Abandonment of Middle Class – Page 9

Tax Abatements Are Killing School Budgets

The Daily Escape:

Egmont National Park, NZ – photo by vicarious_NZ

A new report shows that US public schools in 28 states lost at least $1.8 billion in tax revenues last year as a result of tax incentives granted to corporations. The study analyzed the financial reports of 5,600 of the nation’s 13,500 independent public school districts.

Good Jobs First examined the first full year of reporting under a new accounting standard for school districts, adopted by the Governmental Accounting Standards Board (GASB), the body that sets accounting rules for all states and most localities. The new rule, GASB Statement No. 77 on Tax Abatement Disclosures, requires most state and local governments to report annually on the amount of revenue they’ve lost to corporate tax abatements.

This is extremely important, since most local schools are very dependent on revenue from property taxes, but they rarely have influence over corporate tax abatements granted by their towns, and/or the cities or counties where they are located.

And local voters have had no way to see how much they are forced to pay in additional taxes that were lost to enrich the pockets of corporate employers.

Good Jobs found that the 10 most affected states could have hired more than 28,000 new teachers if they were able to use the lost revenues. Or, they could have avoided higher home property taxes, or provided their teachers with better resources, or higher pay.

States and cities have long used abatements and other tax incentives to lure companies, or to keep them from leaving, and/or to encourage them to expand locally. Often, those companies make their choice of location based on the quality of local schools and colleges.

These abatement deals are made by local politicians and are meant to boost local economic development. Their proponents say the lost tax revenue is worth it, because they grow the local economy. But it is difficult to know whether the benefits outweigh the burdens.

And until GASB 77, it has been impossible to see just how much a school system may have lost because of a company’s tax break. The new rule is especially helpful in understanding local schools finances, because it requires the reporting of revenue losses even if they are suffered passively by the school system as the result of decisions made by another body of government.

Of the five districts that lost the most, three are in Louisiana. Together, they lost more than $158 million, or $2,500 for each student enrolled. The School District of Philadelphia, which only last year regained local control from the state after climbing out of a deep fiscal crisis, lost the second most revenue at $62 million.

Overall, nearly 250 school districts lost at least $1 million each, and in four districts, tax abatements reduced classroom resources by more than $50 million.

But most school districts have not yet complied with Rule 77, which was implemented in 2015. Good Jobs First estimates that another $500 million of subsidies and abatements are currently unreported.

Most of us believe that our governments are supposed to govern in the interests of the “general welfare,” that when voters put people in positions of power, based on the legitimacy of our electoral process, is the limit of our responsibility as voters.

We accept that somebody has to say what the rules are, and then enforce them.

But in our neoliberal economic times, voters have to remember that our governments often act as wholly owned subsidiaries of the 1%. It takes suspension of belief to accept that our republic, ruled as it is by an oligarchy, is working for the general welfare of all of our citizens.

Why do we think that, our “governments”, all of which are subject to capture and ownership by the few, are going to somehow provide decency, comity, or fairness to all of us?

We need to abandon the article of faith that the free market, one without government oversight, promotes the best economic outcome for all of us.

Today’s inequality says the opposite.

We need a new vision of the role of government. But it isn’t really a “new” vision. It is simply a return to insisting on the “promotion of the General Welfare for all” as the paramount object of government.

Here’s another thought from Gordon Wood, in his book, Creation of the American Republic:

In a republic each individual gives up all private interest that is not consistent with the general good, the interest of the whole body. For the republican patriots of 1776 the commonweal was all encompassing—a transcendent object with a unique moral worth that made partial considerations fade into insignificance.

The last outcome that American revolutionaries wanted was to be ruled by oligarchs. But, here we are.

We need to reform our capitalism.

We’re Too Short to be on This Ride

The Daily Escape:

Lion’s Head, Capetown South Africa, viewed from Tabletop Mountain – 2012 photo by Wrongo

A WaPo report said that Donald Trump discussed giving Janet Yellen another term as head of the Federal Reserve, but was concerned that she was too short. He thought that at 5 feet, 3 inches, she just wasn’t tall enough to get the job done.

Wrongo thinks Yellen’s performance was about the same as her predecessor, Ben Bernanke, and her successor, Jerome Powell. Shouldn’t the real question be: Do we know what’s wrong with our economy, and do we have people in place with enough strength and/or courage to fix it? They can also be short, as long as they have ability and vision.

And it isn’t only in the US: (brackets by Wrongo)

Income inequality has increased in nearly all regions of the world over the past four decades, according to the World Inequality Report 2018. Since 1980, the global top 1% of earners have…[garnered] twice as much of the global growth as have the poorest 50%.

More from the World Inequality Report: (emphasis by Wrongo)

Such acute economic imbalances can lead to political, economic, and social catastrophes if they are not properly monitored and addressed….Governments need to do more to keep society fair…Public services, taxation, social safety nets – all of these have a role to play.

We’re seeing a slow-rolling social catastrophe in the US. We’re seeing alienation across class, race, age and gender. We’re divided as never before, with the possible exception of the pre-Civil War period.

Aren’t we all too short to be on this ride?

Central banks play an integral part in the global economy, and their performance (including the Fed’s) during the 2008 Great Recession was for the most part, admirable.

But central banks can only use monetary policy to partially solve issues of economic inequality. The most robust solutions lie in fiscal policy. Fiscal policy is how Congress and other elected officials influence the economy using spending, taxation and regulation.

Take student loans. Many of our university students are simply being led to the debt gallows. Currently, 44.5 million student loan borrowers in the US owe a total of $1.5 trillion. Student loans are the fastest growing segment of US household debt, seeing almost 157% growth since the Great Recession.

From Bloomberg:

Student loans are being issued at unprecedented rates as more American students pursue higher education. But the cost of tuition at both private and public institutions is touching all-time highs, while interest rates on student loans are also rising. Students are spending more time working instead of studying. (Some 85% of current students now work paid jobs while enrolled.)

Student loan debt has the highest “over 90 days” delinquency rate of all household debt. More than 10% of student borrowers are at least 90 days delinquent. Mortgages and auto loans have a 1.1% and 4% 90-day delinquency rate, respectively,

And if the student loan can’t be repaid, it isn’t expunged by bankruptcy. In fact, students can’t outlive their debt. The feds can garnish social security payments to repay a student’s outstanding debt.

As young adults struggle to pay back their loans, they’re forced to make financial choices that create a drag on the economy. Student debt has delayed marriages. It has led to a decline in home ownership. Sixteen percent of young workers aged 25 to 35 lived with their parents in 2017, up 4% from 10 years earlier.

We are only beginning to understand the social costs of our politics. We are in the midst of a brewing social disaster. And these are self-inflicted wounds, fixable with different government policies. But, most of today’s politicians are too short to get on that ride.

So, how to solve the simultaneous equations of high poverty rates, income inequality and an impending social disaster?

It won’t be easy, and it starts with politicians admitting that our economy doesn’t work for everyone, and that it must be reformed. Then, we can move beyond the tired rallying cries of “more tax cuts” to a capitalism which incorporates a social consciousness that can get people on the track to better paying, and more secure jobs.

An April 2018 study of survey data from 16 European countries found that economic deprivation increased right-wing populist tendencies. Sam van Noort, a co-author of the report said:

Individuals who “feel economically less well-off” were more likely to be attracted by the far right…and radical right respondents are more likely to be male, subjectively poorer, less educated [and] younger.

This will also happen here, unless the voters have determination, and even the short politicians have courage.

Monday Wake Up Call – December 3, 2018

The Daily Escape:

Boston Public Library – photo by joethommas

The NYT’s David Brooks:

We’re enjoying one of the best economies of our lifetime. The GDP is growing at about 3.5% a year, which is about a point faster than many experts thought possible. We’re in the middle of the second-longest recovery in American history, and if it lasts for another eight months it will be the longest ever.

So everything’s good, no? Not really. More from Brooks: (emphasis by Wrongo)

Researchers with the Gallup-Sharecare Well-Being Index interviewed 160,000 adults in 2017 to ask about their financial security, social relationships, sense of purpose and connectedness to community. Last year turned out to be the worst year for well-being of any since the study began 10 years ago.

And people’s faith in capitalism has declined, especially among the young. Only 45% of those between 18 and 29 see capitalism positively, a lower rate than in 2010.

Brooks’ conclusion? It’s not the economy, we all just need more community connections.

His is another attempt to dress up the now-failing neoliberal economics. Things look good today from some perspectives, but our economy is crushingly cruel from others. Brooks seems to think that millions of Americans are struggling to pay their rent or mortgage, education loans, health care insurance or buy groceries because they have failed to master the art of networking in their neighborhoods.

Alienation is behind the rise of Trumpism, and the rise of populism across the world. In that sense, Brooks is correct, but the leading cause of people’s alienation is economic inequality.

And the leading cause of economic inequality is corporate America’s free rein, supported by their helpmates in Washington. Last week, Wrongo wrote about the exceptional market concentration that has taken place in the US in the past few years. He suggested America needs a revitalized anti-trust initiative. In The Myth of Capitalism, authors Jonathan Tepper and Denise Hearns write:

Capitalism without competition is not capitalism.

For decades, most economists dismissed antitrust actions as superfluous, so long as consumers were not the victims of price-gouging. Monopoly capitalism is back, and it’s harmful, even if a company’s core product (like Google’s and Facebook’s) is free to consumers. As we wrote last week, there’s excessive corporate concentration in most industries, including air travel, banking, beer, health insurance, cell service, and even in the funeral industry.

All of this has led to a huge and growing inequality gap. That means there is little or no economic security for a large and growing section of the American population. People see their communities stagnating, or dying. They feel hopeless, angry, and yes, alienated.

One consequence is that we’ve seen three years of declining life expectancy, linked to growing drug use and suicides. We seem to be on the edge of a social catastrophe.

But our real worry has to be political. People could become so desperate for change that they are willing to do anything to get it. The worry then, is that few vote and a minority elects a strong man populist leader, simply because he/she tells them what they want to hear. That leader can then go out and wreak havoc on our Constitutional Republic.

After that, anything could happen.

Despite what Brooks thinks, we don’t have a crisis of connections. It’s a crisis of poorly paying jobs, job insecurity, and poverty. When people look at their economic prospects, they despair for their children. Doesn’t it matter that in America, health care, education, and transportation all lag behind other developed countries?

The unbridled ideology of free markets is the enemy. Our problem isn’t that individual entrepreneurs went out and took all the gains for themselves, leaving the rest of us holding the bag. It’s more about how neoliberal economics is used both by government and corporations to justify an anti-tax and anti-trust approach that has led to extreme wealth and income concentration in the top 1% of Americans.

The reality is that the nation’s wealth has become the exclusive property of the already prosperous.

We need to wake up America! We have to stop for a second, and think about how we can dig out of this mess. When America bought in to FDR’s New Deal programs 75 years ago, we entered an era we now think back on nostalgically as “great”.

And it isn’t enough to talk about how we can look to Sweden or Norway as economic models. Both have populations of under 10 million, and our society is far less homogeneous than theirs.

We need a uniquely American solution to this problem. It will involve reforming capitalism, starting with tax reform, and enforcing anti-trust legislation.

Saturday Soother – December 1, 2018

The Daily Escape:

Yukon Grizzly before hibernation – 2014 photo by Paul Nicklen

Quite the week. We had barely digested Thanksgiving dinner when we heard about Russia seizing three Ukrainian Navy vessels in the Azov Sea. We learned that Paul Manafort lied to Robert Mueller, and that his lawyer reported everything that occurred between Manafort and Mueller to the White House. Then, we heard that Trump’s former in-house lawyer, Michael Cohen has admitted to lying to Congress, and is now cooperating with Mueller. Who knows what it all means?

But, the big story this week was that we learned that life expectancy in the US fell to 78.6 years, a 0.3 year decline from our peak. From CNN:

Overdose deaths reached a new high in 2017, topping 70,000, while the suicide rate increased by 3.7%, the CDC’s National Center for Health Statistics reports.

We are witnessing social decay in America. This is consistent with what Angus Deaton and Ann Case called “deaths of despair” in 2017. The WSJ has a detailed breakdown, and also points out how other countries are continuing to show progress:

Data the Centers for Disease Control and Prevention released on Thursday show life expectancy fell by one-tenth of a percent, to 78.6 years, pushed down by the sharpest annual increase in suicides in nearly a decade and a continued rise in deaths from powerful opioid drugs like fentanyl. Influenza, pneumonia and diabetes also factored into last year’s increase.

From Yves Smith:

Americans take antidepressants at a higher rate than any country in the world. The average job tenure is a mere 4.4 years. In my youth, if you changed jobs in less than seven or eight years, you were seen as an opportunist or probably poor performer. The near impossibility of getting a new job if you are over 40 and the fact that outside hot fields, young people can also find it hard to get work commensurate with their education and experience, means that those who do have jobs can be and are exploited by their employers.

The 2017 data paint a dark picture of health and well-being in the US, reflecting the effects of addiction and despair, particularly among young and middle-aged adults. In addition, diseases are plaguing people with limited access to health care.

In the late part of the last century, and the early years of this century, there was a steady decline in heart-disease deaths. That offset a rising number of deaths from drugs and suicide. Now, we’re not seeing those heart-related declines, while drug and suicide deaths occur earlier in life, accounting for more years of life lost.

The worst aspect is that it never had to be this way. These drug and suicide deaths are “collateral damage” caused by the social and economic changes in America since the 1970s.

And we made most of those changes by choice.

Wrongo is reminded that last month, he learned that something similar had happened in Russia under Gorbachev. Under Perestroika, millions of Russians lost jobs. The government’s budget deficits grew. The death rate exceeded the birth rate. Nearly 700,000 children were abandoned by parents who couldn’t afford to take care of them. The average lifespan of men dropped to 59 years.

Are we in a slow motion disaster that could be similar to what Russia went through back in the 1990s?

We’ve become hardened. These American deaths are largely anonymous. When AIDS was ravishing the gay community in the 1980s, people were able to appreciate the huge number of deaths by seeing, or adding to, the AIDS Memorial Quilt, which eventually weighed more than 50 tons.

There is no equivalent recognition for these deaths of despair.

A traitorous American ruling class has sold out its middle and lower classes. If you doubt that, think about Wal-Mart. The Walton’s fortune was made by acting as an agent of Chinese manufacturers, in direct competition with US manufacturers. Doesn’t that seem like treason?

Relax, there’s nothing you can do about all of this today, the first day of December. Time to get what solace you can from a few minutes having a coffee, and a listen to a piece of soothing music.

Start by brewing a cup of Kona Mele Extra Fancy coffee from Hula Daddy Kona Coffee ($64.94/lb.). It has an aroma of dark chocolate, fruit and flowers. And shipping is free.

Now settle back and listen to a few minutes of George Winston’s “December”. Here are Part 1: Snow, Part 2: Midnight, and Part 3: Minstrels:

Those who read the Wrongologist in email can view the video here.

Capitalism Must Be Reformed

The Daily Escape:

Mt. Fuji, Japan at sunset – November, 2018 photo by miles360x

From the Economist:

In 2016, a survey found that more than half of young Americans no longer support capitalism.

One reason that young people have lost faith in capitalism is the exceptional market concentration that has taken place in the US in the past few years. US firms have gotten bigger, often by acquiring their competition. This is true across many markets. Vox reports that: (parenthesis by Wrongo)

Four companies…control 97% of the dry cat food sector: Nestlé, J.M. Smucker, Supermarket Brand, and Mars. According to the report, Nestlé has a 57% (share of)…the industry, owning brands such as Purina, Fancy Feast, Felix, and Friskies. Altria, Reynolds American, and Imperial have a 92% market share of the cigarette and tobacco manufacturing industry. Anheuser-Busch InBev, MillerCoors, and Constellation have a 75% share of the beer industry. Hillenbrand and Matthews have a 76% share of the coffin and casket manufacturing industry.

On November 26^th, the Open Markets Institute, an anti-monopoly think tank, released a data set showing the market share of the largest companies in each industry. Pulling the data together was a challenge, because the FTC halted the collection and publication of industry concentration data in 1981, during the time of Ronald Regan. Now, David Leonhardt of the NYT has turned it into a table:

As you can see, big companies are much more dominant than they were just 15 years ago. More from Leonhardt:

The new corporate behemoths have been very good for their executives and largest shareholders — and bad for almost everyone else. Sooner or later, the companies tend to raise prices. They hold down wages, because where else are workers going to go? They use their resources to sway government policy. Many of our economic ills — like income stagnation and a decline in entrepreneurship — stem partly from corporate gigantism.

Sarah Miller, deputy director of the Open Markets Institute, told Vox: (brackets by Wrongo)

… [When] you go to the store, you see all of these brands, but guess what? They’re all being operated by the same companies…She called the system a scam economy where competition is an illusion, and choice is an illusion.

The primary issue with corporate concentration is its potential to drive up prices. The fewer sellers, the fewer choices consumers have for goods and services, and thus, there is less pressure for the big competitors to hold prices down.

Even if many consumers don’t immediately realize they are victims of concentration, it’s visible when millions of homes only have one internet provider. Or, when four cellphone providers control 98% percent of the market (Verizon, AT&T, T-Mobile, and Sprint). And if the T-Mobile and Sprint merger plan goes through, there will be just three.

Ultimately, monopolies aren’t just an economic problem. They are also a political one. Democrats believe that anti-monopolism can be a political winner. It’s a way to address voters’ anxiety over high drug prices, digital privacy, and low wages.

We have been at this rodeo before. At the start of the 20th century, we broke up monopolies in railways and energy. In 1984, we broke up AT&T, only to see the “Baby Bells” recombine in the 1990s. We’ve simply stopped enforcing our anti-trust laws over the past 40 years.

Meanwhile, the public has been manipulated to believe that ever larger companies are in their best interests. We celebrate the “right” of large corporations to operate in unfettered ways.

But, Econ 101 shows that the trajectory of a monopoly starts with economies of scale, and ends with economies of exploitation. And remember that six corporations own 90% of the media. We won’t hear much about wrongdoing at Amazon from the Washington Post.

The required anti-trust laws are already on the books, but interpretation of them has changed over the years under Republican administrations. Eventually, we will have to break up existing giants, like we did before. One obvious candidate is Amazon, a company that will soon dominate the supply chain and all logistics in the US.

Facebook, which has gobbled up Instagram and WhatsApp, may be another candidate.

America is very late in addressing the negative outcomes of free markets, so there’s no time like the present to begin to Make America Love Small Business Again.

Voters need to push for anti-trust enforcement, which can only be done by the federal government. We have to insist that the protection of citizens is more important than protecting the 1%.

Let’s close with this quote from Louis Brandeis: “We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”

A Strategy for 2020 Emerges

The Daily Escape:

Fall in Hopkinton, MA – November, 2018 photo by Karen Randall

The 2020 election campaign has already started, regardless of whether we are ready.

“Big Idea” strategies are in the air. And the large group of potential Democratic presidential candidates are being discussed.

And we no longer have to chew on the failure by Democrats in 2016. We can now talk about lessons learned in the 2018 midterms, and how they may apply in 2020. Wrongo wants to highlight three Democrats who won in deeply Republican districts. Max Rose, who won on Staten Island in NYC; Kyrsten Sinema, who won the open Senate seat in Arizona; and Lauren Underwood, who won a Congressional seat in Illinois.

Rose won a district that went heavily for Trump in 2016. He beat a long-time incumbent Republican. He did it by asking for a chance to reshape the fortunes of working people. From the NYT:

He offered a simple, unifying message that was progressive in substance but relatively neutral in its delivery: that the system is rigged to benefit special interests, that the little guy is getting stiffed over and over, that we need better infrastructure and stronger unions.

Demographic change helped. Rose’s district covers parts of Staten Island and Brooklyn, where Millennials who have been priced out of living in Manhattan and trendy Brooklyn are now locating.

Kyrsten Sinema’s story is different on the surface, but similar in what got her elected. A three-term member of Congress, she campaigned on her biography. She was homeless for three years as a child. Sinema is an openly bisexual former Green Party activist who moved to the political center.

Sinema promised to be a nonpartisan problem-solver. She campaigned on health care and protections for people with pre-existing conditions. Sinema treaded lightly on immigration, but probably looked pro-immigrant versus her opponent Martha McSally, another member of Congress who was very anti-immigration. 2.1 million Latinos live in Arizona, and after Trump’s visit in October, there was a spike in Latinos returning early ballots. Most Arizona residents vote by mail, and many Latinos voted for Sinema.

Lauren Underwood won an Illinois Congressional seat held in the past by the infamous Denny Hastert. The 32-year-old African-American nurse, unseated four-term Rep. Randy Hultgren in a district that is 86% white. The district was gerrymandered after the 2010 census to make it an even safer Republican seat. She won by stressing health care for all Americans.

These three candidates were successful in traditionally Republican places. They each had great personal stories. They each ran as problem solvers who wanted to help working families. This shows there are two threads that mattered in 2018: The candidate, and a message that addressed the things that were alienating people in their districts.

If we widen out our view to America today, alienation is behind the rise of Trumpism, and the rise of populism across the world.

The leading cause of people’s alienation is economic inequality.

Candidates can win as centrists if they are willing to fight economic inequality, because everybody knows that the system is rigged to benefit special interests.

Progressives can also win on economic inequality, because the largest divide in our country is between the 98% and the 2%. This idea can unite us, because nowhere in the US do the capitalists outnumber the salaried and hourly wage people.

Remember what Franklin Roosevelt said in his acceptance speech: (emphasis by Wrongo)

Throughout the nation men and women, forgotten in the political philosophy of the Government, look to us here for guidance and for more equitable opportunity to share in the distribution of national wealth… I pledge myself to a new deal for the American people. This is more than a political campaign. It is a call to arms.

Today, Democrats need working people to vote for them if they want to win decisively. But since they govern like mainstream Republicans when in office, they must change to an FDR-like call to action.

It is possible to build voting coalitions that pick off a few red states in 2020. In fact, the midterm results were a terrible leading indicator for Trump in 2020. Without Hillary heading the ticket, Midwest states like Michigan and Wisconsin appear to be returning to Democrats. Pennsylvania is already back.

The Dems need to convince voters that governing the country in a manner that benefits everyone is a better idea than governing the country in a manner that benefits only a few.

The potential new votes for Democrats by following this strategy is largely the pool of non-voters. They are the majority in this country, and they are alienated.

They also outnumber the small percentage of persuadable Republican voters.

Nominating high quality candidates and fighting alienation are the keys to success in 2020.

Saturday Soother – Voter Turnout Edition

The Daily Escape:

Autumn, Blue Ridge Mountains, near Asheville, NC – 2018 photo by RedWhiteTruee

Wrongo guesses that we’ll know Tuesday night whether being an A-hole is a winning strategy for the Donald.

While traveling in Russia, Wrongo finished reading (and recommends) Amor Towle’s “A Gentleman in Moscow”. If you haven’t read it, the story is about a Russian nobleman who is sentenced in 1922 by the Bolsheviks to the equivalent of permanent house arrest in Moscow’s Hotel Metropol. He spends 30+ years living there.

Doesn’t it seem that we have been locked up for the past two years, waiting on the mid-terms? Let’s hope that on Tuesday, the doors will fly open, because we want out. We want a world with fewer lies, with fewer insults, maybe even a return to sanity.

Here’s a thought to launch you into the weekend. Despite Friday’s news about brisk new jobs creation, and the headline unemployment rate being at a 50-year low, MarketWatch reported that just 28% of Americans are financially healthy:

Some 44% of people said their expenses exceeded their income in the past year and they used credit to make ends meet. Another 42% said they have no retirement savings at all.

That’s despite a nine-year-long bull(ish) stock market, and consumer confidence levels nearing record highs. And, there’s more:

The median American household currently holds just $11,700 in savings, according to a recent analysis of Federal Reserve and Federal Deposit Insurance Corp. data by personal-finance site Magnify Money. The top 1% of households in the U.S. by income have a median savings of $1.1 million….The bottom 20% by income have no savings accounts and the second lowest 20% income earners have just $26,450 saved.

Meanwhile, the majority of Americans in a recent survey said their finances have not improved since the 2016 elections. Market Watch quotes Mark Hamrick, senior economic analyst at Bankrate:

All of this is a call to action: We need to make savings, both for retirement and for emergencies a higher priority, so that they aren’t the source of financial regret later in life.

So, all of you politicians who are running on the great economy ought to study up on a few facts, and find a few solutions.

A good start for the rest of us is showing up to vote on, or before next Tuesday.

But Wrongo senses that you’ve had enough, that you need to check out of the news feeds, to stop being carpet-bombed by political ads, and contemplate…nothing. To help you get started on your Saturday Soothing, brew up a large, hot steaming cup of Kenya Konyu coffee, with its sweet, tart and savory notes of dried berries and richly bittersweet flowers ($16.25 for 10 oz.). It comes from Branch Street Coffee Roasters in Youngstown, in the swing state of Ohio.

Since it’s another rainy Saturday in the Northeast, stay indoors and listen to English composer Sir Michael Tippett’s “Concerto for Double String Orchestra”. Here, the Adagio, the middle movement of the Concerto, is played by the Academy of St Martin-in-the-Fields, conducted by Sir Neville Marriner:

Those who read the Wrongologist in email can view the video here.

Will Dems Counter the GOP’s Plan to Cut Social Security?

The Daily Escape:

Fall in Paradise Valley, Yellowstone NP – photo by Annie Griffiths

The mid-terms are coming, and we are having difficulty focusing on some important issues, because America has a short attention span, and we’ve been Kavanaugh ‘ed and Khashoggi ‘ed so much lately.

Two issues that are linked are the amazing deficit caused by the Trump tax cuts, and the moves being plotted by Mitch McConnell, Paul Ryan and others to cut Medicare, Medicaid and Social Security.

Let’s start with tax revenues. It was clear to critics that the 2017 GOP tax cut was going to quickly increase the budget deficit and add $ trillions of the national debt, and here it is:

The federal deficit grew by nearly $800 billion over the first fiscal year of Trump’s presidency, during which the Republican Congress passed a tax cut targeted mostly to corporations and the wealthy, which is projected to add more than $1 trillion to the deficit over the next 10 years.

And it didn’t take long for Republicans to insist that the deficits were actually caused by Social Security, Medicare, and Medicaid, not their tax cuts for corporations and the wealthy. From Vox:

Fresh off the news that the deficit is increasing under President Donald Trump, Senate Majority Leader Mitch McConnell told Bloomberg News that Congress should target Social Security and Medicare for cuts to address the growing federal debt.

The White House and GOP leaders promised America that the tax cuts would pay for themselves, but they haven’t. The growing federal deficit hasn’t caused Republican leaders to reconsider their tax policy. Instead, they argue that entitlement reform — Republican-speak for cuts to social safety net programs — is what’s really needed to address the federal deficit. From McConnell’s interview with Bloomberg this week:

It’s disappointing, but it’s not a Republican problem….It’s a bipartisan problem: unwillingness to address the real drivers of the debt by doing anything to adjust those programs to the demographics of America in the future.

Republicans have opposed Social Security and Medicare since they were created. But because these programs enjoy overwhelming support from the American people, they would not normally talk about their plans for benefit cuts three weeks before an election.

But, they are doing just that.

This is a real issue, since those programs make up a large share of federal spending: Medicare was 15% of the federal budget in 2017, and it’s projected to grow to 18% by 2028. Social Security is a bigger chunk of the budget (24% in 2016), and our aging population will put a greater strain on the program. Here is the budget breakdown:

Democrats want to expand, not cut these programs. Republicans may see their last, best chance to cut them slipping away with the mid-terms. They seem determined not to let that happen, so this will be a big issue in the lame duck sessions. The GOP will use the cost of their tax giveaways as the excuse to do what they have wanted to do to social programs all along.

If the GOP is talking like this before the mid-terms, imagine the carnage if they keep control of both Houses of Congress!

People who want to defend Social Security and Medicare better work hard to get out the vote in November. And the latest news about the House isn’t encouraging. Larry Sabato’s Crystal Ball reports that Democrats aren’t there yet:

A race-by-race analysis of Democratic House targets shows the party is close to winning the majority, but they do not have it put away, in our judgment, with Election Day less than three weeks away.

Barring a big, positive late change in the political environment in favor of Republicans, the bare minimum for Democratic House gains is in the mid-to-high teens. The needed 23-seat net gain is not that far beyond that and there are many different paths Democrats can take to achieve it.

He says Dems can count on 18, but need 23…

Assuming that the Dems won’t go along with the GOP’s planned social spending cuts, Republicans will try to blame Nancy Pelosi, Chuck Schumer and the Democrats, assuming their cuts to social programs fail.

Republicans will say “Democrats plan to raise taxes on tens of millions of middle-class Americans” to cut the deficit, and that’s true. But, it would be just a part of the package of fiscal moves to cut the deficit, with the primary focus on clawing back some of the massive Republican corporate tax cuts.

Democrats need to talk this up in the next three weeks to counter the GOP’s clearly articulated game plan.

Letter From Russia, Part III

The Daily Escape:

The Assumption Cathedral, Yaroslavl, RU. Originally built in 1210, it was blown up by the Soviets in 1937 as part of their anti-religion policy. This new cathedral was constructed in 2010 on the same spot. In front is an eternal flame memorializing the soldiers and the workers of WWII.

Wrongo and Ms. Right spent the day in Yaroslavl, Russia. It’s a mid-sized town of about 600k residents, and an important port on the Volga River. The Volga is more than 2,000 miles long, tying the western Russian cities together. Yaroslavl is an ancient city, founded in 1010.

In Yaroslavl, we learned two interesting facts about Russian towns. Any town of size has a fortress that includes a church. In Russia, that space is called a “Kremlin”. Second, despite the collapse of the the Soviet Union, statues of the heroes of the revolution were not taken down. The idea is that young people should understand their history, both the good and the bad. Major streets have kept their revolutionary names as well.

Maybe there is a lesson in that for America.

In visiting both tiny towns and large cities, it quickly becomes evident that the peoples of Russia have suffered immensely over the centuries. They endured long periods of starvation, and their losses in blood and treasure at the hands of both their enemies and their rulers were truly extraordinary:

As many as 17 million died under Stalin in the Gulags. At their high point, there were thousands of Gulags across the Soviet Union.
In WWII, during the war with Germany, Russia lost 27 million people.
During the 400 years of serfdom, millions of serfs died during forced labor. They built the palaces, roads and waterways that remain in use today between Moscow and St. Petersburg.

If history teaches us just one thing about Russia, it is that its people know suffering. They have survived, and in Wrongo’s brief visit, appear to have thrived. Stores are full of product, markets are busy with the purchase of fresh vegetables, meats and fish. New cars are on the streets, theaters are open, and everything looks very clean.

How have a people who have endured so much suffering, succeeded in the modern world? How were they not irretrievably damaged by their multiple tragedies?

How are they so resilient?

Perhaps their legendary winters forge a determination to do whatever is necessary to survive a long, hard fight with limited resources. Perhaps Russia’s long history of invasion and occupation by hostile powers has played a role: Russians have been invaded by the Mongols, the Turks, the Poles, the Swedes, the Germans and the French. Their story is ultimately one of resilience despite tremendous loss of life, repeated destruction of infrastructure, and against long odds.

Another thing is that the people seem to have a profound and deep feeling for their homeland, Mother Russia. That seems to be true, regardless of who is in control in the Kremlin, or which Tsar was in charge at the time.

So they fought and died for the motherland, regardless of who was leading them.

Compare that with America’s resilience. How resilient are we, in the 21^st Century? We have never faced invasion, but we have faced attack. On our homeland, we fought a seven-year revolution, and a bloody civil war. We’ve faced natural disasters.

After 9/11, we overreacted to the threat of Islamic extremists by weakening our First Amendment rights with the Patriot Act. We launched wars in Afghanistan and Iraq. But, we didn’t come together as a nation. In fact, 9/11 threw gasoline on the fire of America’s already factionalized politics.

When Japan attacked us at Pearl Harbor in 1941, we came together as a people. There were a few who said we shouldn’t go to war, but the vast majority of our people got behind a global war against fascism. We sent our fathers, brothers and husbands off to war. Women worked in the factories for the war effort. Some were on the front lines with the troops. We rationed butter and sugar.

Our people knew hardship, and pulled together in common cause.

The question is: Will today’s America still pull together in common cause? Do we have the strength of character, the grit, to fight for something larger than ourselves? Could we again sacrifice for what we believe to be the right thing?

Our response to the Great Recession of 2008 showed us that in an American financial crisis, it’s every person for themselves, unless that citizen happens to be a financial institution.

When you think about it, do you still love Lady Liberty enough to fight for her?

To send your kids to fight for her?

And, do you think that we love her as much as Russians seem to love Mother Russia?

Sunday Cartoon Blogging – August 26, 2018

The majority of Americans under 18 live in households that receive “means-tested assistance” from the US government. In 2016, according to the most recent data from the Census Bureau, there were approximately 73,586,000 people under 18 in the United States, and 38,365,000 of them, 52.1%, resided in households in which one or more persons received benefits from a means-tested government program.

Those programs include the Supplemental Nutrition Assistance Program (food stamps), Medicaid, public housing, Supplemental Security Income, the Special Supplemental Nutrition Program for Women, Infants and Children, Temporary Assistance for Needy Families, and the National School Lunch Program.

And when the Census Bureau excluded school lunch programs from its calculations, the percentage of those under 18 who lived in a household receiving means-tested assistance (44.8%), still exceeded the percentage in any other age bracket.

We have now had four straight years: 2013 – 2016, during which a majority of those under 18 lived in a household taking means-tested benefits.

The primary reason for this is that most in this category are single parent households headed by a woman. Many can’t find employment paying a decent wage with some benefits. Many have to choose between full-time work and childcare. Some are working 2-3 part time jobs but still can’t cover their expenses.

But, the economy is good, the stock market is great, so why worry about these banana republic statistics, America? On to cartoons.

Trump sings the Lynyrd Skynyrd song, “What’s That Smell?”