Invoking the DUH clause

It’s time once again for The Future American’s FAIL OF THE WEEK! Every Saturday, I name a person or group who has spent the past seven days behaving in a particularly idiotic way. Since it’s my belief that idiocy knows no politics, nobody is safe.

This week’s fail was brought to you by the government of Michigan. Complain all you want about stalling in Congress – I certainly do – but they’re getting better, however slowly, at clearing the most easily supported legislation out of the pipeline. Lawmakers in the Michigan House and Senate have been working for a year to send a very sensible bill to the governor’s desk. Hopefully, thanks to this ridiculous story about a lottery winner continuing to receive food stamps, they’ll get the kick in the ass they needed.

24 years old and unemployed, Amanda Clayton took home $700,000 after taxes but never stopped being able to use her state-supplied debit card to buy food. (By the way, debit cards are an excellent choice for welfare systems, much more so than checks.) I can’t spend a whole lot of time faulting her for not being a Girl Scout and telling the welfare office about her big win; you get why it’s wrong already. We can talk about greed and honesty until the cows come home, but that would be a very boring column. (Although I’m confused about her claim that she has two houses. Is one of them new? Did she have two houses before? If so, why?)

I’m not even going to knock the Michiganders in office for not having a good solution for a problem that has happened twice. The House and Senate have passed separate bills that would require the lottery office to report winners who are on welfare. The sponsor of one of those bills, Republican state Rep. Dave Agema, complains that his chamber’s version has to go to a Senate committee and then back to the floor. What’s the point for something so obvious?

There ought to be certain criteria under which legislation would be allowed to bypass the committee stage for speedy approval. I would factor in a specific proportion of yeas to nays, plus the nature of the bill having nothing to do with a state emergency, recession, constitutional change, civil rights issue or new tax. The only people I can imagine opposing a bill like this are bleeding-heart types who don’t think the burden should be on the winner to manage their money long enough to stay off welfare for a few years.

Of course, Michigan isn’t the best state in which to talk about money management, considering how their largest corporations failed at it. They should manage their money long enough to stay off welfare. Let that satisfy all who wondered why I’m bashing individual beneficiaries and not them.

Taking a scalpel to the deficit tumor

Congress calls it “The Middle Class Tax Relief and Job Creation Act of 2012,” but the phrase “job creation” is a bit pompous, in my opinion. Much like corporate tax cuts, you can’t guarantee that savings incurred through a payroll tax cut will automatically pay for new jobs unless you legally require them to do so. But it’s probably the best they can do without any new stimulus.

There were legitimate concerns with the bill that extended the federal payroll tax cut for the remainder of the year. Republicans were concerned that extending the cut would deplete funds from Social Security, which is mildly amusing to hear as conventional wisdom holds that they are the party of tax cuts and the Democrats are the party of entitlements. It came down to a choice between deficit reduction and lessening burdens on businesses, and while the bulk of the bill moves the latter forward, the former isn’t completely absent. Examples:

Unemployment. States with below-average unemployment rates will see their benefit periods shrink the most, to as little as 40 weeks. States with the highest rates could see benefits as long as 73 weeks. In addition, recipients must be required to remain in the labor market by looking for work, and to be screened for drug use if they have ever failed or refused a drug test. Assuming it’s legally possible, I’d sweeten the deal by requiring that 10 percent of an unemployment check go into a savings account, only accessible for emergencies. That would also go for . . .

Welfare. The Temporary Assistance for Needy Families program will continue for another year. However, recipients will no longer be allowed to access those funds at ATMs at strip clubs, liquor stores and casinos. Why not go further and turn the entire program into a system of vouchers, redeemable for housing, utilities, food, medicine, school supplies and any expenses needed for children? Seems like the best way to spend that kind of money.

Federal pensions. Civilian employees of the government and (OMG) members of Congress will be contributing more to their pension plans. That’s great, but until I see salary reductions for members of Congress, I won’t be convinced of their sudden benevolence. That part is a mere, trifling bone to throw at the many, many taxpayers who have been clamoring for it for years.

These are a couple of ways the Republicans could have won some longer-lasting federal savings, after factoring in the costs of any new bureaucracy (which could still use a hell of a lot of trimming). Anyone who got pissy about it would look like they wanted unemployment recipients to buy booze. So it would have been a good political sell, too.

Let them eat netting

For all his talent speaking to a crowd (if you forget the dependence on Republican stump speech cliché and overuse of the word “America”), former Gov. Mitt Romney (R-MA) has a big problem getting his point across when someone is asking a question to his face, which raises whole new questions about his negotiation skills. But I digress already. The newest in a long, long line of lines that had the opposite of its intended effect came out yesterday. You can probably pick out which line that was one from here. Here’s the complete version:

I’m not concerned about the very poor. We have a safety net there. If it needs a repair, I’ll fix it. I’m not concerned about the very rich. They’re doing just fine. I’m concerned about the very heart of America, the 90, 95 percent of Americans who right now are struggling.

I could take this opportunity to scoff at this and assure you that he is indeed concerned about the very rich. In truth, I don’t believe he thinks they’re having it rough these days; he’s simply accustomed to policies and behaviors that disproportionately benefit them and would probably continue to pursue economic initiatives from that perspective.  He’s can see how the middle class has been adversely affected by certain policies of this administration and past ones. He knows he has to keep an eye on them.

So here is the central problem with his comments: He is propping up the status quo, in which the Republican Party has no agenda for the poor and assumes existing social assistance programs, mostly brought to you by various levels of government, do the job just fine. If they did have any genuine concern for the poor, they would frame it as an issue of helping them transition from lower to middle class through private-sector aid, similar to those of Reagan-era HHS Secretary Jack Kemp and Arianna Huffington, when she was a Republican. Where did those ideas ever go?

Surprisingly, the only one of the remaining primary candidates who even approximates thinking about this sort of thing is former Sen. Rick Santorum (R-PA). Hell, if he weren’t a certifiable nutjob, I might have considered endorsing him. Unfortunately for him, Romney has talked himself into a position in which any effort to appear genuinely worried about the poor would attract justifiable accusations of opportunism. If he were at all interested in running a campaign of ideas, he wouldn’t risk putting together a platform on the fly. He’d have a complete one by now.

An election right on the heels of Obama’s first term provided a chance for an opponent of his to beat him at all of his own game. It’s clear Romney hasn’t seen that chance as clearly as we thought he had.

Swipe that smile off your face

I don’t often carry cash, so I use my debit card a lot. The idea of per-swipe fees dropping from 44 cents to a 12-cent cap is appealing, not only for shoppers, but for the merchants who end up paying those fees to banks. Save one consideration that always comes up when the government does anything relating to banks, those worrying about small businesses in today’s economic climate might otherwise be celebrating at the news that the legislation attacking the cap failed in the Senate.

The bill, proposed by Sen. Jon Tester (D-MT), wasn’t far from passage. The roll call was 54 in favor, 45 against, six votes short of the 60 required for filibuster-proofing. Sen. Dick Durbin (D-IL) slipped the cap into last year’s financial overhaul, requiring the Federal Reserve to implement it. The missing 100th vote was Sen. Joe Lieberman’s (I-CT) abstention, and 19 Democrats voted for it while 12 Republicans voted against.

The risk of any such legislation is that the beneficiaries won’t do what they’re free to do with it. Some fear that the ensuing revenue loss for banks will pave the way for them to increase it elsewhere, perhaps through new fees on checking accounts or curtailing rewards. One authority, Camden R. Fine of Independent Community Bankers of America, is very skeptical that stores will pass on their savings to consumers, and thinks anyone who believes so must be “smoking dope.” Well, excuse me.

The ideal formula, obviously, is one that would benefit consumers and businesses first. If the merchants were smart, they would cut prices just a little, with the expectation that shoppers would buy a higher number of products per trip. If banks were smart, they’d tighten executive belts. For the Fed or Congress to compel them to do either would likely be unconstitutional, so let’s leave that out of the equation entirely.

Instead, the onus should be on the consumers to hold them accountable for how they approach the changes. The quotes in the above link tell me there are many organizations across the country who might be willing to take it upon themselves to write up a “Debit Pledge.” In signing it, merchants and banks would make the promise to limit collateral damage to the lowest possible number of consumers. Anyone who reneged on this would be named and shamed.

Of course, I might be self-interested because my lack of change led to me to use my card to pay for a 39-cent one-pager at the college print shop on Tuesday. Limiting our own transactions might be a good idea, too.

Disposal Day #28: It’s your economy now

STORY #1: The joy of checks

How much would the federal government have spent on the latest round of unemployment benefits without that annoying little filibuster? At $300 a week for seven weeks for 2.5 million people: $5.25 billion. That’s why the filibuster existed in the first place. It may be paid for out of a stimulus fund for which everyone has already budgeted, but with the deficit burgeoning by the day, can you blame the nay voters for wanting to tighten their belts?

If Congress refuses to give up on doling out unemployment benefits, the least they can do is offer a measure to spur permanent job creation that will move beneficiaries to private payrolls. These continuous spurts of benefits are completely unsustainable. Granted, recipients probably don’t care that much right now, but I can’t expect their morale to be very high when they see the check in the mail.

STORY #2: The two faces of taxes

The intent of any package of tax cuts and hikes (they can peacefully co-exist, as they all go to different groups of people) should be twofold: Create jobs, shrink deficits. Any effort that does not accomplish this should be left on the back burner. The only way to achieve both is to take the middle ground, cutting some, hiking others, and leaving the rest alone, as if that’s not the most obvious solution in the world.

Nonetheless, at the moment we have Democrats wanting to extend only the middle-class tax cuts and Republicans wanting to extend all of them. I would like to see the effect of raising taxes on only the top 1% for now, which worked splendidly for former President Clinton. This would be less costly and would save job growth for smaller businesses, who might deserve a small trim.

STORY #3: Finally, something useful

“. . . the $30 billion loan facility would be an option for smaller community banks, enabling them to increase their capital and be rewarded with lower interest charges if (my emphasis) they turn around and increase their small business lending.” Why didn’t anyone include that “if” provision with TARP, to which Republicans are spuriously comparing this? You can’t assume that big banks will do that with free money.

I give Sen. Mary Landrieu (D-LA) all the credit. She has done a better job of handling Republican critics than any other Democrat in recent memory. Read some of her zingers; they alone make me admire her guts.

Building a better rat trap

Another day, another GOP filibuster. Though I can’t entirely blame them for the stall of financial reform in the Senate. There’s also Sen. Chris Dodd (D-CT) for refusing to hear of any alternatives to his proposed consumer financial protection agency (CFPA).

Dodd, as you know, chairs the Senate Banking Committee. His main opponent on this legislation is his Republican counterpart, ranking member Sen. Richard Shelby (R-AL), who opposes creating “an ‘intrusive’ consumer financial protection agency.” It’s almost a knee-jerk response to any proposition of an expansion of government, whatever good it may set out to do for taxpayers. But Dodd’s plan could also be seen as a knee-jerk response to any problems these taxpayers may be having.

Here’s where I illustrate the issue with a Canadian anecdote. At the last provincial New Democratic Party (NDP) convention, someone proposed setting up an agency of Manitoba Hydro, our government-owned energy provider, to research and implement alternative energy. Adam, who opposes Hydro’s monopoly, suggested to the room that small businesses could do a better job of this than a single company. He tells me the room went silent. Later, someone accused him of wanting to privatize Hydro.

That’s kind of the way Dodd is operating here. He isn’t falsely accusing anyone of being pro-private sector über alles, but he is making an NDP-style move and going for the government agency idea before taking any possible alternatives into consideration. So, since the stubbornness on his part and the part of Senate Republicans is holding up a serious debate, I’ll just propose a few additional plans myself.

1. Mandatory financial planning classes. I call for this every couple of months and I will again. Integrate it into middle- and high-school math curricula now and toss out the pre-calc for every student who will never be an engineer. For adults, offer such classes through employers after work. Any money required for these would be a worthwhile public expense, if necessary.

2. Set up more locally based agencies. The idea would probably work better if the focus was on one state, one district, or one major metro area each. Regional banks are not immune from fraudsters or excessive risk-takers. Republicans might consider it if the feds were completely out of it.

Anyway, I’m going to head to the bank to deposit a check. Wish me luck.

The HAPPY Act is a crappy act

It’s time once again for The Future American’s FAIL OF THE WEEK! Every Saturday, I name a person or group who has spent the past seven days behaving in a particularly idiotic way. Since it’s my belief that idiocy knows no politics, nobody is safe.

This week’s fail was brought to you by Rep. Thad McCotter (R-MI), who has presented the House of Representatives with possibly the dumbest idea for a tax credit since the one for home renovations here in Canada. The bill, known as the HAPPY (Humanity and Pets Partnered Through the Years) Act, would allow households to deduct $3,500 from their income taxes in pet care expenses. It “would count as non-taxable income” – even though it’s not income at all.

I myself have never had a pet, since we’re all too busy to care for one and my mom is allergic to dander, so I don’t have the emotional support for this bill as others might. But don’t be so sure that they’d fall for it, either. I told Adam about this bill yesterday; he says he might claim his mom’s cats as dependents next year. Imagine some accountant looking over that form: “He named his kids Chewy and Snowball?”

Obviously, it’s better for domestic animals to live with loving families instead of rotting away in some shelter. But if the loving family in question can’t afford all of the expenses necessary for them during a recession, why should the government help? Hey, there’s a business opportunity: someone will set up a sort of halfway house for pets, in which they can be taken care of while their owners get their finances back on track. It’s better than just selling them off.

Some supporters of this bill might argue that it’s no different than claiming child care expenses on your income taxes. Actually, it is. If having children is a luxury these days, having a pet is one notch above luxurious. The government has much more of a stake in ensuring the welfare of the next generation of humans. You know, the ones who will someday pay their own taxes.

But the name of this bill (known officially as H.R. 3501) illustrates perfectly what would really be at risk without the tax credit: happiness. Pessimistic as I can be sometimes, happiness is pretty much always a good thing, except when you let it get in the way of common sense. If this bill passes, that would be one of those times. The Constitution guarantees the pursuit of happiness – not the destination.

By the way, when I get my own place, I also intend to get a cat. I’ll name her Pandora.

Empowering the poor needs more power

Americans are taught to be wary of government intrusion into fixing social problems as much as Canadians are taught to embrace it. Actually, in the case of Canadians, I wouldn’t say “taught” so much as “ingrained.” Detractors of President Obama may have been skeptical of his rhetorical flourishes, but they often carried a significant message: that you can change your own circumstances and you shouldn’t expect the government to do everything for you. Maybe you don’t believe that he meant it, but it is a tradition of U.S. elections to talk about that. Not so for Canadian ones.

I’ve been debating the merits of an anti-poverty campaign being conducted by the Canadian Federation of Students, a union you can’t leave unless your entire school does, with my friend David Jacks, formerly the chair of its Manitoba branch. The full contents of the debate are too heavy to post here, so I’ll just sum it up like this:

JESS: “So, David, are you gonna recommend any good policies instead of just walking around and screaming like last year?”
DAVID: “Sure. The report by the CCPA (Canadian Centre for Policy Alternatives) says government investment in <direct quote>affordable housing, child care, transportation, education, and fair wages</direct quote> is teh awesome.”
JESS: “OK, great, now how about helping low-income households set up small businesses and encouraging more worker co-operatives? It worked for Bologna, Italy.”
DAVID: “Yeah, great, but we want the government to do more. That always works.”
JESS: “But why not harness the potential of this at the same time? It would help keep people off the dole, and it’s a unique addition to the same old crap.”
DAVID: “But we enjoy the same old crap!”
JESS: “Sigh. Stupid Canadian culture.”

Clearly, if I were still attending classes at a CFS member school (I’m taking the latter part of my joint communications program at a vocational college), I would be the RWFOC – right-wing fascist on campus.

If anti-poverty activists in both Canada and the U.S. are serious about helping the poor, they need to start connecting it to entrepreneurship. It’s not just for the Joe the Plumbers of the world who already [pretend to] have decent jobs. There are poor people with talents that can be parlayed into businesses. Let’s not break the cycle of minimum wage by replacing it with the cycle of government dependence.

Requiem for the upper-class work ethic

When the news first broke that taxpayers were ending up footing the bill for the bonuses of AIG execs, the reaction from American citizens – outside of the government and the financial sector – was pretty much the same across the land: “We don’t like it, and you shoulda put a cap on it.” (If you get the reference, I’ll buy you a Coke.) These citizens should be somewhat pleased with the latest news:

Talking tough but stepping gently, the Obama administration rejected direct intervention in corporate pay decisions Wednesday . . . [T]he administration plans to seek legislation that would try to tame compensation through shareholder pressure and less management influence on pay decisions.

Direct intervention had been on the table before, but we all know what the reaction would be to that: SOCIALISM! (GAH!)

I think I’m supposed to feel thrilled about the idea of the pigs at the trough losing access to some of their truffles. Instead, I feel sad about what this really means. We can’t trust corporate CEOs not to accept ridiculous amounts of money on top of ridiculous amounts of money, not even when we’re the ones giving it to them, without government intervention, direct or otherwise.

This isn’t unique to banks. It’s the reason that so many med-school graduates are leaving Canada: under our health-care system, we can only afford to pay them so much, and they’d rather chase the big money. We talk about salary caps on the sports show quite often, and although it disgusts them to admit it, some of my co-panelists take the position that caps hinder a team’s ability to attract the top players. But they would still be making more money in a year than some of these CEOs would make in four years, and more money than you and I will ever see!

(And don’t even get me started on people who have unlocked the secret to receiving a five-figure sum every night just for standing around in a nightclub for a couple of hours. That’s not even a decline in the work ethic. That’s a decline in ethics.)

There was a time – presumably when no company could afford to pay north of $5 million to a single person per year – when all that mattered to corporate executives, financially speaking, was being able to put warm meat on the table for their families, and maybe have enough to take a trip to the Poconos later. What really counted was a quality body of work and getting sufficient recognition for it. (“Sufficient recognition” means more than tossing them a check and a cigar.) If these CEOs cared that much about their jobs, the government wouldn’t have to bother with this.

The poor need ideas, not Edwards

Check out this piece from Politico (the commentator’s Bible) by Wendy Button, a speechwriter for John Edwards when he was running in the last Democratic primary. The premise: “Who cares about the affair and the fact that he may have a baby-mama? What matters is that Edwards was a crusader against poverty, and now that his credibility has been shot to hell, the American poor don’t have someone to speak for them.”

I never disliked Edwards, but I didn’t believe that he was the best person to speak out against poverty, either. Perhaps it’s a cause he holds dear to his heart, but all that money spent on his hair could have gone to something much more worthwhile. (My haircuts cost only $18, and they still look damn good.) For example, as Button points out:

If Frances [Quinn Hunter’s] father is in fact denying her in a public way, then it is absolutely impossible for him to speak out about the poor, because one of the leading causes of poverty for women with children is a negligent father. If Edwards is not the father, then he needs to show the world that he’s not, because, fair or unfair, most look at those pictures and reach the conclusion that he is.

Of course, Rielle Hunter has never given the impression of someone who is hard up for money. But if Edwards is indeed the father of her daughter, publicly paying child support might be a good attempt at leading by example. It would be humiliating to everyone involved, but it would make Edwards look like slightly less of a hypocrite.

But let’s get back to Button’s point about poverty. It is true; while Congress works their collective butt off to improve the worsened situation for the American middle class, they have pushed the fact that some Americans envy that class to the back burner. On the other hand, the poor have always been on the back burner, even during economic good times. But it’s no surprise now, considering that the middle class has been responsible for the majority of the production that has fallen and needs to get back up.

Button reminds the reader of “Jack Kemp’s inspiring chapter in . . . Edwards’ book, Ending Poverty in America, about encouraging entrepreneurial efforts in the forgotten and neglected areas of this country.” Well, why not try that? It works for Muhammad Yunus. The concept of microcredit is one that is not without criticism, but definitely merits exploration for application in the U.S., most likely after the economy starts showing signs of growth. We don’t need John Edwards to speak out about that, as long as someone who understands it is willing to pick up the slack. No one will trust him anymore.