Biggest lie in politics right now: Millionaires and billionaires are job creators.

Biggest lie in politics right now:  Millionaires and billionaires are job creators.

The Truth: You and I making less than $100K are the job creators because we create jobs by spending almost all (if not all) the money we take home.  There is no job creation unless there is a demand for product.

A $5000 tax cut to a millionaire does not create more product demand.  Millionaires already have more than enough money to spend.  But if I get $300 extra in cash, every cent of it leaves my possession.  Some of it will go to the Kowalski family, some of it will go to Target, some of it will go to my church, some of it might go to Best Buy, maybe a movie theater and local restaurant.  All of it is profit to the location I deliver it.

$5000 in tax cuts to a millionaire or billionaire is nothing more than additional profit and investment cash.  A tax cut for the wealthy does not create more demand.  You and I having cash in our pockets to spend creates product demand.  You and I having cash in our pockets to spend creates jobs.  You and I are the job creators.

The Richest Americans vs. The American Dream for the Rest of Us

It was about a year ago that Michelle Bachmann said we’re running out of Rich people in America.  I remember the quote, but I don’t remember the context.  It had something to do with President Obama, but I refuse to spend my time looking up why Michelle Bachmann said anything. 

Is it true?  Are we really running out of “rich” people, or is there just less opportunity in this country to get rich.  For the past 30 years, we have been told that the rich make the country successful, “they create jobs!”  So we’ve cut taxes, we’ve allowed tax loopholes to stay, eliminated tariffs, bent over backwards to make concessions to the rich and corporations, and what have we gotten in return? A poverty rate that has only increased since the 1970s.  Shouldn’t there be more rich people by now?  Bill Maher and Michael Moore have thrown out the statistic that the Forbes 400 richest Americans have more wealth than the bottom 50% of the United States population.  In pure numbers, that means 400 people have more than 155 MILLION Americans. 

Do you think that is sustainable?  I would not be shocked at the possibility of a revolution during my lifetime if we continue to move toward a society of financial extremes in wealth and poverty.  It might not be called a socialist or communist revolution, but it would fit into that category.  It would be a class war.  Historically, revolutions occur when the basic needs of people are not being met, or when basic rights are being trampled by the government.  I’m not sure we don’t have both of those right now in some cases.  

But when a statement like that is made, you can hear right-wing talking heads bring up that the left is trying to foment class-war.  Maybe a little class awareness at least would be a good thing.  The median income in America is $48,000.  Of those 155 million Americans who make less than $48,000, I have a feeling that they have felt the biggest brunt of the negative economic and political decisions that have been made to benefit the richest Americans.  A vast majority of people making under $48,000 didn’t gain because of the mortgage bubble, the energy bubble, the hi-tech bubble or whatever bubble.  No, more often they were hurt by the outcomes of the decisions and policies made to benefit the richest Americans.  How many Minnesotans have lost their jobs or are at risk of losing their house because of the greed of the richest Americans. 

These richest Americans are responsible for many of our problems.  I’m not discounting the fact that many people work because of these Americans, but without them, the services, items or whatever would still be needed and provided by many others making a great living.  Anyway, who thinks most of the richest of the rich didn’t gain their wealth without taking advantage of somebody else?  Even with all the good things Bill Gates has done or intends to do with his fortune, his fortune was built to its prestigious level with collusion and ruthless anticompetitive practices.  And while the richest may not always break laws to get rich like Madoff, Hecker, Lay, Skilling, Petters, or whoever, it is hard to justify paying less than a living wage, either in America or overseas, when the owner, CEO or shareholders earn billions.  In my mind it is criminal that companies like 3M, Exxon, Apple, Massey, Cargill and even the company that supported my family, Ford, take shortcuts to save money risking the health and future of workers, consumers and communities. 

So what do we do?  Give up hope?  Retreat to our television or following Charlie Sheen instead of turning this around before it is too late?  There are those of us that still want the American Dream, an ideal that we are all richer when everyone has the opportunity to be successful.  Thomas Jefferson wrote:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

Great words, and isn’t that the American Dream?  Everybody should have the same opportunity to be successful.  But I’m not sure that is the case.  I’m not sure that a government that continues to stress that the freedoms of those 400 richest Americans are more important than the interests of 155 million Americans or more is truly moving us toward the American dream.  I’m not sure a government that eliminates rights and freedoms is even American, in the true sense of what it means to be American. 

Political outcomes during the rest of this decade could be the watershed for our future.  Franklin Roosevelt prevented revolution during a crisis eight decades ago by compromising despite his personally held economic beliefs.  Based on what is going on across the country in Republican politics, I’m concerned that the only way today’s Republicans  would compromise is by giving in to the desires of the richest Americans even if that means deception and violence.  What’s next after that, but full blown revolution? 

“We have this fantasy that our interest and the interest of the super rich are the same. Like somehow the rich will eventually get so full that they’ll explode and the candy will rain down on the rest of us like they are some kind of piñata of benevolence. But here is the thing about a piñata, it doesn’t open on its own, you have to beat it with a stick.”  — Bill Maher

Churches Cannot Bear the Brunt of the Government Budget Gap

There are gaping holes opening up in our social safety net as government budgets are being cut.  Right now, there are people working everyday and doing what they are supposed to do, but tomorrow an unexpected event like a layoff, a car accident, or even a major car repair, can force uncertainty in their ability to care for and keep their family safe.

And while politicians discuss where to cut and who deserves or doesn’t deserve what, there are some politicians calling for churches and charities to fill in the gaps they intend to create.  There are even illogical politicians who feel government safety nets should be cut altogether and that churches should replace the government providing these services. 

But churches are not in a position to do that.  True, there are churches stepping up to do it, and there are volunteers eager to help.  Our aunt’s church, Gloria Dei in St. Paul, was one of the churches featured in a recent Dan Olson story on MPR.  Gloria Dei is one of 34 churches and synagogues helping to house homeless people that cannot get into the county shelters that fill up every night.

Many churches, like Gloria Dei are already filling in the gap.  They already do what they can.  The tiny congregation of River of Joy Lutheran Church in the Spring Lake/Prior Lake area feeds 100+ people a homemade community meal once a month in Shakopee, and this month is upping the giving by handing out small gifts to as many of the attendees as they can.

A warm and safe place to sleep, a healthy hot meal and a gift of groceries can have a tremendous impact for a family fighting poverty, but churches cannot bear the brunt of the government budget gap.  The percentage of personal income given to churches has declined to a lower point than the first years of the Great Depression.  There are fewer attending church, and fewer seeing churches as the primary place for giving.  In the not too distant past, most, if not all charitable donations were given to the church, now there are thousands of charities competing for donations.

While churches like Gloria Dei, River of Joy and hundreds of others are working everyday to fill in the gaps, churches have not solved the problem.  The problem isn’t that churches aren’t doing everything they can, because they are.  The problem is that we still have a huge number of people in poverty.  We have a huge number of people who live paycheck to paycheck.  We have a huge number of people who are unemployed.  And it isn’t a matter of choice.  It is the nature of our society. 

In the name of capitalism we say a business can only pay a minimal salary, and at the same time we say an individual working in a job that keeps them below the poverty line doesn’t need to work that job if they don’t want to.  It is misrepresented as individual responsibility, but somebody needs to work that job.  At the same time we say people don’t need to work a job that pays too little, we also say that business needs somebody to be paid too little.  How do we resolve that issue?

We can’t resolve that without changing our way of thinking and living.  Until we begin investing in education, healthcare and infrastructure, and begin discounting the importance of being wealthy by taking advantage of others fortune, there will always be a place for church aid, government aid and individual aid.  When we all join these churches and start living by Jesus’ Golden Rule, we won’t need government aid, but until then we will destroy the fabric of our society if we eliminate it.

Why do the poor and middle-class have to tighten their belts when the rich caused this financial mess?

Republicans won in 2010 because they talked about fiscal issues.  After decades of hearing the Republican mantra of cut taxes and cut spending, voters bought it again.  It was fiscal this, tighten belts that, budget this, control spending that. 
 
I just don’t understand how people bought it.  Who is controlling the Republican Party?  Corporate special interests, the Chamber of Commerce, and CEOs.  The same people who wiped out our economy because of their own greed.  Voters are so brainwashed by the corporate media that they don’t pay attention that Republicans in the 80s pushed our debt over a trillion dollars, and Republicans in the 2000s eliminated our budget surplus and pushed the debt over 10 trillion dollars.
 
So when a Republican says government needs to tighten its belt, voters say yeah, and ignore the history and hypocrisy in that statement.  When a Republican candidate says we need to cut spending, without saying how, voters say yeah and ignore the fact that we cannot cut our way to greatness.
 
And while Republican politicians are demanding we tighten our belts and eliminate the deficit with spending cuts and tax cuts, corporate executives are licking their chops at the profits they can make now that their Chamber of Commerce funded politicians can fight for their “well-deserved” profits.   While the middle class pays, loses services, and struggles to get by, Republican political funders can plan for how to invest the tax giveaways the Republican politicians want to give them. 

Why do the poor and middle-class have to absorb the largest cuts to their schools, cities and counties, when the economic failures of our society and the causes of this budget deficit reside almost entirely in the actions of the richest and greediest Minnesotans and Americans who took advantage of our society to earn money they did not deserve.  Shouldn’t the group that caused the problem pay more to solve it? 
 
Why do Republican politicians think that a family making $50,000 and a family making $250,000 have the same challenges when it comes to what is cut?  How will a cut in education lead to anything other than less quality?  How will a cut in funding for road construction lead to anything other than more potholes and more costly repairs because of those potholes.  How will another cut in funding of social services lead to anything other than more failure, more crime, more abuse, and more deaths.  How will eliminating a chance at life do anything other than perpetuate generational poverty?
 
When FDR was elected in 1932, he was a hard core capitalist, but he saw the likelihood of class warfare on the horizon and made changes in his plans to work toward solving the causes of the nation’s problems.  FDR is the reason we are not a quasi-socialist state like most European countries.  So what will the Republicans do, push us to sharper class differences and to eventual class conflicts, or head the lessons of history and realize a slogan like “cut taxes-cut spending” can get you elected, but in the end it won’t create results the majority of voters are comfortable with.  Keep in mind that half the families in the state make under $57,000.  They will get almost no benefit from the Republican’s “cut taxes-cut spending” tax giveaway to the rich scheme, but they will feel those cuts much more.

A Strong Minnesota Needs Strong Public Education

I saw this old photo on Facebook today.  I love it! 

We will be strong, whether we are talking about our economy or our position in the world by having the smartest and best educated kids.  Yet, we continue to weaken our nation by slashing funds to schools, teaching rote skills based on broad legislative standards instead of teaching individual creativity, and letting politicians get in the way of what subjects are taught, how they are taught, which textbooks we use and whose education standards we use.

Education is a local issue, and A Strong Minnesota Needs Strong Public Education.  It is time for politicians to realize education is an investment in the future and in a strong Minnesota.  Let’s treat it like an investment and fund it so that every kid has an opportunity to excel.

John Kline Protecting What?!?

“The Republican’s sinful selfishness has given our country a period of loose thinking, descending morals, an era of selfishness…Republican leaders not only failed in material things, they have failed in national vision, because in disaster, they have held out no hope, they have pointed no path for the people below to climb back to places of security and of safety in our American life.”

Doesn’t that sounds like something President Barack Obama might have said in the last year. The quote is actually almost eight decades old. In 1932, Franklin Delano Roosevelt made that statement accusing the Republicans of creating an economy that helped a favored few to the detriment of the individual.

I’m not sure anything has changed in the last 80 years. Republicans have fought to protect corporate rights over the rights of individuals on a regular basis. I’m talking environmental issues, health issues, tax issues, labor issues, energy issues, and I could go on.

And who has “failed in material things” and “failed in national vision” over the last decade more in this state than Congressman John Kline? I know it is a toss up between Governor Pawlenty and John Kline, but Michelle Bachmann hasn’t even reached the level of failure John Kline has.

John Kline recently sent out a mailing that states in bold, large letters “Congressman John Kline Protecting Minnesota’s Economy and Jobs.” I’d love to hear from him so he could tell me exactly what he has done to protect Minnesota’s economy and jobs.

Wasn’t he in congress supporting the economic and foreign policies that despite the recent upturn, still threaten to send us into a second Great Republican Depression? What has he done? He has joined the “NO” chorus on the Right opposing anything that might improve the economy or create jobs.

Apparently John Kline prefers to protect Minnesota’s Economy and Jobs the same way Republicans did in 1929, by sitting on his hands and seeing what happens. I’ll tell you what John Kline, I am no economic genius or any sort of policy wonk, but I know in the real world if you sit on your hands and refuse to do anything when change needs to occur, things are just going to get worse. Thanks for protecting us John Kline.

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Are you living within your means?

I keep hearing government needs to learn to live within its means.  Many politicians are quoted that during these tough economic times citizens have learned to live within their means, government should too.

Are you living within your means? 

According to the credit card industry, at the end of 2008, the average American credit card debt in households that have a credit card was $10,679.  That figure was up .4% from 2007.

In March 2009, credit card debt was nearly $950 billion! 

According to a congressional economic committee report, nearly 14% of Americans disposable income is used to pay that debt. 

In 2004, 58% of households had credit card debt.  Do you think that figure has gone down or up in the last 6 years?

I could go on with insane figures about credit card debt.  But credit card debt isn’t the only debt.  How many families have a car loan?  How many families have a student loan?  How many families have a mortgage?

I’m not truly living within my means.  Are you?

“Living within our means” has become a buzz phrase that politicians use in an attempt to get votes.  That is all it is.  The most notable Minnesota politician who uses the “live within our means” phrase, is willing to push debt into the future like a huge credit card balance onto the backs of our children.  That way, he can claim there were no tax increases when he runs for president.

Don’t let the buzz phrases influence your voting decision.  We need to elect leaders who plan for and invest in the future.  Candidates who realize rough times happen and the best way to prepare is during good times.  It takes an honest, authentic and common-sense individual to do that.  And you won’t find it from somebody declaring we just need to cut expenses and live within our means.  There is a lot more to living within our means than simply cut, cut, cut.

Credit Card Industry Facts

Whining About The Mortgage Crisis

I’ve been listening to a lot of progressive radio recently. I have been an on and off listener of progressive talk since its local inception, but I have never heard the number of right wingers calling the progressive shows in the numbers they have been calling in recent months.

I don’t have a problem with them calling, in fact it can be pretty entertaining, especially on The Stephanie Miller Show, but some of the things they are calling about are so dumb. Helicopters, socialism, homosexual influence, and some even still talk of Obama’s birth place.

But what I am most sick of, are whiney ditto heads calling up and complaining about somebody who signed a bad mortgage getting some kind of help from the government, while those who were “responsible” don’t get anything. I just had that conversation with my 11 year-old over piano lessons. Arguments like that are at an 11 year-old mentality level, not for common-sense grown adults. And if you are reading this and you really don’t know why a program like what Obama is proposing will help you, let me tell you a true story.

I applied for a loan yesterday. We were looking at moving a few years ago, and it was thought then that our little house would sell for $239,000. I know the value of my house has dropped. My guess was that it was worth around $200,000, that is what the banker thought too, and our tax statement lists it in that range, but I was shocked when the credit union pulled the value at $178,000. There are several houses in my neighborhood that have been foreclosed on. There are several that have sold very low preventing foreclosure or even after foreclosure. Maintaining the value of your house is what you get out of Obama’s plan you whiney lemmings.

Now one other thing in defense of those that signed bad mortgages. When my wife and I bought our house in 1996, we were completely dependent on the advice of the agent and lender. We were 25, and had never done anything like it before. We barely bought our house for $99,000, that amount stretched our approval limit into a variable rate, and our salaries were about half of what the house was purchased at, that is a pretty decent ratio today.

Now fast forward 10 years. Our salaries have not increased very much because my wife stays home with children. We basically have one income, barely more than it was in 1996, and when we went through the process to get pre-approved for a home loan, we somehow qualify for a $289,000 loan. How is that possible? If you take into account inflation, we are probably making less than when we bought our house in 1996.  How do we qualify for nearly triple the home cost?

If we were 25 again, in that same situation, I’m thinking we would probably trust our agent and our lender. We weren’t 25, so we didn’t, but my assumption is that many did.

Whose fault is it? Is it the buyer? I think lenders looking for quick money through mortgages that could be dumped into securities with no loss are the people responsible. They are responsible for the downturn in the economy, they are accomplices in the Bush recession, they are the reason for the banking collapse, and everything they have done in a greedy manor stinks, just like the people trying to blame the innocent.

Pay Cuts

I have an idea, one that would endear Governor Pawlenty to the people of Minnesota. And he has to do it, it wouldn’t be the legislature that does it. With the state in such a financial crisis, he should take the lead, mandate a statewide 5% salary cut in the legislature for a two-year periodNot only cut salaries, but cut per diems in half for the legislature and himself. It would make him look really good, and he could really stick it to the opponents in the next election.

Now, I don’t want him to look good, it is my opinion that the current and the last governors have done nothing but allow for the rapid decline of Minnesota’s previously superior education system. I don’t want to live in the Arkansas of the north just because he doesn’t like government, but everything about that proposal seems like something he should support.

Minnesota is $5.2 billion in the hole

Some big scary headlines:

Economy lost another 533,000 jobs in Nov.  Worst month since December 1974 brings total this year to 1.9 million

Minnesota is $5.2 billion in the hole

I found out earlier this week that nobody in our office will be getting a raise this year. Add to that increased healthcare, increased spending at home because things are more expensive, and increased spending because my boys are getting bigger and consuming more, I am not sitting in neutral, I am going in reverse. We don’t have simple places to cut spending, like others do. We don’t eat out, we don’t have cable, we don’t drink coffee or soda, we don’t even rent movies, if I want to buy food and keep my house warm, either my wife or I need to work more, so I am probably going to look for a part-time job. If the state wants to provide services, it can cut some, but it can’t cut everything, so it needs to work to get more money, that means it needs to raise taxes.

Minnesota has a population around 5.2 million, and that population has a median household income of about $55,000. The deficit is 5.2 billion over two years, that is $1000 per person, or $500 per person per year. That means my families share is $2500 per year, probably around $1500 for an average household. If we say that we can cut half of the deficit through cost cutting, that makes an average household’s share $750, and structure a tax increase in a graduated fashion so that people below the median pay less, with the tax growing for wealthier individuals and businesses. Why don’t we tighten our belts, bite the bullet and do that for a two year period? The state gives money back when we have a surplus, it seems like common-sense that the state should take extra money when we don’t.