The Republican Philosophy – One Giant Credit Card

Tax and Spend Liberals. If I had a nickel for every time I heard this phrase, I would be writing this post from an exotic hut with glass bottom floors somewhere in the French Polynesia. This negative connotation has been associated with the Democratic Party for several decades, and will be an effective talking point for elections to come. The irony: I would much rather be a tax and spend liberal, then a free charging conservative.

Recently I had a conversation with a friend whose number one disagreement with the current Democratic candidate was his commitment to let the Bush Tax Cuts expire (one might ask, why were the Bush tax cuts passed with an expiration date?). This, in essence, would be raising taxes.I followed up with a question regarding the consequences of deficit spending; their response, “government needs to be cut.”

There is not one current presidential candidate who shares this conservative ideology. Although Obama’s proposals are beyond McCain’s in cost, McCain’s proposals will increase deficit spending much faster that of Obama ($5.7 trillion to the national debt over the next decade -- source: CBO). Why?McCain is proposing vast tax cuts including voiding the AMT, doubling child credits, and lowering the corporate bill. This would be like cutting my salary by 20%, and not changing my spending habits. Needless to say I would rack up vast amounts of debt forcing me to leverage every asset I could to support my current lifestyle.

Think of the national debt as one giant Black American Express. Where does this limitless credit card come from? This is the scariest question of them all.We are currently expanding our money supply by borrowing from foreign countries. We are allowing Saudi Arabia, Japan, and China to become our shareholders. So, during this Olympic season when you are complaining about China’s human rights violations, just remember they are making our mortgage payments.

Looking at the last four presidents, government spending increased 36% under Reagan, 17.2 % under Bush I (only 4 years – 34% for 8 years), 21.2% under Clinton, and 32.4% under Bush II. What is most interesting from this comparison is that the economy was expanding at the fastest rate under the Clinton administration, providing them with the strongest justification to increase spending (higher tax revenues). Yet it was the tax and spend liberal who balanced the budget and kept the National Debt basically stagnant his final year in office.

Two major consequences of a rapidly expanding money supply (national debt) are declining currency value and inflation. When your two dollar milk now cost three, or the gas prices skyrocket at the pump, thank deficit spending and a weakening dollar. This is exactly why economists call inflation “the hidden tax”. However, we should take comfort that the current administration has passed sizeable tax cuts to off-set these cost to households making more then 250,000 a year.

In the upcoming election when sizing up candidates, don’t be so quick to dismiss the tax and spend liberal. Just remember over the last 30 years it has been the tax and spend liberals who have made the most progress on limiting governmental spending, keeping the national debt in check, and maintaining responsibility with America’s money.

Five Reasons Obama/McCain Will Win

With the 2008 presidential election coming into play, I thought I would write five reasons why each candidate will win in November:

Barack Obama:

  1. Money.Money wins elections. Money allows the candidate to reach even the most remote constituents, and control the strategy of the election. Barack Obama is on course to raise more money from donors then any other presidential candidate. Even more remarkable, is his refusal to take lobbyist and PAC money. Many are projecting him to double the intake of opponent John McCain. Barack’s war chest will allow him to play in states previously deemed Republican strongholds. The most recent whisperings is that Obama is trying to putArizona, McCain’s home state, into play!

  2. Voter Turnout. Perhaps the most remarkable statistic in this year's primary season was voter turnout. The Democratic primaries recorded 40 million voters compared to 20 million Republican voters. It is fair to say that the main driver of the vast amount of Democratic votes came from a tight race between Obama and Clinton, however, voter turnout was astounding.

  3. State of the GOP. The GOP’s popularity is alarmingly low. Scandals over the past several years have predominantly come from the GOP side, and President Bush’s approval ratings are at an all time low. History shows that incumbent parties with low popularity numbers have a daunting task toward reelection.

  4. Voter’s number one concern. Barack is favored when the economy is America’s number one concern. Democrats have always been associated with a stronger economy. This can be attributed to two reasons: theory and luck. If there is one positive aspect of the Bush presidency, it will be the crumbling of supply side economic theory. Democrats have always followed a Keynesian approach to the economy, which offers a more stable solution to our economic woes. Luck is also a factor, as the association of a Democratic president controlling the White House through the tech stock boom of the 90’s offer voters a false sense of security.

  5. Lack of experience. I have been approached with concerns from friends and family about Barack’s experience. From my point of view this is one of his greatest assets. When the elections heat up, Obama will have more of McCain’s votes to scrutinize then McCain will have of Obama’s. Many political pundits believe this is exactly why Kerry lost in 2004. There is a reason that the last five of six presidents never served in congress. Compromise and activity are fundamentals of Senate members, each leaving a political trail that can be dissected and rehashed. Obama’s lack of experience also allows him to be painted as an outsider. With Americans disenchanted withWashington’s current political state, electing an official (McCain) deemed part of the problem is favorable to the inexperienced.

John McCain:

  1. Voter turnout (I know I put this for Obama):Over the past several elections Republicans are better at turning out the vote in November. This is largely due to the voter population and key constituents of the Republican Party. Many voters assume that the lower class would provide a boost to the Democrats, given their dedication to bigger government. This is incorrect. The dirty little secret is that the poor do not vote. Republican turnout is also strongest where needed most, in swing states.

  2. Independents. Rewind four years prior and you will find a very different John McCain. McCain was very persuasive in the Senate and deemed the title of Maverick. He worked across party lines and was the first to blast incompetent members of his own party and their policies. It was during this time that he won the respect of Independents, and has managed to keep their loyalty through his current positions. Independents are the sole group that determines the presidency, and McCain has their ear.

  3. Security. The GOP and John McCain are associated with stronger security. With the War on Terror resonating in voter’s minds, McCain is viewed as the candidate tougher on our enemies. The vast stance on Presidential visits to rouge nations between McCain and Obama is one disagreement that will be capitalized this election season.

  4. A Real American Hero. What US citizen is not enchanted with John McCain’s POW story? The son and grandson of Admirals, McCain comes across as the more patriotic candidate and a leader in times of fear and distrust. McCain will prey on Obama’s lack of military experience and paint his opponent as soft on crime and terrorism.

  5. Republicans are better at politics. From Swift Boat malice, to talking point propaganda, the Republicans are better at controlling the conversation. Their sales pitch is sweet and direct, while Democrats are more theoretical and not as constrained. Media outlets are Republican controlled and influenced. Cutting taxes, banning abortion, and stopping gay marriage are direct and unmistakable. WithAmerica’s short attention span, Democrats do not carry the ear of the voter long enough to explain their position.

There you have it, five reasons as to why each candidate will win in November. It will be interesting to watch the election unfold, and I am sure I will have many more posts in the months to come.

Guess Who's Coming to Dinner?

Opening up My Yahoo! this morning yielded quite a surprise. Mahmoud Ahmadinejad visited Iraq? The surprise was not due to the event, but the low attention paid by the conservative media. This event is a witness to how poorly we have progressed in Iraq.

A little history… In the Iraq – Iran contra back in the 1980’s, over one million Iraqis and Iranians lost their lives in a war which brought national attention. Guns were sold to Saddam Hussein to advance America’s denouncement of Iran. One of the more interesting photo ops was snapped, the then Secretary of Defense Donald Rumsfeld greeted Saddam in a friendly handshake signifying America’s support of the conflict. With our current involvement and the events leading up to the war, our press and presidency have portrayed Iraq as a longstanding enemy of the US. In the 2003 State of the Union address, President Bush’s reinvented “Axis of Evil” tied Iraq in with the likes of North Korea and Iran. How did the relationship of the United States and Iraq fall out of sync so quickly? The answer is Desert Storm, the early 90’s conflict between the US and Iraq in which Kuwait was proclaimed Iraqi territory.

When Iraq decided to repossess the small oil-rich country, they did so with the understanding that the United States would remain neutral in the takeover. What happened next was quite surprising to Saddam and the Sunni controlled government. The conflict was sold to the American public as a bloodied takeover by the Iraqis, when in reality the truth was less dramatic. The Kuwaiti defense was minimal at best, and the Iraqis met little to no resistance (some estimate that 200 died in the skirmish). Unlike our current Iraq war, this was actually about oil. Iraq wanted to take back possession of Kuwait and their rich oil fields (in the mid 1900’s, England decided to split Iraq and Kuwait and annexed the country), and America realized the increased scale and power Iraq would possess with the expanding commodity (actually, I am not sure we really understand the underlying driving force).

When the US became engaged in the conflict, Iraq must have felt betrayed by their previous ally and cowardly started firing scud missiles toward Kuwait and Israel. America’s offense increased (Operation “Desert Shield” became “Desert Storm”), and thousands of unequipped and poorly trained Iraqi soldiers lost their lives. America’s casualties numbered in the hundreds, with the majority resulting from accidental weapons malfunctions. Iraqi forces were driven back into Iraq, and the conflict ended as quickly as it began. This was the beginning of the third member of the “Axis of Evil”, as Saddam felt betrayed by the US and revolted against imposed UN sanctions later in the decade.

Fast forward to 2008: Iran has always been at odds with the US as well as with the Sunni controlled Iraq. Saddam, though a terrorizing dictator, was able to keep Iran suppressed and stabile in the region. The conflict between Sunnis and Shiites stems from thousands of years of in fighting and civil unrest. Through America’s influence, control in Iraq was transferred from the Sunnis to Shiites. The majority Shiites are now looking to avenge the Sunni oppression, with civil war appearing inevitable. Currently American troupes stand in the way of widespread chaos, offering stability. However, this proves a tough situation for the Sunnis, who fear retaliation from the majority power Shiites and their once bitter neighbor, Iran.

Enter Mahmoud Ahmadinejad. The anti-American dictator now possesses a greater influence within the new Government of Iraq. There have already been reports of Iran supplying weapons to Shiite extremists, a real problem for the US. Ahmadinejad’s growing relationship with Shiites defies America’s best interest, and is an alarming bi-product of the Iraq war. However, it not unreasonable to believe that this specific situation was foreseen and ignored by the White House in making the decision to go to war. Perhaps we underestimated the deep routed conflict between the Shiites and Sunnis, or downplayed the real possibility of civil war. Regardless Mahmoud Ahmadinejad is in Iraq, and He is there to stay.

Email to a Friend on Capital Hill

You seem quick to give up the crown. With McCain winning the Republican nomination, I am not so sure Obama can pull it off. He still has to get by Hillary, who I believe, would have even more trouble against McCain.I will take the idealist comment in a positive light, but its more then that. I am tired of partisan politics; I am tired of compromise not being the underlying principal of the congress. What I am really tired of is exactly what we need more of...shorter memories. I find it interesting the current flack that Democrats receive when Republicans have proven themselves even more inept at managing fiscal policy. Earmarks are out of control, and have been for the past decade. I commend your boss' work on this subject, but do not get caught in the trap of partisan rhetoric. I am sure, for the next couple of years, Democrats will mimic their opponents past behavior.But remember, I sat on the side screaming into an abyss through the previous six years when legislation such as the Medicare 2003 bill was passed, and from 05-06 when real legislation was replaced with pork. Does that justify the Dems actions? Probably not. But let's not sit on the side and convince ourselves that the Republicans would not be doing the exact same thing if they still maintained power.

There will be waste, I do not disagree with your comment. But realistically, what corporate entity is running at 100% efficiency? Not even my company would state that waste is not a problem. Short of running every federal agent through six sigma (joke), waste will be a problem. However, do not believe for a second that this is a partisan problem.

Government should be there to help the people it represents. Unfortunately, all I see is corporations being the true beneficiaries of recent legislation. And government should be very leery when dealing with business. Even the passed bill for the mortgage bailout did little to help the people, but much to cut the losses of the banks that undertook the risk. Talk about anti-capitalism. Or how about the fact that the largest buyer of drugs, pays the highest price...Adam Smith is probably rolling over in his grave.

Yes, Democrats might not make the Bush tax cuts permanent, but they never should have passed in the first place. They were based on conditions that were preposterous to begin with (ie. economy would continue at the trajectory of the 90's), and when in the history of the US have tax cuts ever been enacted in war time? I commend John McCain for voting against them. And let's be honest, how much does rolling back the Bush tax cuts impact 90% of the people? And no, I do not believe the Bush tax cuts served any real purpose, especially when discussing impacts on the economy. As far as the comment about looking forward to more tax increases...a solid talking point with minimal credibility. I guess the majority of the right sees the expiration of the Bush tax cuts as raising taxes, but I disagree. Its time for fiscal responsibility and balanced budgets, and though the Dems might not be perfect in this regard, I can not believe it can be any worse then the previous seven years. (I would love to discuss with you the hidden tax of inflation...)

This is not about saving the world, but helping those in need. I don't believe the Democrats have all the answers, but I will say they are a bit more transparent (you don't have to write me on this point, I know you probably disagree). But as Adam Smith was weary of large corporations, so am I (ironic I work for one of the largest). I believe that McCain is the front runner for November, but I take solace in the number of seats that will be picked up in the House and Senate. McCain or Obama are capable of running the country with my support, and even Hillary will be a vast improvement over President Bush. I must say, I like where this country is headed, which is the first time I have made such a statement in about six years.


-----Original Message-----
Sent: Wednesday, February 06, 2008 8:11 AM
Subject: Re: FW: Off to the Races...

Obama looks great, has it all to take it. Kenyan father, Georgian white mother. Father leaves them, works hard in some of our best universities, and takes a pro-bono type job after all is said and done. He's an inspiring, charismatic- leader type. I predict he will be the next pres. Only, I don't agree at all with his policies.
You're right, Dems want to give you the moon, but sometimes there are those that would rather not have the moon--they're shooting for Mars or beyond.

Anyway, this city will be completely different next year--just like when Clinton was in the WH and Dems in majority. I'm not looking forward to more tax increases--and more government organizations that proclaim they will save the world! They are wasteful, I've seen it, lived with those that work with them who also agree. You can be an idealist as a student when it's not real life, but as soon as you start paying the bills--quickly realize sadly, it is about capital.
So congrats to you on your win...and here's to 4, maybe 8 years of "uniting America".

Change in Control

As many of you have probably guessed, the change in the control of the House and Senate is welcomed by me. Oversight, balance, and hopefully bipartisanship will be restored to the federal government, in hopes that the divided America will champion both sides of the argument.

I have also discussed with friends and family the expectations of the new Democratic powers. Interestingly enough, other perspectives are a bit more extensive then mine. I suspect that Democrats will work with President Bush to raise the minimum wage, find common ground on immigration, and work out a plan to fix the Medicare system. For those who believe that the Iraq policy will be reversed, or that taxes will increase, you have watched one too many campaign commercials. There is a larger focus of the Democrats’ control of congress, November of 2008.

Waiting for the Clinton/Obama ticket (just guessing), Democrats in the House will be careful with their oversight. They will not cut funding for the Iraqi war to change policy, as was done withVietnam, and they will not use any pre-war miscalculations to punish President Bush. They will use their political soapbox to weed out corruption, and try to exploit findings involving their Republican colleagues. They will not try to pass any drastic legislation that will hurt their popularity with the moderate voter. Plus, the President maintains veto power, and will probably use it more than just once as in the previous six years. The Democrats will use their renewed power to restage committee heads, and bring legislation to the floor that benefits their agenda. The leadership might sponsor wedge issues that hurt the President’s popularity, like stem cell research.

I believe that the congressional changing of the guard is not a vote for the policies of the Democrats, but a referendum of the actions of the Republicans. Democrats have earned about as much “political capital” as Bush in 2004, and hopefully will maintain a better track record. As Jon Stewart put it, “Democrats played the role of the boy who left the room as his brother is punished for burning the garage down”. I am excited to see the power shift, and hopefully it will lead to a better America.

Humbled, and Unchanged.

One of the most controversial moves of President Bush’s presidency occurred last year. While Congress was on break, President Bush’s nominee of UN Ambassador slid in the back door. During the confirmation hearings John Bolton was accused of harsh treatment of his subordinates. His record was challenged by Democrats and Republicans alike. His nomination left committee not with a stamp of approval, but with a washing of hands. Sending the nomination to the full Senate allowed the committee to play the political game; support the President, but avoid responsibility for his decisions. Bolton was highly unpopular with the minority Democrats and the nomination was resented by the Republicans. The Ambassador’s hearings quickly approached winter recess, which came with no resolve. President Bush played an unusual presidential card, and placed the new US Ambassador without confirmation through an emergency appointment.

Due to the rules of such an appointment, Bolton’s Ambassadorship expires at the end of 2006. President Bush has asked the lame duck session of Congress, to renew the appointment alienating Democrat’s opposition. This interesting political move might backfire on the President. With Republicans crippled by the policies of the President, such a controversial nomination will become a wedge to the congressional body. Even if the nomination is approved within the next two months, Democrats will look at this appointment as partisan politics. They will believe President Bush’s comments about bipartisanship and compromise a media event, with actions speaking louder then words.

If the Democrats Take Back Congress...

Any Fox Network viewer will tell you that the consequences for Democrats taking back the two houses of congress are catastrophic. Partisan fighting would continue, the war on terror would take a massive blow, and the possibility of presidential impeachment would loom. And though each of these concerns are unfounded and almost laughable (do you think the Democrats would impeach President Bush to put Cheney in power?), there will be some major changes that will occur.

The legislation that will be introduced “within five minutes,” as Nancy Pelosi notes, is the proposal to let the government negotiate drug prices. In a country seeded with capitalistic roots, how does the largest purchaser of drugs forfeit negotiating power? The very idea is perplexing. In 2003 when the congress passed a bill banning governmental negotiating, the idea was to let the third party insurance companies use their understanding of the industry to navigate prices. However, what happened next did not surprise the minority party. The drug prices paid by Medicaid/Medicare increased 10% a year since the law went into effect. Even more startling, the Veterans Benefits, which are not part of this legislation, buy their drugs at 50%-60% of the prices Medicare pays, though they purchase a fraction of the volume.

Yes, Big Pharma is worried; and rightfully so. They have already poured $500,000 in to Rick Santorum’s close race (the leading proponent of the 2003 Medicare bill), and multiple others across the country. If the Democrats do impeach President Bush, it will be long after drug prices drop.

(A great article can be found in the Wall Street Journal entitled, “Fearing a Democratic Victory, Drug Makers Fund Key Races.”)

Representative Tim Ryan

Representative Tim Ryan (D-Ohio)

Congressman Ryan makes a point concerning the torture bill being debated in Congress. Worth a listen.

Holy Shiite! The Sunnis have lost control...

As we continue to fight this global war on terror (actually, let me rephrase that), as we fight this war in Iraq it is alarming how many American’s have no idea of the power struggles between Sunnis and Shiites.

Who can deny that Saddam Hussein was an evil and malice dictator? However, would you be shocked to know that woman’s rights in Iraq, America’s relations with Iran, and partisanship in Iraq has become increasingly worse without Saddam?

Saddam is a Sunni, and Sunni’s are a minority party in Iraq. How, you might ask, if Sunnis are a minority power could Saddam remain as a dictator? Easy, fear. There were many attempts at taking Saddam out of power by the two other parties.The Kurds paid dearly for their attempt with the massacre fueled by chemical warfare. American’s determination to label this genocide is incorrect; Saddam was not interested in destroying the culture, but to send a strong message to those who opposed him. Shiites were just as scared, though they maintained the majority of the population, and watched the Sunni leader control Iraq for decades.

With Saddam out of power and the seeds of democracy now growing, the Shiites are using their majority to take back control. However, the Shiite’s are interested in intertwining religious ideals into their new constitution. One of those ideals is the lack of influence woman maintain in society. Iraqi woman can expect more oppression, less freedom of thought, and a non-existent role in any position of influence.

Over the course of Saddam’s administration, the Sunni controlled Iraqi government was at odds with Shiite dominated Iran. Saddam was a spoken enemy of Iran, and the Shiite Iraqis looked to Iran for strength and support. With Saddam removed from power and the Shiites now in control of Iraq, loyalties run deep and an alliance between the two great Middle East countries is being formed. Look past the soft media and you will find many Iran loyalists in the newly formed Iraqi government. America’s purpose of creating stability in the Middle East is being accomplished. Unfortunately it’s not the stability we were hoping for.

Another issue between Sunnis and Shiites is the great partisan divide that continues to widen. Shiites now in power are looking to avenge the many years of Sunni control over their nation. The problem with democracy in the Middle East is history runs deep and is not forgotten. Unlike America where the domination of power by one party can easily be ousted by the diversity of the population, Iraqis at the mercy of the united Shiite citizens. Many Sunni delegates have walked away from the new government in complete dismay because the Shiites propose and ratify legislation that opposes their group. This discontent between these two cultures is also what is sparking a civil war.

As we continue to watch Iran speak with more confidence and less remorse, know that we have made their position stronger by providing a friendly neighbor. The Sunni-controlled Iraq is history, and history the Shiites will not forget.

(There is a great article in the NY Times titled, "Can You Tell a Sunni From a Shiite?")

What’s up (or down) with the gas prices?

Could our two oil executives who are running America actually have some impact on gas prices? Recent polls seem to suggest this idea, with the majority of American believing that the recent uncharacteristic dip in gas prices is the basis for some conspiracy theory. And why not? Gas is down a dollar a gallon in most neighborhoods to the delight of all Republican candidates.

However, the reality that gas is impacted by the commodities market is not easily understood. Investors buy future commodities much like they do other investments. They buy on speculation that the prices will rise, and sell to realize a profit. One of the reasons Southwest Airlines has continued to realize profits, is largely dependent on how they have managed their oil portfolio. Many investors bought oil at a high price speculating that another hurricane might damage the oil supply from the Gulf of Mexico (where 25% of our oil supply comes from). With no real hurricane activity coupled with the ending of summer travel months, demand has decreased and negative speculation has brought skyrocketing gas prices back to earth.

Will these prices last? Most likely no. When demand rises, and the commodity markets begin to return confidence to investors, gas prices will again increase. For the time being, Christmas has come early for Republicans, and they are playing the Santa role bringing the gift of gasoline to America.

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