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Voters Send Conflicted Message to Washington: Fix this Mess but Don’t Mess with our Entitlements

In the last eight months, voters across the country have raised their voices loud and clear and have left official Washington in a political quandary. What to do about the economy, the budget deficits and the national debt?

Democrats were punished last November when Republicans effectively employed a Mediscare campaign strategy nationally. They attacked the overhaul of the nation’s healthcare system they dubbed Obamacare, telling seniors the Democratic plan that is purported to cut Medicare spending by as much as $500 billion dollars over a ten year period was an attack on their medical coverage. Although the savings were proposed to be the result of savings generated by cutting abuse and fraud, it did not stop the Republicans from demagoguing the issue.

Recently in a special election that took place in a so-called safe Republican congressional district in upstate New York that was once represented by Jack Kemp, the Democratic party candidate won by 4,700 votes. The district has 30,000 more registered Republicans and was considered a no contest until Republican Jane Corwin expressed her unmitigated support for the Republican congressional budget plan developed by Rep. Paul Ryan of Wisconsin.

In the face of these political setbacks, both parties seem more entrenched in their positions and policies than ever. Republicans want to double down on their call for budget cuts while at the same time demanding tax breaks for the wealthy and corporations, while Democrats are diametrically opposed and want to ease the budget problems by selective cuts and increasing government revenues by abandoning the Bush era tax cuts.

Both parties claim public support for their policies.However, neither party has come forward with a plan to address the number one issue facing this country: economic stagnation.Our economy needs a shot in the arm. In the face of record corporate profits, Republicans argue that it is economic uncertainty that keeps giant corporations and smaller businesses who are sitting on trillions of dollars in profit from investing in new equipment, and most importantly, new jobs.

How can this be? In the last 30 years, the federal government has done everything possible to allow corporations unfettered access to markets. The results have been staggering.  As millions of Americans face economic hardship and millions more are truly confronted by real economic uncertainty, American corporate profits soar. For example, in the final quarter of 2010, Walmart announced its profits grew by 27 percent. The company made $6 billion in profits in the fourth quarter, up from $4.8 billion a year before and $3.5 billion in the third quarter of 2010. During that same time, Home Depot posted a 72 percent increase in profits, as profits reached $587 million, up from $342 million a year earlier.

According to business writer, Andre Damon, “The discrepancy between revenues and profits is due to the fact that the “recovery” in corporate balance sheets is built on layoffs and speedup.”  In fact Walmart cut over 11,000 jobs at its Sam’s Club warehouse stores last year. Home Depot cut 7,000 jobs in 2009 and closed 34 Expo home design stores.

Corporations reported an annualized $1.68 trillion in profit in the fourth quarter of 2010. The previous record was $1.65 trillion in the third quarter of 2006.
Many of the nation’s preeminent companies have posted massive increases in profits this year; General Electric posted worldwide profits of $14.2 billion. JPMorgan Chase profits soared 47 percent to $4.8 billion.  Corporate profits steadily increased last year as companies continued holding onto record amounts of cash and other liquid assets while cutting costs, reducing wages, laying off workers and wringing more productivity from remaining staff, even as the economy recovered.  These record profits have resulted in US corporations sitting on a record $1.93 trillion in cash.

So, why is there trepidation by the business sector relative to the economic policies of the Obama Administration? Why have the companies we bailed out of the worst recession since the Great Depression not reinvested these profits back to the American people who pulled their collective butts out of the fire three short years ago?  Instead of investing, companies have used this cash to buy back their own stocks, a strategy that has enriched executives and shareholders at the cost of creating jobs.Is the jobless recovery a result of economic factors or partisan political tactics?

About Ronald W Weathersby

  • Baronius

    I don’t think it’s fair to describe the 2010 GOP strategy as Mediscare but to not use the same term to describe the recent Democratic House win in NY. And it’s not fair to either party to say that they’re not addressing issues of economic growth, when that’s one of the primary motivations for both parties’ budget and health care solutions.

  • Baronius

    Also, it’s unfair to mention the Democrat winning by 5000 votes without mentioning that the candidate running under the Tea Party label received 10000 votes.

  • http://handyfilm.blogspot.com handyguy

    When you consider that Chris Lee, the previous holder of that NY seat [the guy who Craigslisted his way out of office in record time one afternoon] won in Nov 2010 by a margin of more than 47 points [he got 74% of the vote], the accomplishment of the Dems in that district becomes clear, Tea Party spoiler or no.

    The Paul Ryan plan is pretty scary; so is the thought of Medicare going bankrupt. But the Ryan plan will never become law, and Medicare will never be allowed to go bankrupt. So the two parties are both playing to their bases, for short-term political gain.

    Fairness is rarely an effective political tool, and you can hardly expect the Dems to sit on their hands when an opportunity this juicy presents itself. The Ryan plan was a political miscalculation of epic proportions.

  • Baronius

    Handy, I’m not accusing the Democrats of unfairness; that accusation is directed at the author of this article. The weird thing is that he slights his own party (presumably) in the process.

    BTW, I’m going to have to steal the Chris Lee reference for Sobel’s thread.

  • Ronald W Weathersby

    The Tea Party candidate in NY has run several times in the past as a Democrat. Additionally as his support diminished the Democrats support increased.

  • Cannonshop

    ALL Politics is local when it gets to election time. Big, urban markets want free stuff, pols and parties that want to play in the big leagues better offer it, and (as you can see in some states-like mine, Washington State), the voice of the people IS very bipolar- we passed three initiatives in the last twelve years to require a supermajority vote to increase taxes at the State Level, then elected tax-increase-desiring Legislators and Governors to Olympia with majorities ranging from 51% to 59%.

    Of course, the real message in that is thus: “Do it more EFFICIENTLY.” this message is entirely LOST on elected officials and the Bureaucrats who schmooze them. The state will cut the firefighters who battle forest fires, but spend millions on decorating the state-house with art nobody really gives a shit about, massive amounts of money go to administrations while they cut the provider-end of state services (firefighters, state cops, teachers, etc.) and the state spent millions blowing holes in five dams on the snake river that were there to produce electrical power and provide flood control in order to “save” a local population of a non-endangered food species of fish, that has been declining in part because of the reduction in Logging (which used to provide money for schools) enacted in order to ‘save’ a local population of a non-endangered species of owl that wasn’t even threatened-at the time (and after) nobody bothered (at the official level) to wonder how, or where, replacement funding would be coming from.

    go figure.

    Altruism has a financial cost. Public Altruism inflicts that cost on the population at large, and should probably not be pursued unless the benefits outweigh that cost.

    Politicians don’t understand this, regardless of their party, and the ones that seem to always forget it when they get that taste of power. Unfortunately, voters don’t seem to get it on the collective level either, so you end up, after a while, with “entitlement” thinking sharing a bipolar relationship with popular demands for austerity.

    Eventually, something HAS to give, and usually when it does, there’s a big-as-hell mess to clean up.

  • zingzing

    washington state’s a weird place, cannonshop. so left toward the coast, so right toward the eastern border. frankly, most of the state is an ugly wasteland. but when it gets beautiful, it does so well. that said, it’s politics are ridiculous. i wonder what’s happening with the 99 overpass right now. prolly the same shit was happening 5 years ago. maybe i’m wrong. hope so.

  • Baronius

    Zing, aren’t most states bipolar in the same way? Illinois has Chicago versus “upstate”. California has LA and SF versus Orange County and the less-developed areas. Texas has only one really liberal city, but the rural areas are conservative. Pennsylvania’s been called Philadelphia in the east, Pittsburgh in the west, and Alabama in the middle.

  • Glenn Contrarian

    Baronius –

    I don’t think it’s fair to describe the 2010 GOP strategy as Mediscare but to not use the same term to describe the recent Democratic House win in NY.

    It’s not the use of the term – it’s the hypocrisy of those who used it! The GOP accused the Dems of wanting to destroy Medicare…which was NEVER in any Dem party platform or any statement by any Dem politician…

    …yet the Dems’ accusations of the GOP wanting to destroy Medicare turned out to be absolutely true!

    The GOP said the Dems were going to destroy Medicare when it is the GOP that has wanted to get rid of Medicare all along (and backed it up by voting almost in lockstep for the Ryan plan). This is hypocrisy in its purest form. One party’s accusations were utterly hypocritical, and the other party’s accusations were not only NOT hypocritical at all, but entirely accurate.

    That, Baronius, is the difference.

  • Glenn Contrarian

    zing –

    washington state’s a weird place, cannonshop. so left toward the coast, so right toward the eastern border. frankly, most of the state is an ugly wasteland. but when it gets beautiful, it does so well. that said, it’s politics are ridiculous. i wonder what’s happening with the 99 overpass right now. prolly the same shit was happening 5 years ago. maybe i’m wrong. hope so.

    It’s the same as always – the more urban areas are more liberal, and the rural areas are conservative. When it comes to the Alaskan Way Viaduct, it looks like it’s starting to come down this summer and the tunnel is going to be dug…and I think that’s a great thing! The waterfront will be MUCH nicer (and a better moneymaker!) and we won’t have the possibility of what happened to the people who were driving under the double-decker freeway in San Francisco when it collapsed in the earthquake way back when. I had a friend who told me about how he helped clean up and dig out the bodies – imagine digging a body out of a car when nothings thicker than the height of a license plate. When I was commuting to Seattle, I hated walking under the viaduct for that reason.

  • Glenn Contrarian

    Cannonshop –

    California’s education system (and particularly their very inexpensive university system) used to be one of the best in the nation…until Prop. 13 passed, which required a similar supermajority to raise taxes when needed. Now California’s educational system is a joke.

    You get what you pay for…and what most Republicans don’t get is that we’re ALREADY paying a smaller percentage of our income in taxes than we have since 1950!

    Cannonshop, I can understand not wanting to pay too much in taxes – of course I understand! BUT I also understand that if the government does not take in enough tax revenue, then the government will not be able to do what it needs to do in order to keep the nation functioning (and the same is true of state and county government tax revenue).

    You get what you pay for – and while you may not like government, if you ‘starve the beast’ as some GOP pols claim to want, then all you’re doing is ENSURING that the government is even less able to do its job…

    …and what happens then? The GOP pols will say, “See – government’s not working! Let’s cut taxes even more!” The best way to make sure someone can’t do their job is to take away that person’s ability to do the job…

    …and the same thing is true with government. Cut taxes too much, and you take away the government’s ability to do its job…and whether you like it or not, Cannonshop, you DO need the American government to be able to do its job.

  • Leroy

    Good article, Ronald.

    When voters say: “Fix this Mess but Don’t Mess with our Entitlements” they are being absolutely sensible. There is no reason to sacrifice entitlements to fill in the potholes mess that business and our privatized government agencies have caused.

    Entitlements didn’t cause our financial mess so there is no good reason to sacrifice entitlements to bail-out those messes. In fact to do so would be a betrayal of trust.

    Nevertheless, there is a powerful rightist faction that hates entitlements, especially social security and medicare because they work and give the lie to the assertion that no public program can ever work, so they have a vested political interest in undermining entitlements. The wise citizen will not be fooled by such tricks.

  • zingzing

    “Zing, aren’t most states bipolar in the same way?”

    not quite in the way wa state is. even the urban areas in the east are red. proximity to idaho or something.

  • Glenn Contrarian

    zing –

    I agree – we are bipolar. I’d love to see which side of the state pays out more and which side receives more in the way of taxes…because blue states generally pay out more in taxes than they receive, and red states generally receive more than they pay out…and the reds, of course, tend to complain much more loudly about their tax ‘burden’.

  • Cannonshop

    #14 When you’re making that disntinction, Glenn, keep in mind what percentage of your blue states are directly controlled (territorially, and thus, resources-wise) by teh Federal Government versus the percentage of land and wealth controlled in Red States.

    When upward of 80% of the land area’s in Federal Hands, a LOT of money is going to maintain that control, and a proportionally smaller amount of wealth is generated in that state’s borders.

  • Cannonshop

    So… Leroy, what y’r sayin, in essence, is that, as entitled citizens, we should expect the per-child tax-credit, the new house tax credit, etc. back even when there’s not only no money in the kitty, but there’s no economic crisis either? Should we expect a shiny new stimulus cheque as well?

    Even when the economy is in good shape?

    even if the only backing is a load of debt?

    OR, does that only apply to “entitlements” that you, yourself are taking advantage of?

  • Glenn Contrarian

    Cannonshop –

    Nice try – really, nice try. So now the government’s at fault for there not being enough cities in red states?

    No, I know that’s not what you were saying…but it’s cities that generate the lion’s share of income. Not farms, not mines, not logging, not even oil-drilling

    To give you an example, there’s supposed to be about 10.4 billion barrels of crude waiting to be pulled out of ANWR, right? Now let’s say that it’s still worth $100/bbl on the open market. That’s a little over one trillion dollars, right? That’s certainly a LOT of money.

    But New York City ALONE generates 1.4 trillion dollars annually.

    The total income from ANWR is a one-time thing. One trillion and done.

    NYC’s gross metropolitan product is 1.4 trillion dollars. Every. Single. Year. And unlike Big Oil, which pays little or no taxes anymore, taxes ARE paid on much of that money flowing into and out of NYC.

    So…no, Cannonshop – even if there were NO government control of our open lands, even if your Koch brothers got to rape, pillage, and plunder what used to be our national parks and reservations and national forests, the tax revenue would not compare to what is drawn from major urban population centers.

    BTW – it’s for this reason I think eastern Washington’s not paying too much to support Seattle – it’s the other way around.

  • Cannonshop

    #17 It might occur to you, Glenn, that I think the cities ARE paying way too much, but step out of your east-coast-urban mindset for a moment and consider what turning huge chunks of the country into a tourist trap does to the people who live there.

    I grew UP in that, the poverty of the Deep South is self-imposed, the poverty in Rural Colorado, New Mexico, Wyoming, etc. is imposed from outside-from Washington D.C.

    there’s a big ass difference there.

  • Glenn Contrarian

    Cannonshop –

    #17 It might occur to you, Glenn, that I think the cities ARE paying way too much, but step out of your east-coast-urban mindset for a moment and consider what turning huge chunks of the country into a tourist trap does to the people who live there.

    And that’s the BIG strawman of the Republican party and the Tea party. Why? Because we’re all paying less in total taxes now than at any time since 1950:

    Federal, state and local income taxes consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010.”

    This isn’t the first time I’ve pointed this out on BC…but I have YET to see a BC conservative tell me exactly how it is we’re paying waaaaay too much in taxes when we haven’t had such a low tax burden in sixty years.

  • Leroy

    16-Cannon: ALL citizens are entitled, not just a privileged few. That’s what you don’t get. You seem to think that only a minority are entitled to good roads, fire safety, hospitals, medical care, etc. Do you share the view that such things are so expensive that society can only afford to provide them for a few, a privileged few, possibly only those who have demonstrated special fealty to The Leader? That’s feudalism.

    In modern societies we don’t deprive citizens of services because the services are too costly, but rather to manipulate and control people. That’s sinister.

  • Cannonshop

    #19 Just because we were overtaxed in the past, doesn’t mean we’re under-taxed now, Glenn.

    It just means we’re LESS overtaxed than we were in 1950, assuming the results of that study aren’t cherry-picked to tell a story.

    #20 Leroy, most roads are paid at the local level. The Fed doesn’t provide fire departments, hospitals, or medical care except to very narrow demographics (VA hospitals, for instance, don’t generally take people who aren’t at least close family of vets, Medicare has a bunch of rules on who can use it, ditto Medicaid).

    Fire Departments are paid (and largely staffed) at the local (or in some really generous cases, state) level. Ditto for Schools.

    Federal monies that come into those areas tend to be a microscopic dribble compared to the costs paid locally and really don’t help much.

    Would you like to try again, say, with something that FEDERAL TAXES DO PAY THE MAIN COST OF?

    Say, for instance, the salaries of General Motors CEOs, or maybe the golf-courses for Bankers from Wall Street? Club memberships, perhaps, or the salaries of “Community Organizers” associated with ACORN.

    THOSE things got big federal money. The rural fire-department volunteers didn’t get a fucking dime from Uncle Sam.

  • Cannonshop

    I think where we’re missing each other, is really at the definitions level-we just aren’t speaking the same english, Leroy. When I and people like me say we’re opposed to the Entitlement mentality, what we’re talking about, is the mentality that allows a Banker to play fast and loose with depositor’s money with instruments he doesn’t understand, full in the secure knowledge that Uncle Sam will eat the cost of his mistakes, the mentality that a CEO can run a company into the ground, destroy its product and consumer base, outsource everything but the letterhead, and when the company’s bankrupt, that it will be “too Big to Fail” and rescue will arrive via tax-dollars to save the shareholders who weren’t paying attention.

    The “Entitled” mentality is the mentality of the guy who wants, wants NOW, and wants someone else to PAY for it, instead of working for it himself, understand?

    And he wants it with the Public eating the risk while he keeps the profits for himself.

    It’s the mentality that those dollars are the Governement’s dollars, not the dollars of the guy who earned them, and that it’s a “Cut” when the Government doesn’t get as many of those dollars to play with, as it wants.

    WANTS, Leroy, “ENtitled” people WANT, they don’t NEED, and won’t WORK to MAKE or DO.

    Not “can’t” work, “Won’t.”

    Do you comprehend the difference? A guy enlists in the Marines and does two tours in hell on foreign soil, he’s EARNED benefits for that-it’s arguable whether the mission was worthy, but that’s at the elected political level-which in our system does not allow the Military to choose the missions they are sent on.

    It’s earned because he sticks his ass out in the line of the fire, for someone else-say, someone civilian, who sent him there or whose elected representative sent him there.

    This a hell of a lot different from giving similar benefits to some guy who, in his self-absorbed arrogance, thinks his personal artistic vision, one that nobody is willing to pay money for, is worthy of dollars from Uncle Sam-mostly so he doesn’t have to go out and lower himself to getting a real job.

    What have you done, that you have earned the right to demand that other people pay your medical bills? buy your food? rescue your failing corporate dinosaur?

    “Entitlement” mentality precludes the demand that you work, sacrifice, or serve to recieve benefit at the public treasury.

    it’s a poisonous and destructive, and ultimately utterly selfish, self-absorbed and arrogant mentality.

  • troll

    Cannonshop – how do medicare and social security – two primary entitlements – preclude the demand that you work, etc?

    seems to me that the vast majority of folks who might feel entitled to benefits from these programs do so because they – just like your jarhead – have paid their dues

    ya gotta think positive dude – it’s a system of mutual aid

  • Cannonshop

    #23 the fundamental difference, Troll, is that you don’t have the option NOT to pay into Medicare or Social Security-it’s compulsory, whereas you DO have the option NOT to enlist in the military, except during a draft situation, (in which case the nation is under a specific peril, one that is finite in scope. Paying into Medicare/Social security is neither finite, nor emergency in nature, it is simply taxation, given the number of times that money’s been replaced by IOU’s, it’s not even paying into that system…)

    The big problem with Social Security, is that it pays even if you didn’t pay in-all you have to be, is a U.S. citizen over the age of ‘entitlement’ and you’ll get benefits-even if you weren’t a citizen until last week.

    The requirement to pay in, should be applied to withdrawal from the system, and it doesn’t do that-there is no contributional requirement,and with SSI, you don’t even have to be old-they’ll pay out if you’re a drug-addict who can’t hold a job, if you know how to file the paperwork right.

    This is a problem. VA benefits require a record of service, of contribution, and of sacrifice-for the time you’re in uniform, you’re effectively barred from many of the normal freedoms other people enjoy, such as the right ot express your political opinions, to quit the job before your tour is up, etc. etc., and while in uniform it is assumed that you will go where you are sent, and if necessary die, carrying out orders you may not understand the reasons for.

    the two aren’t even equivalent between them.

    There are very few civilian jobs where you are, by working them, saying “Yes, I will put my life on the line for people I don’t know, and may not even particularly like, and die or kill in their name for reasons I may never understand, or barring that, agree with, and while I work this job, I will live outside the framework of my civil rights, with none of their protections save the rules imposed by my work, until such time as this job is done.”

    That’s what military service MEANS. It means that, if you’re a Republican, and the POTUS is Barack Obama, you will obey his orders, (assuming they aren’t blatantly illegal under the framework of military regulations),without question or hesitation, regardless of what you think of the man personally OR politically.

    For a Democrat, it measn that if Ronald Reagan or GWBush is president, the same obedience to lawful orders applies-even if it makes you feel all icky inside.

  • trol l

    just ran across your #24 Cannonshop…sorry about the delayed response

    the dues that I referred to in #23 were not simply the payments into the system to be used to provide for others but additionally lifetimes of service in the labor force – which I hesitate to compare too closely with service in the military force but would argue has its personal costs as well

    btw – I’ve come to view serving (up death and destruction) unconditionally and without question to be one of the most immoral of acts reserving a special place in hell for any one of us who has done so…much of your 24 is wasted on me

    just say no to military service boys and girls…go fight fires instead

  • affofogralync

    The euro crisis is not something what is caused by some countries or people.
    It’s an general issue about how money is working.

    how money works:
    http://www.youtube.com/watch?v=lYi0deWPibU
    http://www.youtube.com/watch?v=g2Y1FIZ-cPY
    http://www.youtube.com/watch?v=ty1HvJGhiJo

    Alternatives:
    Maybe youtube heard or readed already about Bitcoins?
    http://www.weusecoins.com
    https://en.bitcoin.it/wiki/Main_Page

    Bitcoins are limited and every day more people know about them, the value is raising since months and will raise much more.

    All problems in the world where caused because of the money system.

    [Edited]