable for their outrageous behavior; that is to say, no matter how economically debilitating banker fraud to the global economy; the amount of debt the bank bailouts piled upon the taxpayer; and no matter how many bank created hardships face the ever growing ranks of the unemployed.

Per Mr. Geithner, that’s just the way it is:
·      Libor scandals, impacting hundreds of trillions in banking instruments and investments;
·      Derivative and swaps scandals in London, a la Mr. Dimon and “the London Whale;”
·      Alleged Energy market manipulation in California by J.P. Morgan;
·      Accounting shenanigans and off balance sheet transactions;
·      Money laundering;
·      Offshore accounts;
·      Taxpayer funded Banks gambling in Private Equity;
·      Another Futures Dealer vanishes with hundreds of million in client money gone missing (and the banks and the regulators are unaware?);
·      Tax evasion; and
·      Accounts for drug dealers.

What have I missed?  These are just the Headlines for the last thirty days.  This list doesn’t begin to account for the 2008 Banking Armageddon, even though many of these events are redundant.  

Recidivism is the hallmark of this crisis.

And the proceeding list is a direct result of the 2008 actions of the Gang of Four:  Messrs. Bush, Paulson, Bernanke, and Geithner!  This nation should have led the way for the world, and never bailed out the banks, or certainly not without nationalization, penalty and a change in management.

Lost Japanese decades, stagnation, and malaise… this is what Mr. Geithner, the Bank Presidents, and SCOTUS have delivered. 

Somebody should explain to Mr. Geithner that cynicism is not what government is about.  

What Government is about is doing the impossible.  As Mr. Kennedy so eloquently said above, it’s about dreaming things that never were, and saying why not.  It’s about:

Another Texan, President L.B.J., signing Civil Rights legislation;

It’s about President John F. Kennedy setting the nation’s sites on the moon;

President Roosevelt’s efforts and success in defeating National Socialism in Europe;

It’s about President Truman establishing the policy of Communist containment, which allowed President Reagan to ultimately defeat the Soviets;

It’s about President Lincoln signing the emancipation proclamation, and

President Obama demonstrating vision and attempting to steer this country away from the Bankocracy that rules us all, despite the “ball and chain” that is Mr. Geithner.

That’s what government can be about.  It should not be about a personal bailout fund for the Cartel.

By the way, notice how the dreamers and doers above are all Democrats?  Okay, Lincoln would be a Democrat by today’s standards, as the underwriter of the first Federal income tax. Even Reagan was a Democrat before joining the Republican Party.

In the last four years, the U.S. and Europe have suffered a withering shit storm of deception and greed perpetrated upon us all by the banks, and public officials in the banker’s pockets.  

As Mr. Geithner cynically alludes to, the more things change the more they stay the same.  

But Americans and Europeans, by now, know the difference between Malum in se, and Malum prohibitum.  And just because banking atrocities have not been made illegal, because politicians conveniently abdicate responsibility, or feckless regulators refuse to act, doesn’t mean what the bankers are doing to humanity isn’t inherently evil, or enjoys public consent.

Until what the Economist refers to as “banksters” are held accountable, lost careers and prison time, this storm will continue.

At the end of the day, Americans refuse to take Mr. Clayton Williams advice.   We will not sit back and enjoy the rape perpetrated upon us all by the international banking cartel.

P.S.

Mr. Geithner, how much longer do you think the banking dictatorship, and your world and “the way it is” will last???

“Every dictatorship has ultimately strangled in a web of repression it wove for its people, making mistakes that could not be corrected because criticism was prohibited.”

– Robert Fitzgerald Kennedy, U.S. Attorney General; U.S. Senator


 Copyright JM Hamilton Publishing 2013

Tax Arbitrage

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Tax Arbitrage

There are some who legitimately believe businesses should pay no taxes whatsoever…

By J.M. Hamilton  (1-6-13)

Arbitrage is not a force majeure...   and for any CEO or COO worth their salt, arbitrage is like breathing air.  Quite simply arbitrage is finding discrepancies in tax rates, the cost of labor, regulatory law, and exchange rates between sovereigns, and taking advantage of those discrepancies - all other variables being equal - to enhance the corporate bottom line.  Put another way and more specifically, tax arbitrage is like water - always flowing down hill, continuously seeking out the most advantageous (read the lowest) tax rate.  An entire cottage industry of lobbyist, accountants, and lawyers has sprung up seeking out the most advantageous tax rates for their clients.

In order for tax arbitrage to take place it must have a willing partner; and in a democracy that partner is our elected officials, who grant tax concession to free enterprise.  By way of example, the NY Times recently wrote about Texas (in a piece entitled, Lines Blur as Texas Gives Industries a Bonanza, by Louise Story).

Per the Times, Texas offers tax concessions worth $19 billion dollars, per annum, in an effort to create a more business friendly environment and spur job creation; but there's a downside - the state's citizens suffer for want of funds for public education, and a regressive tax code.  Moreover, despite the state's generosity, some question whether or not these tax breaks actually generate benefits to the state and her citizens.  The Times goes on to note, Texas is number three in the nation for the proportion of jobs at or below minimum wage; Texas has the 11th highest poverty rate; Texas balances corporate tax incentives with reductions in public education spending- easily placing Texas in the bottom quartile of per student funding; much of these government giveaways require no reciprocal stipulations, covenants or hiring requirements on the part of corporations receiving the gift from the state. Texas is number 45 in education ranking and consistently produces some of the lowest SAT scores in the nation; Texas also has a very large percentage of the population that is uninsured for medical care.

What's in it for Texas politicians?  Well campaign contributions of course, with many lobbyist ponying up serious cake in return for tax breaks.  This presents Texan pols with a substantial conflict of interest, with significant repercussions, not just for the citizens of the lone star state, but for Americans nationwide, who reside in states competing for businesses and jobs taken up via Texas sized tax breaks.

Per the same Times piece, state and local governments give $80 billion in corporate incentives per annum; of that figure Texas would appear to be giving away 25% of it.

Many would argue Texas politicians are only harming its own citizens, neighboring states, and any states that want to provide quality public education and services for its citizens, by siphoning off business, in some instances jobs, and the resulting tax base.

This would appear to be a road to perdition, whereby wealthy and powerful economic and political interests continuously play one state off upon another; and the parties - who can afford to pay taxes - successfully dodge societal obligations, in exchange for lobbyist fees and campaign contributions.  Or put another way, this is simply tax arbitrage.

It's not just happening at the state level, even the Federal government is in on the action, as noted in this week's WSJ piece - Crony Capitalist Blowout.  Among some of the passages of this article, the following:

"There’s plenty to lament about the capital and income tax hikes, but the bill’s seedier underside is the $40 billion or so in tax payoffs to every crony capitalist and special pleader with a lobbyist worth his million-dollar salary. Congress and the White House want everyone to ignore this corporate-welfare blowout, so allow us to shine a light on the merriment."

And.... "The great joke here is that Washington pretends to want to pass 'comprehensive tax reform,' even as each year it adds more tax giveaways that distort the tax code and keep tax rates higher than they have to be. Even as he praised the bill full of this stuff, Mr. Obama called Tuesday night for 'further reforms to our tax code so that the wealthiest corporations and individuals can’t take advantage of loopholes and deductions that aren’t available to most Americans.'

The costs of all this are far greater than the estimates conjured by the Joint Tax Committee. They include slower economic growth from misallocated capital, lower revenues for the Treasury and thus more pressure to raise rates on everyone, and greater public cynicism that government mainly serves the powerful.

Republicans who are looking for a new populist message have one waiting here, and they could start by repudiating the corporate welfare in this New Year disgrace."

Tax arbitrage is not isolated to the Unites States, it's global.... Great Britain recently noted that its corporate revenues were down substantially at a time of tremendous corporate profitability - with many corporations sitting upon record amounts of cash.

To be fair, not all corporations are looking for tax breaks.  Some corporations and their management teams recognize that paying taxes is important for the long term health and viability of their labor pool, employee morale and welfare, as well as, their markets.  And some CEOs are forced into arbitrage knowing full well that if they don't play the arbitrage game - their competitor will.  Apple has recently indicated that it will bring some manufacturing back to the United States, which is to be applauded; and Apple, one can argue, with their cash reserves, and product demand and mark-up, is well positioned to return manufacturing to the U.S.  For many manufactures, however, the arbitrage choice is less simple.

And it is in this area that government, rather than being a part of the problem, could and can be a positive force for both the business community and society.  States and the Federal government need to work together, that is to say, collude to maximize tax revenue and services for its citizens, while maintaining a business friendly environment.

State and federal governments should naturally seek uniformity in the tax code nationally, so that free enterprise is operating in regions and states for legitimate business reasons.... Not because states are paying them to operate in their state.   Ideally, if a nation, say the United States were to achieve equilibrium/uniformity in taxes, regulation, and living wages across all fifty United States-  business will naturally locate to states and regions closet to their respective markets to save on storage, transportation, and logistical costs.  In short, if the states all agreed on tax policy, there would be no such thing as tax arbitrage within the United States; there would be no race to a revenue bottom lead by pols at the expense of government services; there would be less temptation for politicians to hand out tax breaks, since the paradigm would be turned upside down.

If a single state decided not to voluntarily abide by a uniform tax code/regime, say Texas, pressure could be brought to bear upon that state and the businesses operating in that state, by the contiguous/competing states, or even the Federal government, increasing the sales tax on any Texas produced - or originated- goods and services sold.  Federal funds allocated to the state of Texas could also be withheld, until Texas politicians climbed on board with a homogenous national tax code.

There are some who legitimately believe businesses should pay no taxes whatsoever, or pay lower rates, as long as business or enterprise hires that respective country's citizens; indeed some "socialist" northern European countries have adopted such corporate tax policies (i.e. minimize or lower corporate taxation, while taxing individuals at significantly higher rates).  And that is legitimate discussion that should be held in a public forum with our elected U.S. officials, as opposed to our elected officials making corporate concessions on a one off basis - to say, lure California businesses to the state of Texas; what should not happen - and the very dynamic that is failing this country - are pols making these tax decisions in smoke filled closed door sessions in exchange for campaign contributions, with no caveats or conditions or guarantees that such tax breaks will produce jobs and opportunities in a given state or even within the United States.

Once again, our elected officials are wreaking havoc on state and federal budgets at a time of economic hardship.  And these same pols continue to eviscerate the tax code with local, state and federal budgets running in the red.  Clearly our elected officials need to be reined in - a national tax code for all states would establish a new normal and highlight any politician, who was attempting to game the system for personal gain.  While politicians' coffers grow fat with campaign contributions, the constituency, labor, and markets wither for want of education and services.  Indeed, at the same time pols hand out government largesse to corporations, many of these same pols are seeking substantial cut backs in state services for their constituents.

A balanced and uniform state tax code, identical across all fifty states, is inherently most advantageous for citizens; such a universal code would help prevent the politician led downward spiral of tax cuts for the wealthy, followed by lost revenue and the resulting reductions in government funded education and services.

As mentioned, arbitrage is not limited to U.S. borders... Ultimately if nation states don't want to be played off against one another - they should work towards adopting uniform/global tax, accounting, and regulatory regimes as well, along with similar labor and wage policies over the course of time.

P.S.

Mission accomplished... The NRA can come out of its foxhole now.  With politicians incessantly arguing about the fiscal cliff, and now, the debt ceiling limit - the political news cycle has already pulled away from the travesty and tragedy in Connecticut.  It remains to be seen whether or not congressional leadership will actually govern in 2013, or will congress and the country continue to be hijacked by the Tea Party movement... A movement in rapid decline.

 Copyright JM Hamilton Publishing 2013

A Rusting City

A Rusting City

“I’ve spoken of the shining city all my political life, but I don’t know if I ever quite communicated what I saw when I said it.  But in my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity.  And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here.  That’s how I saw it, and see it still.  And how stands the city on this winter night?  More prosperous, more secure and happier than it was eight years ago…. And she’s still a beacon, still a magnet for all who must have freedom…”   —  Farewell Address to the Nation, January 11, 1989

By J.M. Hamilton 6-30-12

It was a dark and stormy night.   No, let’s start over.

Once upon a time, a very eloquent leader came to be elected to run a tarnished and rusting city.  The city had fallen into disrepair and faced double-digit unemployment, inflation, and interest rates (mostly because the city had been taken off the gold standard by a prior administrator, and the printing presses had been maxed out to gain a mayoral second term).  An index was even created to measure just how bad things had become for the citizens, a “misery index.”   Times were indeed difficult.  The leader was a gifted orator and roused his tribe/Party against government; he talked down government programs, oppressive taxation, and government regulation; and he spoke proudly of the private sector, capitalism, and privatization.

But the wise ruler also was smart enough to remember the great depression, and at one time had actually been a democrat. Oh my!

A Democrat in Wolf’s Clothing?

And yet, there seemed to be a wide divergence between the mayor’s rhetoric and his actual policies.  For despite his strong anti-government language, the leader didn’t have the heart to cut government programs for the elderly.  In fact government spending and entitlements expanded and grew, as did deficit spending; he also protected the city’s workers and jobs from the free trade policy he advocated, with tariffs and barriers to trade; and the renown mayor of the city raised taxes no less than eleven times during his two terms, and yet, the deficits – government spending versus tax revenue – grew and grew.  The top tax rate for the largest wage earners was 50% for much of the great communicator’s terms in office.

Despite the mayor’s policies, the city – possibly by shear force of his charm and persuasion – prospered.   While others saw through the leader’s verbal skills and recognized that he had merely adopted liberal economic policy – held widely in disrepute within the mayor’s Party, commonly known as Keynesian Economics; the leader claimed that the free market, tax cuts, and deregulation had brought the city back and made her shiny again, while failing to acknowledge government’s role (both fiscal and monetary policy) in his and the city’s success.  After eight long years, the mayor retired for well-earned rest and relaxation.  Indeed, he seemingly had done very well.

Except the mayor’s words appeared to have cast an enchanted spell.

The leader was remembered very fondly, and over time his political Party/tribe built a cult of personality around him and his ideology.  The Party remembered with great relish the great communicator’s words, all the while ignoring or wishing away his actions and deeds.  Or attributing the continuing problems of the city — rampant fiscal profligacy and deficit spending — to a failure to cut revenue/taxes.  The Party, which prided itself on its tremendous business acumen, seemingly believed that while no business could spend indefinitely without raising revenue/increasing sales, apparently believed that government was magical and that it could continue to grow and spend indefinitely without raising revenue/taxes.  By sorcery, the Laffer Curve, and supply side economics, the Party of the great leader wished away the government’s deficits but did nothing to stop its “borrow and spend policies.”

What Big Teeth You Have…Grandma

What’s worse the Party ignored their leaders practice – and track record – to avoid foreign entanglements and wars.  Instead, the Party began to fight in foreign lands seemingly endless wars, or battles to protect oil rich cities, all to the great benefit of: trade routes, “managed” energy production, commercial and sovereign interests, and two of the Party’s greatest benefactors, the military industrial complex and Big Oil.  However, these wars cost the city greatly in terms of blood and treasure, and while they caused a short-term boom in her economy, they often left the shiny city winded financially, morally, and martially (for taxes had been not raised to pay for city’s foreign adventures — indeed, they had been cut).  Denizens of the world often wondered why the shiny city, often fought in resource rich lands, protecting the interest’s of dictators and despots, while contrary to the City’s ideal, she often ignored human rights atrocities committed by dictators in lands that were not resource rich or had minimal links to the city’s economy or business interests.  Worse still, when the city was at the apogee of her power, she failed to spread democracy and stability globally; but rather, continued to support military and authoritarian regimes, an opportunity squandered.

And I’ll Huff and I’ll Puff and I’ll Blow Your House Down…

But worst of all, the great communicator’s Party – having completely abandoned the financial rules and regulations put in place after the great depression, such as Glass-Steagall – allowed the city’s banks to gamble and engage in idle speculation, at the expense of the city’s economy and the banks traditional role of lending to the fair city’s citizens and businesses.  A tremendous bubble ensued, and the city’s real estate market came crashing down, and with it a lifetime of accumulated wealth, and the livelihood of a great many of the city’s businesses and inhabitants.  Worse still, it turned out that the city’s banks had bet against the city and her people, and some of the banks very own products, and the banks reaped significant financial reward for their wickedness in the city lead bailout.

Separately the tax code had been turned to Swiss cheese; the Party having been lobbied to create loopholes for the rich and the powerful – and having accepted large political campaign contributions – acquiesced to many demands.  The city’s budget was now ruinous, and she could no longer provide basic services for her people or make good on her financial commitments.  The city’s central banker took to printing money to pay for the city’s massive debts and tax cuts for the rich, the Party had so favored.

In the end, the Party’s and the leader’s free enterprise and anti-government language had become such a cornerstone of their beliefs that businesses and entire sectors of the city’s economy were given free reign and allowed to merge and denigrate into mere monopoly.  The cartels often worked directly at cross-purposes with the city’s consumers, the city’s labor force, her financial health, and the city’s once great markets.  Contrary to the great leader’s policies and actions that helped and aided the city’s workers and her markets, trade barriers were taken down, “free trade” agreements ratified, and many of the city’s jobs were sent offshore – which only made the city’s fiscal crisis worse, so diminished now was the city’s tax base.

Yes, inexpensive products were exported back to the shiny city and her once great markets, but who could afford them, with such high unemployment rates, depressed wage levels, and monopolies preying upon the citizenry for limited discretionary income?

The shiny city and the Party listened to the great communicators words, and ignored his actions at their own peril, and the city fell into disrepair, was over extended fiscally, and the need to print money to pay her bills, and for additional bank bailouts, grew greater.  Over the span of time, and contrary to the Party’s and the leader’s speeches, the shiny city had adopted the liberal economist Keynes’ policies almost to the letter.  Moreover, redistributed wealth was not shared equally for a just and fair society; but rather, it went to the wealthy, often in the form of tax cuts, bailouts, special regulations, inflationary monetary policy, and accounting magic and subsidies.

The city soon grew rusty again, along with her infrastructure, and she was ill prepared for the next calamity to come, because she had squandered her treasure and credit line.

In a final irony, the great leader, along with his city, counted among their many successes their signature achievement – the dismantling of a withering crony empire.  Ultimately, in many ways the shiny city was rapidly becoming the very thing she and her citizens had fought a great cold war against, an empire that was overextended economically, militarily, financially and intellectually.

After a thirty-year reign, the Party and many of the leader’s words became little more than a fairy tale.

For while the free market and capitalism are great producers of wealth, the free market works best when partnered with a strong and healthy government to ameliorate private enterprises worst attributes: that of monopoly, concentration of wealth and power, cronyism, and government and regulatory capture.

The great communicator knew this, and his actions revealed as much, but his rhetoric, almost spell like, had been twisted to a very bad end, indeed.

And the moral of the story:  Watch both the words and actions of actors turned politician.  For while actions speak louder than words, sometimes a leader’s words, unintentionally, may have damaging consequences for future generations.

P.S.

And the mayor’s lasting legacy? The mayor showed us that when the debt to GDP ratio is low, anyone – even a public relations man from General Electric – can kick start an economy by adopting Keynesian fiscal and monetary policy; what takes discipline, foresight and good stewardship is raising taxes during prosperous times.

Ultimately, the mayor’s lasting legacy was his dark words against government turned a generation off on public service, so that the city – all too often – became led by easily manipulated second-string hacks, extremist, and political opportunist.  Subsequently, malaise and lost decades ensued.

The End.

 Copyright JM Hamilton Publishing 2013

HAPPY NEW YEAR!

A VERY HAPPY 2013!

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THE GOP: UNSAFE AT ANY SPEED...

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The GOP: Unsafe at any Speed…

"This is the beginning of a serious conversation. We won't be taking questions today.”  - The National Rifle Association’s president David Keene

By J.M. Hamilton  (12-25-12)

Publishing in 1965, Unsafe At Any Speed documented severe defects in General Motor’s (G.M.) products, especially the Corvair.  The book describes the life threatening defects, and short cuts made by G.M., from roll over potential to deliberately ignoring safety, so as to enhance marketing and the bottom line.  The immediate reaction from Detroit was denial, anger, and finally, acknowledgement and reform; but not before attempting to vilify the author, Mr. Nader, tapping his phone lines, and keeping him under surveillance, et al. 

Like the G.M. in the middle part of the last century, today’s GOP is reactionary to its core, and basically, fighting a guerilla campaign against change and reform.  But more importantly, it seems as though in its extremism that the Republican Party is on nearly the wrong side of every issue.  Moreover, their positions are inherently dangerous to the long term health of the nation, and its citizenry; the Party’s motivation – campaign contributions from wealthy and entrenched interests – are readily transparent.  Let’s run down the issues, shall we:

1)   The GOP’s blind commitment to the NRA and assault weapons is readily on display with the massacre of twenty Connecticut school children, and an ever-growing body count.  The GOP’s response to this atrocity is to hide, hope that it blows over, and ultimately, more guns.

2)   A lack of courage is always on display when the Republican Party fails to stand up to large and dangerous cartels and monopolies, whether its toadying up to Mr. Jamie Dimon, when he appears before a Senate Committee, or continuing special tax breaks for big oil.  Of course, the Wall Street cartel brought down the global economy in 2008, and the Republican Party has fought a rear guard action against financial reform ever since.

3)   “Borrow and Spend,” best defines the GOP’s fiscal polices, from Reagan to its most recent offering, Mr. Romney.  Its deficit spending has left the nation and the Federal government depleted, in hoc, and severely weakened.

4)   The GOP has forsaken the middle class or roughly 98% percent of the nation, and has embraced globalization, private equity, and laissez faire capitalism at the expense of the nation’s economy, business, and her citizens.

5)   At the risk to this nation’s international prestige, the Republican Party has embraced full-scale wars, throughout Middle-East, which were ineptly executed; hence, leaving the nation weakened, while building up yet another terrorist generation in response to same.

6)   The Party purports to support business, but when the nation’s chief executive officers, en masse, tells the GOP to raise revenue, increase taxes, and to work with the President to avert the fiscal cliff – the Party remains intractable and recalcitrant.

7)   Despite a thorough drubbing in the last national election, the GOP only remains strong in an ever-shrinking pool of red states, and in politics within the hinterland, where gerrymandering, rigged local elections, and homogeneous counties are not atypical.  The Party is exclusionary and demographically challenged, and within a generation – and without change - will be marginalized; the Republican Party’s “Southern Strategy” appears to be based upon crypto-racism.

8)   Even in the face of new information, science and facts, the Party is doctrinaire, highly ideological, and does not tolerate deviance in Party orthodoxy (see Peggy Noonan’s recent plea for the Party to embrace and tolerate free thinking in the pages of the W.S.J.).

9)   It claims to be the Party of Judeo Christian heritage, and yet, it rejects the teaching of Christ on a daily basis, and instead embraces an individualistic nihilism.

10) The GOP is not dedicated to the health and well being of the nation, but rather, retribution and removal of its perceived enemy, the Democratic Party.

11) It decries government assistance for those citizens in need, while overseeing corporate welfare on a scale never before imagined.  By allowing entire industries to be outsourced to other nations, or to be consolidated into monopolies and cartels, it has left the nation weakened and dependent upon an elite cadre.  It has caused a Neo-Guilded age.

This is a Party that is consumed with hatred and fear, and as such it is highly dangerous.  It is intolerant of nearly everything and anyone who dares challenge its authority or orthodoxy.  It is brittle, inflexible and in denial.

There appears to be no William F. Buckley on the scene to drive the crazed and the ignorant out of the party’s ranks - no one to stand up to the fanatics.  Today’s GOP reminds me of antebellum southern whites, the majority of whom did not own slaves, who fought for a cause and an aristocracy/plutocracy that was inimical to their own interests.

I don’t know if today’s GOP reminds me more of the early 60’s Corvair, or the Neanderthals.  My guess is Lincoln would disown today’s GOP.  Whatever the case, I’m glad I am no longer affiliated with the Party.

How much longer can a party dedicated purely to its own existence, and to the detriment of its fellow man, endure?  Truly, this is a political party that is unsafe at any speed.  

 Copyright JM Hamilton Publishing 2012

Geronimo

Destiny

“When politics get chaotic, it is always the people who are sacrificed.” — Toyota Motor President – Akio Toyoda

By J.M. Hamilton (11-21-12)

Christmas came early for some of us this year, with the re-election of President Obama and the defeat of the Private Equity candidate, Mr Romney.

That’s not to say, I expect great gifts from Mr. Obama.  I expect my taxes to go up.

No, the gift that we all have been given is a Commander in Chief, who genuinely cares about 100% of us versus a cad who wrote off half the population.  It seems that the GOP can’t stop the hemorrhaging, with Mr. Romney confirming in a conference call to donors that he really thinks Americans were bought off by Mr. Obama.  Mr. Romney, of course, doesn’t feel that when Bain Capital rigs the rules in it’s favor, from looting legitimate businesses to gaming the tax code, both to the detriment of the economy and the fiscal health of the nation, that Private Equity is behaving in a parasitic manner.  Indeed, Mr. Romney, believes his and private equity’s behavior is a paragon of virtue.

Which goes to explain why a party that is bankrupt of new ideas, and is both obstructionist and exclusionary, is in rapid decline.  It’s no accident that the Romney candidacy and Hostess (the makers of Twinkies, Ho Hos, and Ding Dongs) were both brought down by the greed, rapaciousness, and an utter disregard for humanity caused by…. Private Equity ( the most extreme and virulent form of laissez faire capitalism practiced today).  Hostess will come back, thanks undoubtedly to employee self-sacrifice, what remains to be seen is will the GOP make it back?

One hopes the GOP learns, because the DNC, indeed America, is going to need healthy political
competition.

I’ve learned over the years never to gloat in victory because fate can turn events on their head in less than a second.  A friend of mine once celebrated the seeming demise of an arch-competitor during the height of the 2008 financial crisis.  This company was subsequently bailed out and I believe is still partially owned by the Feds to this day.  What this meant for my friend’s industry was said company, who was grounded on the rocks of bankruptcy in Fall 2008, lived again to fight another day, and was able to underprice their products and services in subsequent years, due to the implicit and explicit backstop and support of the Federal government.  Which was neither good for my friend’s  industry or the company he worked for.

So a rare admonishment from me to my readers:  Never gloat in victory, for Fate is always sleeplessly watching and she’s one cruel mistress.  Turn your back on her at your peril.

President Obama doesn’t appear to be turning his back on anyone these days: he’s reached out to labor, CEOs, and the Republican leadership in the house, in an effort to avoid “the fiscal cliff.”  Why both Political Parties should be so eager to do away with legislation they both agreed upon is beyond JMH?  The cuts to defense spending are long over due, and the Bush tax cuts – which have imperiled the financial health of the nation – clearly need to expire.  By way of comparison, the expiration of the Bush Tax cuts would mean a reversion back to the Clinton era tax rates, which if memory serves was not only a time of late 90′s economic prosperity but also a time of federal budgetary surpluses.  And as Mr. Krugman pointed out recently in the Times – the apogee of Republican nostalgia – the 1950′s –  was also a time when the top income tax rate was 91%.

Despite such high tax rates, the world did not end, the 1950′s U.S. economy did not falter, executives and workers still showed up for work every day, and we lived in more economically egalitarian – less economically predatory society (albeit admittedly, in terms of social justice and civil rights the 50′s were a backwater).  Private Equity would have never been permitted by the 1950′s Republican Party.

The House Republican leadership says they have a mandate too, which is laughable when we consider how badly Mr. Romney was defeated – nationally, and how Dems held onto the Senate – again a more nationally oriented democratic body.  The House, on the  other hand, is more representative of smaller regional preferences, local politics, and gerrymandering, and arguably, is not indicative of national trends.  Mr. Obama should not yield to the obstructionist.

Let the sequestration take hold, embrace the sequester, love the sequester.  Be the sequester!  The sequester is our friend.

And if per chance in the new legislative session the GOP leadership wants to demonstrate they are not the plutocratic party, and reduce taxes on the middle class than that would be nice too.  There’s never a provident time for tax increases or fiscal and budgetary sanity. But your humble blogger can assure you – there’s no better time than now.

Mr. Obama’s legacy is now on the line.  Ideally, his second administration will be the start of a return to fiscal sanity, the end of two crippling wars, and of our elected leaders making hard choices for the long term health of the nation, as opposed for the good of wealthy special interests.  Raising taxes is easy, cutting spending is harder, but the truly difficult part of governing is holding rich vendors, special interests, and corporations – who often profit directly or indirectly from their relations with government – accountable.  Many would argue cleaning out the Augean stables of waste, fraud and abuse is what our government, nation, and our economy needs now; but it is something our elected officials are loath to do.

At the end of the day the nation learned two things this election: one, the American people believe government can be a positive force in society; and two, the fairy tale that tax cuts for the wealthy create economic opportunity for all has been rejected and demoted to the ash heap of history (hence, GOP efforts to quash a congressional research service report, which told us that tax cuts for the rich do NOT create jobs).  This means the party that governs the most efficiently and effectively, to the benefit of the most constituents, wins.  Republicans take note.  Governing is not about “free stuff;” it’s about human dignity, leveling the playing field, and increasing the odds of success for many!

Do you hear that?  That’s the sound of Destiny calling…  Fate’s twin sister.

 Copyright JM Hamilton Publishing 2012

The NRA didn’t create “scorched earth tactics,” they just reinvented and honed them to a sharp point.

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Uncertainty

By J.M. Hamilton 7-28-12 

“In this world nothing can be said to be certain, except death and taxes.” - Benjamin Franklin

“We have met the enemy and he is us.” – Walt Kelly – Pogo

I think it was my father who got me hooked on the Sunday morning political talk shows… if memory serves one was This Week, with David Brinkley.  Loved that guy: urbane, sharp as a razor, and did not suffer fools gladly.  Face the Nation fell in there somewhere and then I usually turned over to PBS and Firing Line.  Hosted by God’s gift to the Republican Party, William F. Buckley, Firing Line was my favorite.  Alas, Buckley and Firing Line are no more.

If we tune into these shows now, perhaps as it always was, the discussion is on the topical and heated political issues of the day.  However, what one notices almost immediately is that there is barely any mention of the financial connections to our elected leaders and their corporate sponsors.  Most of the major networks, of course, are run by huge corporate conglomerates, and the owners and sponsors of these shows are all safely ensconced in the Corporate Hall of Fame. 

Nothing wrong with any of this, but one can’t help wonder does all that corporate money put a crimp in the Sunday morning dialogue, and cloud where this country’s locus of power truly lies?  The talking heads give lofty declamation about Washington D.C., but you hear nary a word about Cupertino, CA and even less so about Fairfield, CT or Decatur, IL.  And none of the pundits mentions the Caymans or Luxembourg.

Why is that?

Republicans have been waging war against the Obama administration ever since the President came into office, saying that his brand of rule creates too “uncertain” an environment for America’s business leaders, and as if on cue, the Chamber of Commerce echoes those sentiments frequently and often (or is it the other way around?).  Many Captains of Industry have seen their balance sheets rise with expanding cash holdings, enjoyed highly inexpensive debt financing courtesy of the Federal Reserve, and a stock market recovery — all under this administration.  Moreover, taxes have not increased under the Obama administration, and in fact, government nationally has shrank. 

All of which probably makes this presidency either the most pro-business Democratic administration ever to enter the White House, or the President has merely switched parties and forgotten to tell the American people.

To read more on the political conservatism of the current administration read, The Ultimate GOP Candidate has yet to Step Forward:

So what exactly is there to be uncertain about? It’s as if the enfant terrible, with its sextillions flowing in from Wall Street banks and corporate donors, had its “lolly” taken away (after calling the shots since President Reagan’s inauguration, nearly a thirty-plus year GOP run).   

Might it be time for the Party to “man up” a little bit?  Might it be time for the Republican controlled House to stop the temper tantrum and assume some responsibility for governing?  How many times can the house GOP engage in political masturbation and vote down President Obama’s healthcare legislation?

As Mr. Franklin told us long ago, wisely and sagely, the only thing certain in this world is death and taxes.  However, I guess if you’re like a handful of CEOs, and Republicans have been sucking on your knee caps for the last thirty years, and you have been told by the Party that your every utterance is a divine right, well then this Administration might appear scary. 

Of course, it’s the Republican Party, and some of their sponsors, who: led the charge over the last thirty years in dismantling capitalism’s rules and regulations; allowed jobs – and American corporate top line growth – to be exported off shore, via free trade agreements; and as the political voice of the Wall Street banks – directly contributed to the uncertainty created for all, businesses and citizens alike, with the past, present and future financial crisis.

Read a recent piece, Malum in se, to learn just how much uncertainty the Republican Party and the Banks have created.

The uncertainty isn’t created by this administration, but rather, it is created by an elite cadre of monopolist, banking, and shadow banking interests, often with interlocking boards — and the politicians and the Republican Party who are sponsored by same.  We’ve seen, daily, that when the Cartel pursues their inalienable right to the profit motive, it has far reaching consequences for America and the world.  Seemingly, these monolithic interests can no longer play in the house without smashing ma’s furniture.

Once again, many of the oligarchy sponsor, own, or own stock in the organizations that control the Sunday morning talk shows and the major news organizations.  Might that be impacting the Sunday morning message?  After all, it would not be good to hear the Sunday pundits discussing the nexus between the real economic and political power in this country, and the law making men and women who reside in the nation’s capital.  That might prove upsetting to many, and fly in the face, to some degree, with the belief that the power in this country rests with people and less so with the plutocracy.

And can you blame the one percent?

After all, life and business are uncertain enough without having Aunt Bessie, in Beaverton, Oregon, attempting to contact Mr. Lloyd Blankfein because her cat is up the tree.

Still, one can wish for the day when This Week is hosted by Mr. Tom Keene, and at the roundtable sits the CEOs, Messrs. Dimon, Cook, and Immelt, and of course, Ms. Woertz.  As informed citizens we should know a great deal more about what the Titans are thinking.  Should we not?

P.S. 

The GOP has been intransigent for some time now, and one might argue learned their favorite political tactic from none other than the NRA.  Yes, the NRA – who perfected in the modern era the political strategy of “scorched earth” or absolutism.  That is one must never yield any ground to the opposition and must continuously move forward on the offensive, no matter how detrimental to society at large.

The NRA didn’t create “scorched earth tactics,” they just reinvented and honed them to a sharp point.  “Scorched earth” has been around for centuries, and as often as not, it is the preferred tool of despots and dictators the world over.

The strategy has its pitfalls… witness the recent number of dictators who have had a falling out with their citizens, and have seen their kingdoms turned up side down.  

If only they had opened up the dialogue, allowed the safety valve of descent and freedom of speech? 

If only they had on occasion compromised?  If only they had abandoned absolutism in favor of democratic reform!

They still might be in power. 

As of late, the catalyst, the spark, for many a dictator’s fall was rising food prices.  

 Copyright JM Hamilton Publishing 2012