Friday, August 26, 2011

Republicans want America to fail

Today on CNBC in an interview with Maria Bartaromo, Nuriel Roubini said that it made no difference what economic proposals Obama made because the Republicans would oppose anything. He said they want the economy to be as bad as possible because that helps their election chances next year. So Roubini thinks the Republicans want America to fail. How terrible!

It is not unlike what Paul Krugman says in his NYT column. He said Bernanke is less likely to move aggressively to support the US economy if Rick Perry is going to call him a traitor for doing so.

The upshot is that the Republicans are willing to propose actions to push the US into a depression, or block Democratic actions to avert a depression, just so they can defeat Obama in the 2012 election. How disloyal to this country can you get! And how insensitive to the suffering of their jobless fellow citizens!

Tuesday, July 26, 2011

How We Got into Libya.

The Europeans wanted to get into Libya. To a certain extent, it's their backyard. I thought the Israelis too wanted us in, but now I'm not so sure. The impetus for Bernard-Henri Levy's Libya visit may have been more French than Jewish. Clinton and Rice wanted us in because of Rwanda. But the deciding factor may have been the unexpected votes by the AU and the UN. They called our bluff and said go ahead and support the rebels.

Debt and Global Waming

Republicans want to cut debt so that their children will not be burdened. But then they are against doing anything to counter global warming, which means that their great-grandchildren probably won't survive anyway, at least not in a lifestyle that looks anything like ours today.

Thoughts on Reading "Obama's Wars"

People talk about how Afghanistan invaded the US, because bin Laden trained there. But that's like saying some empty building is responsible for a drug killing because the drug gang met there. The gang is the problem, not the building. 9/11 was really a criminal matter, not a military one. But Bush and Cheney were probably right that the American people wanted a big military response, especially since all the hijackers died,and there was no one to hold legally responsible except bin Laden.

Woodward's book emphasizes the importance the whole Obama administration placed on naming McChrystal as Afghanistan commander. When he had to be removed it must have been devastating.

Bush, after invading Afghanistan with a few special forces troops, sent in a few regular troops, and then basically abandoned the war to start a new one in Iraq. The one thing he needed to do in Afghanistan was find bin Laden, but he failed to do it. He left a rump American force there with insufficient guidance and resources. This was terrible for the military, essentially assigning them to a waste of.lives and money, with no possible desirable outcome. Obama gave the military the chance to make something out of Afghanistan, but it's questionable whether that is possible. In any case, so far the military has failed to make progress, even with more resources.

When Obama began to focus on Afghanistan, he and his advisers began to give Pakistan a higher priority as a threat to US interests. Thus, the strategy for Afghanistan was controlled by what effect it would have on Pakistan. Seen this way, US policy for the war was backhanded, sort of like pushing on a string. And Afghanistan once again was second fiddle to another country, this time Pakistan instead of Iraq.

Underlying the debate is the military's need for a war to justify it's existence. The military gets a lot more money, power and attention in wartime than peacetime. So, it's not surprising that it would encourage any war for any reason.

Letter to Veterans Committee

Is Veterans' Committee Chairman Miller a military veteran?

As a Vietnam veteran I ask, because press reports, including a recent email from the American Legion, indicate that this Congress wants to drastically cut veterans benefits.

It sounds like Chairman Miller is from the Pensacola area. When I was growing up, the Pensacola Naval Air Station was one of the most important things around Pensacola, but I find it is not mentioned in the Chairman's bio. I grew up in Mobile, Alabama, and my mother and I used to shop at the Naval commissary while my father was serving in the Army in Korea during that war.

It is terrible that this Congress is attacking veterans as dead and wounded veterans come home from two wars in Iraq and Afghanistan and some kind of military action in

Wednesday, July 20, 2011

Elizabeth Warren Redux

I am very disappointed with President Obama's decision not to nominate Elizabeth Warren as head of the new consumer protection agency. She is one of the few people in Washington that I respect and trust. Obama's decision to pass over her for one of the deputies she hired shows cowardice in the face of Republican opposition. To me, coming simultaneously with the fight over the debt ceiling and budget deficit, it illustrates the failure of the two party system.

I have seen in the news that Elizabeth Warren is considering a run for the Massachusetts Senate seat held by Scott Brown. I can't imagine why a woman with her high moral character would want to join a corrupt, dysfunctional body like the US Senate, but she could only raise its standards. Nevertheless, she surely would have been more useful as head of the consumer agency.

The consensus seems to be that Congress will come up with some way to raise the debt ceiling, whether the minimalist Mitch McConnell approach to raise the ceiling but do nothing about the budget, or the gang of six maximalist approach to make huge modifications to the budget. Because I have no confidence in Congress, and because Congress has dithered until the last minute, I do not expect anything important to come out of this mess. I don't see how it can reform Medicare, Social Security and the tax code in less than two weeks.

I am hopeful that the ceiling will be raised somehow so that the US does not default on its debt at the same time that Europe is facing much more substantive debt problems. Europe has to deal with the future of the entire Euro zone, while the US is tied up in knots over a simple procedural issue. But the two together could bring down the world economy, or at least transfer world leadership from the West to China.

Monday, July 18, 2011

Swift Boat Vets Don't Love the Troops

I am not happy with all the talk by Republicans (and Democrats) about how much they love the troops. As a Vietnam veteran I did not get a particularly heartwarming welcome home. The main welcome I remember is that Continental Airlines offered me a free drink flying from Fort Lewis, Washington, where I separated from the Army, to New Orleans, on my way to Mobile.

The most anti-veteran thing I remember was Swift Boat veterans ads that the Republicans ran against John Kerry when he ran for President. Although it was directed at a fellow Swift Boat veteran, Kerry, it was really an attack on all veterans, particularly against Vietnam vets. It ironic that except for pilots and Seal teams, Swift Boat vets have been the only Navy vets who have actually fought the enemy since World War II. I think most Navy personnel killed or injured in Iraq or Afghanistan are medics assigned to Marine units.

In retrospect, I think the attitude of the general public toward Vietnam veterans coming home was that the Vietnamese should have killed the returning vets. They thought that would have been more just, because Vietnam vets were perverted baby killers. Those who didn't go -- Clinton, Bush, Cheney -- felt they had to condemn Vietnam vets, because otherwise the draft dodgers would have looked bad. They weren't necessarily cowards, but they were selfish, not willing to serve their country.

As a result, Vietnam vets have something in common with low ranking German Nazi vets, who fought in WW II because they had to, and they fought for the guy in the foxhole next to them, like the troops in Afghanistan, not for any Nazi ideals. But they will forever be branded as low grade war criminals. That's more or less how those who didn't fight see Vietnam vets. It was particularly hard on minorities and less educated vets, who were drafted or volunteered in disproportionately large numbers because the more advantaged youths refused to go.

Wednesday, July 13, 2011

Do Republicans Understand Debt Crissis?

Republicans don't seem to understand the difference between incurring debt and paying it off. The debt ceiling is about paying off existing debt. If we don't pay it, it is like not paying a credit card balance. The credit card company is going to charge you lots of fees and higher interest and will probably refuse to lend you any more money. What Republicans are worried about is continual charging on the card, running up a bigger and bigger balance. The answer is to stop charging, not to stop paying. Once you have a huge bill, it is hard to figure out how to pay it off. It is a much longer and tougher job than just making a payment each month. They need to keep paying the bill, and then work on a budget.

Thursday, June 30, 2011

Republicans vs. Elizabeth Warren

The Huffington Post reports that the Republicans will keep both the House and the Senate in session. Basically, Obama asked for this yesterday. The question is whether they will do anything. Huff Post thinks somebody will just appear on the floor every few days and make some meaningless statement to keep the session active. If so, it will be meaningless for the debt crisis.


Another result, however, will be to prevent Obama from making recess appointments, in particular of Elizabeth Warren. I find it significant that the Republicans and big business are so afraid of her. I think she is just someone who supports the average American. It means to me that the Republicans and big business must really hate the average American. They succeed by following P.T. Barnum's saying that "There's a sucker born every minute."

Monday, June 20, 2011

Letter to Senators and Congressman

As you discuss tax reform, at the top of your list should be eliminating the capital gains tax. In general, capital gains should be taxed as ordinary income. It is the main reason that many wealthy people pay a lower tax rate than ordinary people. Warren Buffet often cites the example that his secretary pays a higher tax rate than he does. Basically the capital gains tax is welfare for billionaires.

Yesterday, former Reagan budget chief David Stockman called for reform of the capital gains tax on Fareed Zakaria's GPS program on CNN. He said that it made some sense when inflation was high, so that capital gains merely reflected inflation and not an increase in the real value of an asset. But today, there is virtually no inflation. The other justification is that it encourages new business. There is some basis for that. Perhaps, people who start their own businesses and true venture capitalists should get some kind of tax break to encourage them, although most venture capitalists are multi-millionaires. But someone who buys Apple stock at $200 and sells it a year later for $300 hasn't really encouraged entrepreneurship. A favorable view is that he made a good investment; a less favorable view is that he was just gambling and made a winning bet. Why should this country encourage gambling over doing a hard day's work as an engineer or waitress?

Earlier, I wrote you suggesting the gradual elimination of the home mortgage tax deduction, because it unreasonably favors homeowners over renters, especially if the homeowners paid no money down and have no equity in their homes. They are essentially renters, but get a homeowner's tax break. It might be fair to continue the deduction for people with substantial equity in their houses. Building up equity is the saving which the deduction was originally intended to encourage. But the subprime housing crisis illustrated the economic dislocation that the tax deduction helped create.

Wednesday, June 15, 2011

My Meeting with Kissinger

Kissinger's new book "On China" reminds me of the only time I met him. As a young Foreign Service officer on his second assignment, I was working in the State Department INR watch office, which monitored incoming intelligence reports. While he was Secretary of State during the Ford administration, Kissinger was holding Middle East peace talks. One quiet Sunday afternoon while Egypt's Sadat was in the US, we got a highly classified intelligence report that there was an assassination plot against him. We in the watch office and the operations center debated about whether we needed to tell Kissinger, who of course was in negotiations with Sadat. We decided we should tell him. He was in the State Department building, and his secretary said to come down and brief him.

Because the report was so highly classified, State Department rules were that you had to carry it in a locked briefcase, even if just walking a few yards from the Operations Center to the Secretary's office. So, I took my locked briefcase down to Kissinger's office. His secretary said he was meeting with Assistant Secretary Phil Habib in a small conference in the back of his office suite, where they were discussing the peace talks with each other. I went back and found them. I started unlocking my briefcase to show them report, and Kissinger said, "Just tell me what the report says." So, I said, "There is an assassination plot against Habib." Phil Habib looked up at me incredulously, and I said, "No, no, I mean against Sadat." And they said something like, "Okay, thanks." and that was it.

Sadat, of course, was not assassinated then and not for several years afterwards, but he lived under constant threats of assignation for all those years. As far as I know, Phil Habib only lived under an assassination threat for about ten seconds.

Wednesday, June 08, 2011

Raise the Debt Ceiling

I am aghast that the US government continues to threaten to quit paying interest on its debt. While it is mostly Republicans, the straight vote last week in the House on whether to increase the debt ceiling was defeated with many Democrats joining the Republicans. I thought this was terrible. The Republicans said it was just a joke for show and that Wall Street was in on the joke. Afterwards, bond prices rose and interest rates fell, indicating that Wall Street was not concerned. I don't get it.

This Reuters article says the Chinese are concerned. It would seem that we should be concerned, too, if only because the Chinese hold $1 trillion of our debt. In theory we have the Chinese over a barrel because of the old MAD theory (Mutually Assured Destruction). If the Chinese destroy the US dollar, they lose their trillion dollar investment. But in this case, the US is threatening to take the first MAD step by destroying the value of its own currency.

The Republicans say that maybe nothing bad will happen, that the US can stop paying interest for a few days or weeks and then, when the budget negotiations are finished, it can start paying again like nothing ever happened. Maybe. But the Chinese analogy to playing with fire is apt. We don't know for sure what will happen, and we might burn our own house down. Why would we want to even risk the possibility of that?


Another possibility is that Treasury would take the money to pay interest on the debt from Social Security and government pension funds. As a retiree this really ticks me off. As a Vietnam veteran, I support shared sacrifice, but this is like the draft during the Vietnam war and voluntary military service in Iraq and Afghanistan now. There is no shared sacrifice. Only the fools sacrifice because of some insincere patriotic appeal, like Sarah (Paul Revere) Palin's. Sarah Palin gets rich, while the redneck grunts in the Middle East die. In this case, the ordinary retirees will sacrifice so that we can pay interest to Chinese millionaires and American billionaires in New York who wouldn't lift a finger to defend the US, although they were the ones attacked on 9/11.

Wednesday, May 18, 2011

Coburn Withdrawal Bad Sign for Debt

Sen. Tom Coburn's withdrawal from the gang of six working on the budget/debt ceiling crisis is a bad sign. I was never convinced that he was committed to the process, but now he certainly is not. He probably came under heavy pressure from his fellow Republicans to drop out. They probably plan to push the debt ceiling issue to the limit. Pundits say it may not destroy the country, but there is a possibility that it might. As somebody said today, why would you want to test whether it will destroy the country, if there is even a slight possibility that it might, and if you could easily avoid doing so.

Yes, we need to bring down the deficit and start paying down the debt, but we shouldn't default on our debt payments and undermine our credit in the process.

Saturday, April 30, 2011

Why Aren't We as Brave as the British?

I apologize for the disjointed letter posted previously.

I was prompted to write it by the movie "Mrs. Miniver," which I watched a while ago. It is about an upper middle class family in England from the period just before World War II until well into the war. The movie was made during the war, and on TCM, the "The End" screen said something like, "America needs your money. Buy bonds." In the movie, before the war the British husband and wife are somewhat extravagant, the wife buying a silly hat and the husband a fancy car. But once the war starts they get serious like real Brits. They make sacrifices while keeping a stiff upper lip.

I thought that same attitude was somewhat illustrated during William and Kate's wedding. Queen Elizabeth is a living link to the sacrifices made by Brits during World War II and the London Blitz. Today Britain and the United States both face financial turmoil due to the sub-prime mortgage meltdown. The Brits under PM Cameron have elected to pursue a course requiring more sacrifice that the US has. That's more in the British character than in America's.

In Ben Bernanke's press conference, we saw the competing themes of fighting inflation versus reducing unemployment. The Brits are more willing to endure the hardship of unemployment in order to get their financial house in order than the US is. We see Americans unwilling to sacrifice anything, even small cuts to Medicare benefits on the one hand, or higher taxes on the other. We need spending cuts and higher taxes, but nobody is willing to make the hard choices that calls for.

I like Ben Bernanke because he is one of the few people in Washington facing these hard choices and doing something. People say he is just following in Greenspan's "easy money" footsteps, but I don't think so. He is facing a very different situation. I like Elizabeth Warren because she also seems to have the moral character, so lacking in Washington, necessary to face these hard choices. She has staked out a little issue, making businesses deal fairly with consumers, and has been met with a buzz saw of opposition from big business.

After I watched "Mrs. Miniver," I thought, "Well, I could buy some bonds." The Japanese do it. Their indebtedness is one of the highest of any major nation, but it is not like our debt to China, because the Japanese owe it to themselves. They buy their own bonds. So, why don't we? First, I found that it is hard to buy US savings bonds. You can't buy paper bonds anymore. You can only buy them electronically and store them on some Treasury web site. With changing email addresses, lost passwords, etc., that is a recipe for disaster for me. I don't mind electronic banking, as long as there is a real, brick bank somewhere that can send me a paper statement if I want one.

While it has gotten harder to buy savings bonds, it has gotten easier to buy Treasury bonds through a broker. That change illustrates how our economy favors the rich over average citizens. You can put thousands in your 401(k), but you can't buy a $25 savings bond for your kid's birthday. But, why not buy bonds anyway? Right now the problem is that the US Congress refuses to put the full faith and credit of the United States behind the bonds. They are going to bicker over raising the debt ceiling, and leave open the possibility that they will default on US bonds. If they were serious about solving the debt crisis, they would immediately raise the debt ceiling, if only by a little bit, so that there is no risk of default, and then begin the process of cutting spending and raising taxes. But some groups want to use the debt ceiling as a bargaining chip. It is sort of like saying, "If you don't agree to my terms, I will blow my brains out." The terms may be stupid, but no one wants to see someone else blow his brains out, especially if "he" is the country we live in. In Vietnam the old saying was, "We had to destroy the village to save it." Are we now going to say this about America?

Raise the Debt Ceiling Now

Letter to Congressman and Senators:

Right now I feel that there are only two people in Washington who have my best interests at heart, as a middle class citizen -- Elizabeth Warren and Ben Bernanke.

The fact that big business is so opposed to Elizabeth Warren indicates to me that she must be doing something right for average citizens. Normally, Ben Bernanke, as the head of the Fed would be the tool of big business interests, but I think he is genuinely concerned about average people, too. His low interest rates and QE2 are boons to big business, especially big banks, but they are the only tool he has. I think he really is trying to pursue policies that trickle down to ordinary people, even if most of the benefits go to big banks and industries.

If Congress were serious, it would raise the debt ceiling now, if only by a small amount. The fact that it is playing chicken with the debt ceiling indicates that it does not have the best interests of the United States at heart. Failure to put the full faith and credit of the United States behind our bonds will mean higher interest rates for everybody and probably a return to a deep recession. Conservatives, playing the hand of big business and big banks, will use the crisis to get spending cuts without tax increases, generally hurting average people, and particularly benefiting the very rich.

To reduce the problem with the national debt and the fiscal deficit, I would propose to cut all Federal salaries by 10 percent (including yours) and all Federal pensions (including mine) by 10 percent. Perhaps you could cut all Social Security pensions by 10% above a certain level, say $1,500 per month. For Medicare and Medicaid, perhaps you could cut payments by 10% for all procedures that cost more than $1,500.

I would propose removing the mortgage interest deduction as a start for raising tax revenues. This deduction had a very perverse effect during the housing crisis. Before sub-prime mortgages, when people still had to make a large down payment, the deduction was not so bad. But with no down payment and mortgages allowing interest-only payments for the first few years, buyers basically became renters, who are now walking away from their homes. Real renters got no deduction, but sub-prime buyers had a big Federal subsidy. It was not fair, and it encouraged an unsustainable housing bubble. It's bad policy which creates economic dislocation. Get rid of it. You could start off limiting the deduction to $10,000, and then reduce it $1,000 per year.

I don't really expect anything to happen. This government is dysfunctional. I lived in Brazil for several years as an American diplomat during its bad years, and saw people who wallpapered some rooms with the old Cruzeiro currency. That's where the dollar is heading. Brazil shows that you can recover from that, but only if you get serious. The US is not serious, yet. People used to say that Brazil was not a serious country. Now that epithet applies to the United States. After the game of chicken we just played on shutting the government down, the new game of chicken on the debt ceiling, and the decision during the Congressional lame-duck session not to raise taxes on anyone, especially the very rich, I have become one of those in the recent poll who has a very dark view of the American economy and even of America in general. As a Vietnam veteran, a retired Foreign Service officer, and a former attorney for the Veterans Administration, totalling nearly 30 years of government service, I am very disappointed in where the US is heading.

Saturday, April 23, 2011

People Who Walk Away from Their Houses

The Washington Post reports a new trend of people walking away from houses that they own. It misses the whole point, however. The problem is that these people paid little or no money down. Their mortgage payments were just rent payments, and unlike real rent payments, these were subsidized by the US government in the form of the mortgage interest tax deduction. People didn't do this years ago because they had skin in the game, starting out with about a $30,000 loss for walking away from a $150,000 home. Now they have nothing to lose except their credit rating for a year or two. They'll go from owning a four bedroom single family house to renting a two bedroom apartment that they can afford. No big deal, except for the banks that made these stupid mortgages and the investors who bought them. The heads of these banks, like Jamie Dimon at JP Morgan-Chase, are either very stupid or crooks. I don't think they are very stupid. But it's good when you can bribe (lobby) the lawmakers to make your immoral shenanigans legal.

I still think Tim Geithner, Hank Paulson and company deserve a lot of credit for avoiding another Depression, but now I think Geithner, who was head of the New York Fed, is too close to his old buddies whom he bailed out. Wall Street is evil. It almost destroyed America and much of the rest of the world with it. Somebody needs to pay for what they did.

Friday, April 22, 2011

MTCR 2011 Meeting

I look at the Missile Technology Control Regime (MTCR) as sort of my legacy from my days at the State Department. I was one of the main links between the idea to create a missile non-proliferation regime during the Carter presidency, and its actually coming into existence under Reagan.

So, I'm happy to see that it still exists and is functioning, as reported by this press release from its 2011 meeting.

Thursday, April 21, 2011

Libya and Israel

The New York Times reported that Bernard-Henri Levy takes credit for persuading French President Sarkozy to enter the Libyan civil war on the side of the rebels. So how did that happen?

Part of the answer is what has been discussed in the press: The West -- particularly Hillary Clinton, Susan Rice, and Smantha Power -- felt guilty about how long it took for the US to interview in the genocide in Bosnia and Rwanda. They didn't want more genocide on their watch. Sarkozy is politically weak at home in France; some saber rattling would probably increase his favorability rating. I'm guessing Britain just went along with the US and France, and probably had some concerns of its own about genocide.

But I think there is more.

Levy is Jewish and proud of it. Sarkozy is something like one-quarter Jewish. The US is always under heavy pressure from Jewish lobbying. Israel would like to see instability in the Middle East countries that give it a hard time. Leading this category are Syria and Iran. Egypt and Mubarek, whom Israel liked, had already gone down the tubes. When Libya and Bahrain stood up to their protesters, it looked like the Middle Eastern spring opening might be in danger of being stopped before it could spread to countries where Israel wanted to see it overthrow the rulers, like Syria. So Israel encouraged the West through people like Levy and Sarkozy to stop Libya from putting down the protests there.

The NYT says that Levy was visiting Egypt and decided to go to Libya. Why? I think it's likely that the Mossad suggested he go, and set up the trip for him, which ultimately led to his meeting with Sarkozy, which led to the NATO/UN/West decision to support the rebels.

It's working. Protests are going strong in Syria, although the government continues to try to stop them. Assad may or may not survive. Not much has happened in Iran, but the protests throughout the Middle East put some pressure on it. It's not clear what effect the continuing civil war in Libya will have on Jordan and Bahrain, but they are lower priorities for Israel. Thus, to some extent, I think we are fighting (or giving air cover or whatever we're doing in Libya) for Israel. I think to a similar extent we partially fought the war in Iraq for Israel. Iraq with Scud missiles and possible WMDs was much more of a threat to Israel than to the US.

Wednesday, April 20, 2011

What About the Budget Deficit and the National Debt?

Anybody serious about solving the national debt/budget deficit problem has to consider both expenditure cuts and revenue increases. We should cut back some government programs, and we should increase some taxes. Until there is a serious debate about what to cut and what to tax, there is no serious effort to reduce the deficit/debt. S&P is right; the US is on a slippery slope towards bankruptcy.

On the expense side, people talk about Medicare and Medicaid, but they never mention doctors themselves. Many doctors are basically government employees with fees set by Medicare, but they earn much more than the average government employee, around $200,000 annually for doctors, compared with about $75,000 for federal government employees and about $50,000 for state government employees. Doctors who specialize in hot areas like cardiology or neurosurgery earn much more, often more than $500,000 annually. As a result, it is hard to attract doctors to lower paying, but more important areas like family practice. Somebody needs to come up with some original ideas for dealing with that, for example, using more nurse-practitioners to do triage, take care of simple things, and refer more difficult cases to specialists. Part of the problem is the cost of medical school. You can't ask students to incur thousands of dollars of debt for lengthy, expensive education and then take lower paying jobs. Government programs could subsidize medical education in return for an obligation to be a family practitioner, see "Northern Exposure." Also, one of the most expensive programs is the new drug assistance program under Medicare part D, passed under Bush. It is basically just a subsidy for the giant drug companies.

It's true that there is some unfairness about taxation. Some things are unquestioned duties of government: national defense, police, firemen, etc. Some are generally accepted and have been for a long time: public school teachers. Others are relatively new: extensive welfare programs. However, a legitimate comparison is how much people used to pay for these services and how much they pay today. Today, in general, federal taxes are much lower than they were fifty years ago, although they are higher than they were 100 years ago. A hundred years ago, people were still drinking milk with formaldehyde in it, starving to death if they fell on hard times unless some neighbor helped. If we are not rich enough to provide these services anymore, we need to have a debate what the most important services are and how we can maintain them. One area that has taken an enormous hit in recent years is education, particularly higher education, which has become more and more expensive. By cutting off universal access to higher education we are dooming ourselves to second class status among the nations of the world.

Wednesday, April 06, 2011

Wealth Distribution in America

This study on "Wealth, Income and Power" by University of Santa Cruz sociology professor William Domhoff contains much of the data that I was looking for regarding how wealth distribution has changed historically in the US. It has a political viewpoint, because in another study Professor Domhoff says UC Santa Cruz is "the most liberal public university in the country." My kind of place! He even uses the word "liberal," although in other places he uses the less lovely "progressive." I prefer a "liberal arts" education to a "progressive" education. Anyway....

The shift in wealth and income in America is not as great as I had thought, but it's significant. I like graphs, so here's one from the study:

It shows the current distribution of wealth between the top 1% and the lower 99% as about the same as 1920. It got worse in 1930, probably as a result of the Depression, and then went up considerably to 1950, probably as a result of recovery from the Depression and World War II. One effect of both factors was that the government virtually took control of the economy during that period -- first to help prevent poor people from starving and going homeless, and later to devote all productive resources to the war effort. Then there was a big surge in the 1960s and 70s, probably as a result of the government's war on poverty and civil rights efforts. The distribution started getting worse again in the 1980s when Reagan was elected. Reagan changed government policies and tax rates to favor the rich.

Government policies are very important. Both Republicans and Democrats understand this. Republicans like the general slope of the curve since Reagan began favoring the rich. They plan to fight to keep it moving in a direction that favors the rich. I don't think this is good for America. It makes America different from the country that I grew up in during the 1960s and 70s. I still believe that part of the goodness of America during that period was that all members of the "Greatest Generation," rich and poor, had fought together in World War II, which had imposed some self-restraint on the greed of the leaders of the country, a restraint that does not exist today. Significantly, Reagan, although he served in the military during WW II, did not fight; he just continued to make movies in California, albeit for the military while in uniform. George H.W. Bush was a much better representative of the Greatest Generation than Reagan was.

The fight over where we go from here may lead to a government shutdown. But from the looks of this graph, the last shutdown did not have much effect.